Canadians sitting on gift cards with unused balances, survey finds
TORONTO -- The gift card has become a popular present for holidays, birthdays and special occasions, but too often they're forgotten about, lost or just never used.
Square, a payments company that tracked gift card spending, says almost half of the gift cards sold through merchants using its system have never been redeemed.
Square said that data from the hundreds of thousands of businesses using its services in Canada shows that 45 per cent of gift cards have not been used.
That’s $17.5 million worth of unredeemed gift cards.
If the figure included all payment systems in Canada the number would be far higher.
“We are hoarding. We are sitting on our gift cards and it’s a split between the actual gift cards and e-cards" said Pattie Lovett-Reid, CTV’s Chief Financial Commentator.
Many stores love gift cards because people buy them and give them as presents and when they are not used it’s like free cash for retailers.
Holding onto unused gift cards may have gotten worse during the pandemic as many stores have been closed due to COVID-19 restrictions.
While gift cards can't expire in Ontario, people are advised to try and use them before they lose them.
Square said the split is fairly equal on gift cards that have not been used. About $8.9 million in physical gift cards and $8.6 million in e-gift cards.
While gift cards in Ontario must never expire and keep their full value there are some exceptions. Pre-paid credit cards, mall gift cards and gift certificates for a specific service like a pedicure can expire or have added fees.
Another reason to try and use a gift card when you receive it is because if a business goes bankrupt, someone with a gift card is considered an unsecured creditor and the gift card is generally worthless.
Another issue with gift cards is they can have a zero balance due to fraud or a problem when they were activated.
It’s why you should always give the receipt with a gift card and advise the person to use it as soon as possible in case there is a problem.