I can't remember the last Christmas when I didn't see gift cards given. They have become the go-to gift for me and many other shoppers who have ran out of gift ideas. However, this year I heard rumors about expiration dates some places were putting on gift card balances, and that left me wondering if I should avoid them. It also prompted me to do some online research about them. What I found were some rules the Federal Reserve put in place back in 2010 that eased my worries. Here is a little more information about these rules, and about gift card statistics in America.
Federal Reserve gift card rules.
My biggest concern was that gift card companies were actually shortening the time between purchase and expiration to one year. I was afraid that the people I planned to gift would end up with a useless card because they waited too long to decide on the perfect item. However, after seeing the rules put in place in 2010 by the Federal Reserve, I now know the companies aren't allowed to do that.
"The money on your gift card will be good for at least five years from the date the card is purchased. Any money that might be added to the card at a later date must also be good for at least five years."
Now that I know the money I spend will be available for at least five years, gift cards are back near the top of my go-to gift list.
How much will be spent on gift cards this year?
The National Retail Federation conducted a survey and found that 81.1% of people are projected to buy at least one gift card this year, and they are expected to spend an average of $156.86 on cards overall. The total amount spent of gift cards in 2012 is projected to be around $28.79 billion.
While I am planning to buy a few gift cards as backup gifts, I will not be spending over $150 on them. Right now, I plan to spend $30 on three $10 gift cards just in case someone unexpected shows up on Christmas day.
How much money is wasted on unused gift cards?
According to a report form ABC News dated December 2011, there has been an estimated $41 billion dollars worth gift cards to go unused since 2005.
Letting the money expire is one of my biggest worries with gift cards. So, when I receive one I make it my goal to use the money the best way I can to avoid throwing the money away. If I can't find something to purchase for myself or someone I know, I either re-gift the card to someone who can use it or I donated it to a local charity.
Gift cards are a great way to ensure the person getting the gift actually gets something they love. However, you have to be careful to read all the fine print to avoid hidden fees, and to learn about your rights as the cardholder. Gift cards will be a part of my Christmas celebrations, and thanks to my new knowledge I'll gift them with confidence.
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.More from this contributor: First Person: I'm Going Credit Card Free This Christmas
- Personal Finance - Lifestyle
- Hobbies & Personal Activities
- Federal Reserve