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%).
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