Got gift cards collecting dust? Now's the time to use them
Gift card sales spiked during the pandemic, but now those cards are losing value because of inflation
The gift cards are stacking up for Neil Cooper. After a count, he says he has 19 cards kicking around his home.
"I have no idea how much are on any of these," said Cooper, whose collection of gift cards ranges from The Keg to Canadian Tire.
"We don't really go out that much. Now, maybe my wife will be upset about that because we could go out more. But we haven't been a couple that's gone out for dinner a lot."
Cooper is a busy pediatrician in Calgary who receives gift cards as presents for Christmas or for doing talks related to his work.
And he isn't the only one with a collection of unused gift cards.
Square, a financial technology company that sells mobile payment devices, found Canadians are sitting on more than $33 million worth of unspent gift cards through its platform alone.
And as inflation rises and wears down people's wallets, those gift cards are becoming less and less valuable. Of that money tracked by Square, $20 million is on physical gift cards, while the other $13 million is on digital gift cards.
Cooper used to store his cards in a filing cabinet to keep them organized. But he found he wasn't thinking to use them.
So he moved them to his car's glove compartment, but many still go unused. He's even taken it a step further for his gift cards to Tim Hortons.
"I've taken all the Tim Hortons cards out of the glove compartment and put them with the Tims rewards card with a paperclip on my dash so that it's there," said Cooper.
Pandemic sales spike
Wendy Cogan-Toyoda, who works with Square, says the company collected data about gift card use from hundreds of thousands of businesses, including retailers, restaurants and other services.
"Customers do forget that they have these gift cards lying around. The physical ones and the digital ones. And it's real money that they're leaving on the table," said Cogan-Toyoda.
Toyoda said that during the start of the COVID-19 pandemic, there was a spike in digital gift card purchases to support businesses while they were closed. She says those gift card sales went up by 233 per cent in March of 2020, compared to the year before.
"They were held onto [by] the customers to use for themselves at a later time when the business hopefully reopened. And while many of the businesses have reopened, we still see a high number of sellers with unredeemed gift card balances."
Cogan-Toyoda says the solution is to take inventory of your gift card stock and check the balances so you can take full advantage of your extra funds.
And she says businesses can help with this too, by putting QR codes on the back of gift cards that will provide info about the remaining balance, the location of the business and if there is an online store.
She says it's important for businesses to make sure their customers use those gift cards, even though they already have the money.
"You do want the customer to come back in because, on average, your customers will overspend on that balance," said Cogan-Toyoda.
"Ultimately [businesses] want to see people coming through the door and making sure that they come back, invite more friends and family, possibly reload their gift cards, buy more gift cards."
So spend 'em
Recently, Cooper tried to use one of his restaurant gift cards, but when he went to swipe the card, he was told a different company bought the chain and the gift card was no longer valid.
"I suspect that's going to be the case with maybe one of these. I know that one of these restaurants isn't around anymore," said Cooper. "I guess we just won't use that one."
That's why Bridget Casey says you shouldn't let those gift cards collect dust.
"Use them immediately, as soon as you can," said Casey, a finance expert based in Edmonton who admits she even has stacks of her own unused gift cards.
"Often I'm going to the store with like four or five gift cards just to check the balance."
Caset says they are easy to forget because we don't always carry them with us like we do with cash or a credit card. But leaving that money around can have consequences.
"Especially right now that we're in this high inflation environment, there's a good chance that the good or service that you want to purchase will be more expensive a few months from now," said Casey.
"At any time, as soon as you receive a gift card, try to spend it right away. Like now I try to actually keep mine in my wallet so I will actually see them when I open for my debit card or my credit card."
But, Casey says, don't use it just to use it. Then you run the risk of overspending on the latest piece of technology or buying something you don't need. Instead, put your gift card toward things you would do or buy anyway.
"I'm saying spend your gift cards, and save your actual money."
That's what Cooper plans to do. He wants to make a dent in his pile of gift cards, starting with the restaurants.
"Maybe my wife will be happy on Friday. We'll see."
Produced by Jennifer Keene.