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A friend recently shared a headline with me, that there is currently $27 Billion in unused gift cards floating around in the United States.
Talk about a lot of value. Or potential value, rather.
Do you remember learning about “potential energy” in high school science class? Energy is the ability to do work, but potential energy is the stored version that’s useless as-is; it only has the potential for usefulness.
For example, food is potential energy. Only when it’s eaten and metabolized, however, can it release energy that’s actually doing something, like powering muscle fibers to contract.
That’s what I think of with gift cards. How many of us have “potential value” stored up in plastic cards in our wallets, drawers, and purse bottoms? According to a recent survey, apparently almost half of us do.
With the final quarter of the year upon us, this is the time to dig up those unused gift cards and make a plan. Use restaurant cards to take visiting family out to eat during the holidays. Use untouched Amazon, Starbucks, or Target cards to re-gift teachers or kids. Or sell any of them on Facebook marketplace for cash.
Money is ultimately a tool that holds value. But the value comes in actually receiving the goods and services we need and want in life, not in a plastic card hanging out in the junk drawer for later.
And the risk with gift cards is losing that potential value when a business closes, or its value expires. We only used a portion of a restaurant gift card, given to me after caring for a coworker’s dog, before it closed during the pandemic. That’s lost value.
It’s also a good time to order any discounted gift cards you could use for holiday shopping, entertaining, or to give directly as gifts. You can usually get a gift card value greater than the price you pay using credit card rewards or buying gift cards through Costco. For example, you can buy two $50 restaurant gift cards (for various restaurants and dining groups) on Costco.com for $70-80 instead of $100 (if you’re a member or can get help from someone who is).
This can be a useful way to get greater value to put towards Thanksgiving and Christmas expenses if you’re strategic (don’t buy what you don’t already need or won’t use) and plan ahead (physical cards can take time to arrive in the mail).
Why do they sell gift cards for less than face value? Well, I guess they know we lose them in our drawers to the tune of $27 Billion.
Find those unused cards first, and make sure you treat this potential value the same way you do cash.
Start planning strategic use of gift cards now for your various holiday expenses and gifting, so you have one more way to strategically get ahead.
It has been my observation that most people get ahead during the time that others waste.
Henry Ford
I hope you enjoyed this edition of Under 2, an email series designed to share quick bites of wisdom to empower your financial journey (while keeping it short). Be sure to sign-up below to get these messages in your inbox.
All for now,
Lindsey