Tuesday, October 9, 2012
A lost asset investigation and recovery firm believes it is only a matter of time until every U.S. state passes legislation that allows state governments to collect funds on unused gift cards. While retailers will ultimately lose out, as they will no longer be able to claim unused gift card balances as profit, consumers will be the ultimate winners, as they will be able to collect those balances from the state, according to UnclaimedMoneyDiscovery.com.
The asset recovery firm said an estimated $100 billion in unclaimed property is being held by the states. But gift card "breakage," which represents between 12 percent to 15 percent of the $65 billion total loaded onto gift cards annually, will make the unused gift card balance segment of states' unclaimed property the largest segment, the firm noted.
"For every $100 dollars spent on a gift card at Walmart, K-Mart, Target, Victoria's Secret or any other retailer out there today, an average of $12 to $15 goes unused; permanently unused," said Dan Anderson, an UnclaimedMoneyDiscovery.com representative.
Currently, that breakage translates into about $6.8 billion in annual profits for retailers, according to the firm. It said Maine was one of the first states to realize the opportunity to seize its portion of that money for state coffers. New York, Texas, New Jersey and North Carolina followed in updating their unclaimed property laws to include unused gift card funds.
The firm called this movement a "victory" for consumers, in that they can claim that money from states if they can prove ownership of the funds, which can be tricky. The firm advised consumers to keep records of gift card purchases and log gift card account numbers. After unused gift card amounts remain dormant for a period of time beyond the cards' expiration dates, consumers will be able to claim that money, perhaps as 10 percent to 15 percent cashback at the POS, the firm said.
However, the firm stated it is unlikely consumers will ever claim this money, which will result in those funds remaining in state treasuries. "This, of course, translates into potentially pure profit for the states – profit that is desperately needed," the firm said.
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