There’s a good chance you’re among the millions of people who got a gift card over the holidays since upward of $200 billion was spent on them. But you don’t shop at Home Depot, you prefer Dunkin’ to Starbucks, and your aunt thinks you still like Abercrombie.
What to do?
There’s lots to know about gift cards, including how to redeem unwanted ones for cash (at a discount, of course):
Q. What’s the most important thing to know about gift cards?
A. That you need to use them, and the sooner, the better. Billions of dollars in gift cards go unused. Some people forget they have them or forget where they put them. Studies show that if you don’t use your gift card in the first six months the chances of you ever using it decline significantly.
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Suffice it to say, use it before you lose it.
Q. Do gift cards expire?
A. Under the law in California and a few other states, gift cards never expire, while federal law mandates a five-year minimum life. But most big national issuers of gift cards have opted to impose no expiration date, no matter what state they are in.
Cards issued in Massachusetts by local merchants can expire no sooner than seven years.
Q. Can I sell my gift card for cash?
A. There is a so-called secondary market online for selling and purchasing some gift cards, including the websites Raise, GiftCash, and CardCash.
I checked out Raise, which imposes two kinds of costs on sellers: a discount on the face value of the card to attract a buyer, and 15 percent of the selling price as a fee payable to Raise.
The discounts are set by Raise, based on fluctuating customer demand, and are different for different cards. I experimented by testing how much I would receive by selling $100 gift cards for Target ($83.37), Home Depot ($83.26), and Dunkin’ ($76.58).
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Raise declined to take my card for Amazon, saying “at this time, we are only accepting Amazon.com gift cards from select sellers.” And it didn’t recognize my local restaurant at all.
I want the full value of the gift cards my wife and I received. We’ve already used one of them for takeout at a restaurant, and we have designated a place for safekeeping for the others.
Q. Can I return my unwanted gift card to a retailer?
A. Some retailers may accept a return of a gift card if you have the receipt and the gift card hasn’t been used. But don’t count on it.
Q. What happens if the gift card I have is for a business that closes before I can use it?
A. If the restaurant or retailer closes, you’re thrust into the unenviable position of chasing the owner for the unused balance on your card. If the business is bankrupt, you are relegated to the back of the line among creditors. Not a place you want to be — and another reason to use your card promptly.
Q. What happens to the unused balances on gift cards?
A. In a few states, all unused balances on gift cards go to the state as abandoned property. In Massachusetts, there is a distinction made between cards issued by banks in affiliation with a credit card company, such as Visa or MasterCard, and all others. For the bank cards, unused balances are required to go to the state. For the others, there is no such requirement; some card issuers do so voluntarily but many do not.
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Q. Can I be charged an “inactivity” fee if I don’t use my gift card right away?
A. No. An inactivity fee can be charged only if there has been no activity for one year, and only if the policy on such fees is clearly stated on the card or its packaging. Merchant-issued cards for stores and restaurants generally do not have such fees.
Q. What should I do with my Amazon gift card?
A. Upload it into your Amazon account right away. It should show up as a credit. Now you can discard the card. Amazon will automatically draw from your gift card balance — rather than from the credit card you have on file — the next time you make a purchase.
Q. What should I know about gift cards issued by companies such as Vanilla and Green Dot?
A. These cards are often given as gifts, but they are prepaid debit cards and can be used wherever credit cards are accepted. The Vanilla card I received is issued by a bank in affiliation with Visa. It says “card funds never expire” on the back, even though there’s a 2030 expiration date on the front. 2030 is when the card must be replaced. Any balance at that date would be transferred to the new card.
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Q. Can I check the balance on my gift card?
A. Yes, for cards issued by national retailers and banks in affiliation with credit card companies, it’s easy. Just check the back of the card for the website or 1-800 telephone number used for checking balances. On the Vanilla website, I punched in my card’s 16-digit serial number and three-digit CVV code and got my balance instantly. I wasn’t able to find a way to check the balances of my gift cards for local restaurants.
Q. Are there scams to be wary of?
A. Gift cards are one of the most important tools of the trade for scam artists. They try to trick or scare people into buying gift cards and reading the serial numbers and codes to them over the phone. With that information, scammers can convert your gift card into cash by selling it online.
Remember, if someone asks you to buy gift cards and read them the numbers, it’s a scam. Don’t do it.
And don’t get fooled by counterfeit websites when trying to check your balance. Scammers created them to look like the real thing. They want you to think you are typing serial numbers and codes into legitimate sites.
Got a problem? Send your consumer issue to sean.murphy@globe.com. Follow him @spmurphyboston.