Gift cards keep on giving
They’re ubiquitous. They’re supposedly valuable, but they’re more annoying than anything. Worst of all, societal norms insist you act like you like them, but they’re really nothing more than a chore. No, not the Jonas Brothers (zing!), I’m talking gift cards. Yes, gift cards. The last refuge of the unimaginative or unmotivated gift giver. The all-too-often go-to gift for the tenuously related and close-knit alike. Great for holidays, birthdays, thank yous, bribery and cents off gasoline. And that’s exactly why I give them.
Sometimes you just have no idea what else to get someone. (For me that would be, ahem, Father’s Day, Mother’s Day, Christmas, Canada Day and pretty much any other gift-giving holiday.) And if I wasn’t blessed with a go-getter of a little sister who will do all the gift shopping and let me sign the card if I split the cost, gift cards would likely be all I give. And I’m not alone. Americans spend about $65 billion in gift cards each year.
But of course, no one is fooled by the gift card. They’re like the scented candle or anything from Bath & Body Works, which long ago became proof you had no clue what to buy your girlfriend/wife. (Seriously, why doesn’t Bath & Body Works rename their stores “We Know You Have No Other Ideas”?) You better hope it’s the thought that counts, because giving a gift card is a tacit admission of giving little thought to the gift.
But there’s one party that’s happy to see me giving out gift cards left and right: the state. (No, not “the state” in the ominous, tin-foil hat, Libertarian kind of way. Pennsylvania. … Yes, I know it’s a Commonwealth. … Get out of my parenthesis! Anyway…)
Pennsylvania is among the half of these United States that tap unused gift cards to bolster their sagging bottom line. South Carolina is looking to become the 27th state to do so, with legislation giving the Palmetto State the right to collect unclaimed gift-card credit past the house and currently festering in the state Senate.
The specifics differ, but these states classify unused gift cards as abandoned property, and are using them to offset wilting tax revenue and growing red ink in state budgets. According to the Wall Street Journal, this is part of an aggressive assault on lots of “so-called abandoned property – anything from gift cards to dormant bank accounts and safety-deposit boxes.”
Pennsylvania, for its part, can collect the entire value of any card with an expiration date, but only after it’s been expired for two years. So cards without expiration dates, like the Best Buy card that’s been on my dresser from a Christmas or two (or three?) ago, are free from Harrisburg’s grubby grip.
The Borders/Waldenbooks card that (I just found out) lasts only six months? It’s probably well on the way to that two-year limit for the state to stake a claim on it.
I have a Visa gift card with three cents stuck on it (and of course they won’t just give me three pennies).
But are there enough unused cards out there to make this worthwhile? Check your wallet or your wife’s purse, I’ll wait.
Yeah, exactly.
Unless you are incredibly focused on making sure you spend the cards before you forget about them (and you will) or are lucky enough not to get gift cards to stores you don’t frequent (I’m looking at you, Best Buy), you’ve likely got a few gift cards lining your wallet.
As a country, Americans fail to redeem about $6.8 billion in gift cards, or just under 10 percent of what we spend using them annually, according to research by TowerGroup, a financial-consulting firm.
This is great for the card issuer, since a lot of the time that unused money becomes income. (And you wonder why they all but shove them down your throat around the holidays.) Even cards without expiration dates eventually get shifted from a liability to income on the balance sheet-on an if-you-haven’t-used-it-by-now-you-never-will basis. (I don’t think that’s the official accounting term; I’ll get back to you.)
SEC filings from Home Depot show the company picked up $37 million in revenue from unused gift-card credit this year. Particularly picky teens saved American Eagle Outfitters more than $12 million last year in unused gift-card credit.
And so cash-strapped states are trying to get in on the game. When there’s just about $7 billion floating around out there, it’s no wonder.
Last year, New York state picked up $9.6 million in “abandoned property” in the form of gift cards idle for five years.
At least we know someone’s enjoying gift cards.
Brandon Szuminsky can be reached by e-mail at bszuminsky@heraldstandard.com. Feel free to send e-gift cards.