Giver beware: gift cards can expire - MoneySense

Giver beware: gift cards can expire

Gift cards will be more popular than toys this Christmas — but sometimes they self-destruct


This Christmas, two thirds of us plan to give gift cards. But many of those on the receiving end will be disappointed when they finally try to use their cards and discover that their gift has self-destructed.

That’s what happened to Mary Maddever, whose 15-year-old son received a $50 gift card for a video store a few years ago. “It took us forever to find a store where we could use the card,” she says. “Then we found one, but by that time, he’d lost the card. Then we found the card again, but it had expired.” The video store got to keep the $50 and didn’t have to provide a thing in return.

No wonder retailers love gift cards. J.C.Williams Group, a Toronto retailing consultant, estimates that 10% of the money spent to purchase gift cards is never used. That works out to billions of dollars of pure profit a year for the stores that sell the cards.

Davidé Ward-Mathis III, president of the Better Business Bureau in Hamilton, Ont., says that most cards with expiry dates expire one or two years after the purchase date. Some start charging fees that eat into their value just six months after purchase. That will likely change in Ontario though, because the government hopes to pass a new law banning card expiry dates this spring. In the meantime, says Ward-Mathis, you can avoid disappointment by using cards you receive within three months, no matter what the fine print says. “And if you’re considering giving a card,” he says, “you could give cash instead.” After all, you can redeem cash everywhere — and it never expires.