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What Happens to Unclaimed Gift Cards?

Gift cards are a convenient and appreciated incentive reward. But what happens when gift cards are unclaimed, lost or unredeemed?

Gift cards · Prepaid cards · Direct payments · Merchandise · Charity · Swag

Why unclaimed gift cards matter

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Where did the money go?

In short, after a recipient claims a gift card, the value remains with the relevant party—the issuer or the merchant on the card.

However, that’s only part of the story: your all-in delivery cost is driven by where you source the cards and how you send them.

This breakage (an accounting term for amounts paid for, but not used) is costly. The Mercator Advisory Group (now Javelin Strategy & Research) estimated that as much as $3 billion was left on the table in 2019 alone. It’s only gone up from there.

Streamlining the reward process using incentive automation not only simplifies the delivery of incentives but also enhances their memorability, reduces unclaimed gift cards and improves cost-effectiveness.

In the US, The Credit Card Accountability Responsibility and Disclosure Card Act of 2009 provided for a five year redemption period for gift cards in most cases, which reduced some of the early difficulties with cards.

Individual states are beginning to make unclaimed funds available at their Unredeemed Property sites. In the incentives industry, breakage exists from unclaimed gift cards that are offered to employees, clients or research participants that are never claimed for use. These losses from unclaimed gift cards can be substantial and cost the issuing companies millions of dollars.

Funds for incentives that are not opened and accepted within your preset time limit are automatically returned to your account. When purchasing cards, in contrast to most issuers in the industry, TruCentive returns funds for unclaimed incentives for gift cards if the recipient does not take the step to claim them.

43% of U.S. adults have at least one unused gift card, voucher, or store credit. ~ Bankrate

The average unused value is $244 per person (up from $187 in 2023). ~ Bankrate

That adds up to about $27 billion sitting on unused cards nationwide. ~ Quartz

Gift card funds generally can’t expire for at least 5 years; inactivity fees are limited. ~ CFPB

Starbucks recognized ~$212 million in breakage revenue in 2022, illustrating how unredeemed balances can become retailer income. ~ AP News

Some states treat unused balances as unclaimed property subject to escheatment (e.g., Delaware and others), meaning funds may be turned over to the state for consumers to reclaim. ~ AP News

Employee incentive gift cards

Employee appreciation incentives should be an integral part of your employee retention strategy and plans.

Employees love receiving digital gift cards as incentives, as they have a wide latitude in redemption choices, making the reward more memorable.

Organizations like them as well, because they allow for a multitude of employee choices, they can be easy to set up and administer with the right incentives platform and also offer a high degree of personalization, but don’t let them go to waste as unclaimed gift cards.

The holiday season is a particularly popular time for giving gift cards. Americans were expected to spend nearly $30 billion on gift cards during the 2023 holiday season, according to the National Retail Federation (NRF). Overall, the worldwide gift card market is expected to hit $2.3 trillion by 2030!

The most popular gift this holiday is clothing, a perennial favorite. Gift cards are close behind and are the second most popular gift for the holidays. Nearly half of Americans planned to include gift cards in their holiday giving. For reference, the NRF shows the top five gift categories consumers plan to give are clothing (56%), followed by gift cards at 44%, toys at 37%, books, video games and other media at 31%, and food/candy at 29%.

Data drawn from sources including: Bankrate, National Retail Federation, Javelin Strategy & Research, Forbes Advisor, Consumer Reports Bankrate, National Retail Federation, Javelin Strategy & Research, Forbes Advisor, Consumer Reports

Minimizing Loss from Unclaimed Gift Cards

There are tactics you can keep in mind to minimize waste and loss from gift cards, whether you are giving or receiving them:

Incentive automation streamlines the process of creating, managing and executing incentive programs. If your organization uses incentives (and you should) automating the process makes sure your resources are used efficiently, without waste and breakage.
Keep track of remaining balances on cards and make sure to use them. Often a purchase may be for less than the full card amount, leaving a small balance on the card. Keep track of this amount and make sure to use it at the next possible opportunity. Don’t delay or put it off.
Combine balances from several cards into one purchase. If you have several cards with remaining balances, put them all into a single transaction. It may a nuisance, and the person at the cash register may balk, but you have every right to use the remining balances on cards. Certain mobile wallets also let you combine payment methods to pay for your purchase.

Find lost balance and cards. Gift cards that have been registered with the issuing company can usually be tracked down. Sift through your email for the receipt or transaction details which may contain the card number. If the card was received as a gift, you might consider reaching out to the giver and see if they have any record of the transaction.
Treat the gift card as you would cash and credit cards. Keep them with your other cards in a safe place.
If you are absolutely, positively certain you won’t use a particular card, find a way to regift it, donate it, or pull the value from it via one of the reputable organizations that convert cards into cash.
Use an incentive and rewards provider that gives you a 100% refund when a incentive or gift goes unclaimed. If the incentive is not claimed by your recipient in your specified period, the funds revert to your account. Make sure you never waste money on unclaimed gifts.

Communicate to recipients to remind them of the incentive or gift. Set automated messages to remind recipients that they have an unclaimed gift or incentive waiting to be claimed. You may also set automated messages as follow up expressing your hope that they enjoyed their gift. These reminder also acts as a reminder to use the gift value.
Don’t purchase gift cards at retail racks. Consumer Reports reported that criminals have copied down gift card numbers, and scratched off the coverings over the PIN. They replace the code coverings with stickers, making it tough to tell that the cards have been tampered with.

Features to mitigate waste and make sure that funds go towards actual incentives and rewards.

TruCentive incentive automation leverages technology to simplify the building, executing and managing of reward programs. TruCentive only charges for gift cards when the recipient actually takes the step to claim them.

Automatic reminders sent to recipients help ensure that they redeem the unclaimed offer.

Expiration dates may be set to automatically reclaim unredeemed funds and return them to your account.

Corporate Incentives and Rewards

TruCentive offers a wealth of reasons why it is a preferred incentives and rewards gift platform for organizations.

It’s a great way to avoid wasted funds.

TruCentive is economical and returns money to your account when a gift goes unclaimed. Other incentive vendors keep the unclaimed value of cards, which can add up to a considerable percentage of the cost of programs. Funds for incentives that are not opened and accepted within your preset time limit are automatically returned to your account.

Reminder emails are built-in to allow for easy follow up, weeks and months down the line. Easily craft and send reminders to recipients reminding them of their gifts, gentle reminders to redeem their incentives if they have not accepted the incentive, as well as messages expressing the hope that they enjoyed their gifts.

A vast variety of gift cards, merchandise, and payment options are available and are customizable to fit any organization’s needs.

TruCentive allows users to send multiple cards at once in an easy process. Built in templates for complete programs makers getting started fast.

TruCentive makes it easy to support local businesses where your employees live and work with Merchant Gift Cards by Square. Thousands of choices allow organizations to support their communities and promote local businesses.

Performance insight includes detailed metrics that give you a simple means to compare your programs over time. See what works, understand your performance, and maximize your success.

Send Ready Projects

Pressed for time? Browse our Send-Ready project catalog. Simply add your recipients! Your logo is seamlessly integrated into your project. Customize as much or as little as you like!

Your company logo
Personalized for the recipient and from the sender
Send via Email or SMS
Automated reminders included

It takes less than five minutes to send an award, gift, or incentive to one individual or thousands.

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Incentive delivery that means more and costs less

Design Sessions are a great way to review best practices and to create a complete delivery sample.

We’ll walk you through building a complete project in the campaign builder with your logo, your recipients, and your incentive selections.

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