Giannoulias: It’s not too late to redeem expired gift cards
State gift card law protects consumers

December 29, 2009

Illinois residents who received gift cards from previous holiday seasons may be able to redeem them for cash even once the gift cards expire, according to the Illinois State Treasurer Alexi Giannoulias.

Giannoulias’ office is holding more than $5 million in unused gift card balances for Illinois residents. According to state law, gift cards can not expire for five years and businesses are prohibited from charging fees that diminish their value.

“Allowing for longer usage and bans on fees mean that gift cards won’t stop giving and deters businesses from using them as sales gimmicks,” Giannoulias said. “Even when gift cards expire, consumers are entitled to the monetary worth of the gift card and can recover their money from the state.”

Owners of expired gift cards can search for their refunds on the state’s unclaimed property database at www.cashdash.net or by calling (866) 458-7327.

Even if a name isn’t listed, the state may still hold a consumer’s unused balance. Most gift card retailers do not record the name or contact information for the purchaser or recipient. As a result, the unredeemed balances come to the state marked as “owner unknown.” In order to receive a refund for the unused balance, the purchaser or recipient must file a claim with the Treasurer’s Office using the serial number on the expired gift card.

Not all retailers that do business in Illinois send unclaimed gift card balances to the Illinois Treasurer’s Office. Unused gift card balances are sometimes remitted to the state where the retailer is incorporated.

The sum of those balances can add up. According to research firm TowerGroup, an estimated $5 billion in gift cards went unused in the U.S. in 2009. Similarly, a Consumer Reports National Research Center survey found that 27 percent of adults who received gift cards during the 2006 holiday season had not used one or more of them nearly a year later. That is an increase from 2005, when 19 percent of consumers had one or more unused gift cards.

More than one-third of the survey’s respondents said they didn't use the cards because they either forgot about them, lost them, or the cards had expired, according to Consumer Reports. More often, consumers responded they didn't have time to shop or couldn't find anything to buy.

And still, gift cards remain wildly popular. TowerGroup projects $87 billion in gift-card sales for 2009.

Gift Cards: What You Should Know

Gift cards are a very popular gift option among consumers. According to the National Retail
Federation, gift cards are the most requested holiday gifts this year for the third straight year. But gift
cards can have drawbacks, including the potential to lose the card balance if the issuing retailer
goes out of business.

Whether you’re a gift card giver or receiver, here are a few tips for getting the most out of your gift.

• Read the fine print. Be clear on what the terms and conditions are as well as what expiration dates and service fees apply. In Illinois, retail gift cards must not expire for five years after issuance and card issuers cannot charge fees that diminish their value.
• Keep your receipt and register your gift card in case you lose it. In some cases, retailers will re-issue lost gift cards if you provide a receipt. And if you register your card online, you can request a replacement and monitor your card balance.
• If you receive a gift card, don’t hold onto it. In 2009, roughly $5 billion in gift card balances went unredeemed. In Illinois, gift card issuers are required to transfer unused balances to the State Treasurer’s Office once cards have expired. Owners of expired gift cards can search for their refunds on the state’s unclaimed property site www.cashdash.net or by calling (866) 458-7327. Even if your name isn’t listed, the state may still have your funds. You can file a claim with the Treasurer’s Office using the serial number on the expired card.
• Buy from reputable retailers and companies that you think have a good chance of being in business long enough for the card to be redeemed. When an issuing retailer files for bankruptcy, there’s no guarantee that you’ll be able to redeem your gift card. When a retailer files for bankruptcy protection, the court treats unused gift cards as debt and gift card holders as unsecured creditors. In such cases, consumers have to get in line behind all the retailer’s other creditors in hopes of getting paid.