Perhaps you’ve received a couple, or even a full hand of gift cards over the holidays or on your birthday. A popular and convenient way to gift without the risk of disappointing the recipient, gift cards can be good for the consumer. However, they may be even better for the retailers that sell them, as they:

• give the retailer instant money (it’s like an interest-free loan from you to them);

• are frequently lost or forgotten about (A U.S. study by CardHub reported that $44 billion in gift cards went unused between 2008 and 2014);

• encourage you to spend more. Even with a small balance on a gift card you’re likely to spend an estimated 20% more than the cards’ original value in order to use it (a big win for the merchant). Alternatively, you may tuck it in a drawer never to be seen again (also a win for the merchant).

So how do you play your cards right?

1. Know when to hold them

If you have a retail card and anticipate an item going on sale in the near future, it may pay to hold off and spend it when the item(s) go on sale.

Most retail cards now let you hold on to them indefinitely, without any loss of value. Others, such as Starbucks cards, may offer loyalty points when you register them.

2. Know when to trade them

Perhaps your gift card at House of Ceramics may not incite you to rush out and spend it in the near future. Perhaps you would rather have the money to spend at another retailer. On-line marketplaces such as cardswap.ca and Cardpool.com allow you sell your cards (for a small percentage fee) or buy cards (often at a discount). A good option for cards that you’re not likely to redeem.

3. Know when to cash them in

Almost all retail cards issued after 2008 cannot have expiry dates. However, beware of gift cards issued by shopping malls (for use at the mall retailers). Not only can they have expiry dates, but they also charge activation and dormancy fees – diminishing your card’s value the longer you have it.

You may also have cards with retailers that are struggling. In a competitive retail environment, hanging on to a card too long may leave you with one that is worthless if the retailer goes bankrupt. Target Canada gift card holders found this out the hard way, as did Mexx and Jacob card holders upon those retailers’ demise. 

4. Safeguarding your cards

Keep them all in one safe place where you won’t forget abut them. If you have several cards with small balances from one retailer, ask if you can consolidate them into one card. And register cards on-line where possible. This may allow you to recoup the remaining balance should the card be lost or stolen.