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U.S.A. Page 8 n THE ASIAN REPORTER January 1, 2024 The secret life of gift cards: Here’s what happens to the billions that go unspent each year UBIQUITOUS GIFT. Gift cards are displayed at a Target store in New York. Americans were expected to spend nearly $30 billion on gift cards during the holidays, according to the National Retail Federation. Restaurant gift cards are the most popular, making up one-third of those sales. Gift cards make great stock- ing stuffers — just as long as you don’t stuff them in a drawer and forget about them. (AP Photo/Richard Drew) By Dee-Ann Durbin The Associated Press G ift cards make great stocking stuffers — just as long as you don’t stuff them in a drawer and forget about them. Americans were expected to spend nearly $30 billion on gift cards during the holidays, according to the National Retail Federation. Restaurant gift cards are the most popular, making up one-third of those sales. Most of those gift cards are redeemed. Paytronix, which tracks restaurant gift card sales, says around 70% of gift cards are used within six months. But many cards — tens of billions of dollars’ worth — wind up forgotten or otherwise unused. That’s when the life of a gift card gets more complicated, with expiration dates or inactivity fees that can vary by state. Here’s what to know about the gift cards you’ve given — or received: Loved, but lost After clothing, gift cards are the most popular present during the holidays. Nearly half of Americans give them, according to the National Retail Federation. But many will remain unspent. Gift cards get lost or forgotten, or recipients hang on to them for a special occasion. In a July survey, the consumer finance company Bankrate found that 47% of U.S. adults had at least one unspent gift card or voucher. The average value of unused gift cards is $187 per person, a total of $23 billion. The gift of time Under a federal law that went into effect in 2010, a gift card can’t expire for five years from the time it was purchased or from the last time someone added money to it. Some state laws require an even longer period. In New York, for instance, any gift card purchased after December 10, 2022, cannot expire for nine years. In Oregon, state law makes it illegal to use inactivity, maintenance, service, or other fees to reduce the value of a gift card. As of January 1, 2012, Oregonians are allowed to redeem most gift cards with a balance of $5 or less for cash. The Oregon law, however, does have exceptions for promotional cards, cards from phone companies, and online gift cards. To learn more, call 1-877-877-9392 or visit <www.doj.state.or.us/consumer-protectio n>. Differing state laws are one reason many stores have stopped using expiration dates altogether, says Ted Rossman, a senior industry analyst at Bankrate. Use it or lose it While it may take gift cards years to expire, experts say it’s still wise to spend them quickly. Some cards — especially generic cash cards from Visa or MasterCard — will start accruing inactivity fees if they’re not used for a year, which eats away at their value. Inflation also makes cards less valuable over time. And if a retail store closes or goes bank- rupt, a gift card could become worthless. Perhaps consider clearing out your stash on National Use Your Gift Card Day, a five-year-old holiday created by a public relations executive and now backed by multiple retailers. The next one is January 20, 2024. Or sell it If you have a gift card you don’t want, one option is to sell it on a site like CardCash or Raise. Rossman says resale sites won’t give you face value for your cards, but they will typically give 70 to 80 cents per dollar. The money trail What happens to the money when a gift card goes unused? It depends on the state where the retailer is incorporated. When you buy a gift card, a retailer can use that money right away. But it also becomes a liability; the retailer has to plan for the possibility that the gift card will be redeemed. Every year, big companies calculate “breakage,” which is the amount of gift card liability they believe won’t be redeemed based on historical averages. For some companies, like Seattle-based Starbucks, breakage is a huge profit-driver. Starbucks reported $212 million in revenue from breakage in 2022. But in at least 19 states — including Delaware, where many big companies are incorporated — retailers must work with state unclaimed property programs to return money from unspent gift cards to consumers. Money that isn’t recovered by individual consumers is spent on public service initiatives; in the states’ view, it shouldn’t go to companies because they haven’t provided a service to earn it. Claim it All 50 states and the District of Columbia have unclaimed property programs. Combined, they return around $3 billion to consumers annually, says Misha Werschkul, the executive director of the Washington State Budget and Policy Center. Werschkul says it can be tricky to find the holders of unspent gift cards, but the growing number of digital cards that name the recipient helps. State unclaimed property offices jointly run the website MissingMoney.com, where consumers can search by name for any unclaimed property they’re owed, including cash from gift cards. Social media companies made $11 billion in U.S. ad revenue from minors, Harvard study finds By Barbara Ortutay and Haleluya Hadero The Associated Press S ocial media companies collectively made more than $11 billion in U.S. advertising revenue from minors last year, according to a study from the Harvard T.H. Chan School of Public Health published in late December. The researchers say the findings show a need for government regulation of social media since the companies that stand to make money from children who use their platforms have failed to meaningfully self-regulate. They note such regulations, as well as greater transparency from tech companies, could help alleviate harms to youth mental health and curtail potentially harmful advertising practices that target children and adolescents. To come up with the revenue figure, the researchers estimated the number of users under age 18 on Facebook, Instagram, Snapchat, TikTok, X (formerly Twitter), and YouTube in 2022 based on population data from the U.S. Census and survey data from Common Sense Media and Pew Research. They then used data from research firm eMarketer, now called Insider Intelligence, and Qustodio, a parental control app, to estimate each platform’s U.S. ad revenue in 2022 and the time children spent per day on each platform. After that, the researchers said they built a simulation model using the data to estimate how much ad revenue the platforms earned from minors in the U.S. Researchers and lawmakers have long focused on the negative effects stemming from social media platforms, whose personally-tailored algorithms can drive children towards excessive use. This year, lawmakers in states like New York and Utah introduced or passed legislation that would curb social media use among kids, citing harms to youth mental health and other concerns. Meta, which owns Instagram and Facebook, is also being sued by dozens of states for allegedly contributing to the mental health crisis. “Although social media platforms may claim that they can self-regulate their practices to reduce the harms to young people, they have yet to do so, and our study suggests they have overwhelming financial incentives to continue to delay taking meaningful steps to protect children,” said Bryn Austin, a professor in the Department of Social and Behavioral Sciences at Harvard and a senior author on the study. The platforms themselves don’t make public how much money they earn from minors. Social media platforms are not the first to advertise to children, and parents and experts have long expressed concerns about marketing to kids online, on television, and even in schools. But online ads can be especially insidious because they can be targeted to children and because the line between ads and the content kids seek out is often blurry. In a 2020 policy paper, the American Academy of Pediatrics said children are “uniquely vulnerable to the persuasive effects of advertising because of immature critical thinking skills and impulse inhibition.” “School-aged children and teenagers may be able to recognize advertising but often are not able to resist it when it is embedded within trusted social networks, encouraged by celebrity influencers, or delivered next to personalized content,” the paper noted. As concerns about social media and children’s mental health grow, the Federal Trade Commission earlier this month proposed sweeping changes to a decades-old law that regulates how online companies can track and advertise to children. The proposed changes include turning off targeted ads to kids under 13 by default and limiting push notifications. According to the Harvard study, YouTube derived the greatest ad revenue from users 12 and under ($959.1 million), followed by Instagram ($801.1 million) and Facebook ($137.2 million). Instagram, meanwhile, derived the greatest ad revenue from users between the ages of 13 and 17 ($4 billion), followed by TikTok ($2 billion) and YouTube ($1.2 billion). The researchers also estimate that Snapchat derived the greatest share of its overall 2022 ad revenue from users under 18 (41%), followed by TikTok (35%), YouTube (27%), and Instagram (16%). The Asian Reporter is published on the first Monday each month. 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