Tuesday, June 30, 2009

The gift that keeps on taking....

We've written before about why gift cards are a big mistake (See our Jan. 6 post). Now comes even more evidence.

Today's Wall Street Journal reports that state governments are trying to grab those gift cards that are lying unused in your wallet, dresser drawer or purse.

Why? Big money, of course. Each year, Americans spend about $65 billion on gift cards -- but don't redeem $6.8 billion. In the past, that's meant free money for the big retailers that issue these cards. Home Depot Inc., for instance, reported $37 million in revenue from unredeemed gift cards in 2009. And last year, American Eagle Outfitters Inc. collected more than $12 million.

Now, cash-strapped states want in on the action. They want to consider unredeemed gift cards as "abandoned property" -- like that old safe-deposit box that Uncle Elmer had forgotten about. And, as abandoned property, the gift cards are no longer yours. Which is just one more reason gift cards are a bad idea.

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