Gift cards make great Christmas gifts. Not only are they great to receive, but they are also easy to give away. You don’t have to overthink what to get a person, and everyone likes getting the equivalent of cash at a store. While they’re not as personalized, they are a trendy gift that more and more people turn to each year.
While they are very popular to give away, are they really being used? Reportedly about $1 billion worth of gift cards is unspent each year. As you can imagine, that is a lot of money that companies are getting for free. And while they love the fact that people don’t use gift cards, average people are leaving money on the table. And that isn’t fair.
There are some logical reasons why people don’t spend their gift cards. Perhaps they don’t like the gift card they were given or never plan on shopping at a particular store.
But there is also another looming reason why gift cards go unspent.
Stores close.
To protect yourself from this common problem, you must use retail and restaurant gift cards as soon as possible. And if it is a gift card for a small business, use it this month because about 50 percent of small businesses fail within their first five years of business.
As the earnings reports start to roll in, we will soon learn that some retailers did not have successful holiday seasons. And if they discover that they’re not as profitable as they once were, some major retailers could file for bankruptcy, close doors or just go out of business.
Rumors are flying around that about 1,000 retail locations are supposed to close in 2018. While stores in your area may or may not be affected, the bottom line is that you do not want to be stuck with a defunct or useless gift card. If a store goes out of business, your gift card will be worth diddlysquat.
According to money expert Clark Howard, “Any gift cards you get for Christmas, burn them quick. Use them quick. The restaurant and retail industry is unstable. Don’t let a gift card sit and gather dust.”
If you hear that a store that you have a gift card for is about to close, get in there and shop like there is no tomorrow. Not only will you get doorbuster prices, but you’ll also use the Christmas present before you lose it.
The likelihood that your gift card will work depends on why the store is closing. If a store declares bankruptcy, they probably will not honor your gift card – although they promised you it would be as good as cash.
If your store doesn’t accept your gift card, you are not left hanging quite yet. You can contact them or the vendor from which they were purchased and ask for a refund. If it was bought through a credit card, you could ask your credit card for a refund because it might be covered by the consumer protection laws.
You might even be able to use your gift card at a former competitor. While they may not be able to honor it, they could offer you a discount in order to earn your business.
And if all else fails, hold onto your gift cards if a store goes under. While it is unlikely, especially in this volatile marketplace, the company could rise from its ashes and start again.
Which gift cards did you get for Christmas this year? Are you afraid of any of them going out of business?
