January 20 Is National Use Your Gift Card Day. Should You Participate?

Gift cards are a popular holiday gift, but not always a useful one. An estimated $15 billion worth of gift cards go unspent, which means people are spending a lot of money buying gift cards at stores that are never redeemed.

To help encourage people to actually use the gift cards they bought or received, the third Saturday in the month of January has been designated as "National Use Your Gift Card Day." This year, that falls on Jan. 20, 2024. This is the fifth annual National Use Your Gift Card Day, and there are a number of big-name brands promoting the event.

So, should you participate and use the cards you received either this holiday season or in past years? Here's how you can decide.

Is it a good idea to use your gift cards this Saturday?

There is one obvious benefit of participating in this designated day: You will be able to use up the funds that have been provided to you on a gift card, rather than having those cards sit around and be wasted. Not spending the money is essentially leaving free cash on the table.

If you can use the gift cards to buy things you'd otherwise put on your credit cards, then participating also makes sense. After all, why ding your personal finances if you can pay for essential purchases with a gift card instead?

However, if you have a gift card that you could use to buy essentials, chances are you would have used it already or would be planning to soon. You wouldn't need to be encouraged to spend it on a special day.

The reality is, many of the gift cards that go unused do so because they can only be used for items you wouldn't otherwise buy or are for stores you would not otherwise shop at. And if that's the case, participating in National Use Your Gift Card Day could be a mistake for a couple reasons:

• It's silly to purchase items you don't want or need just to use up the card. They'll end up cluttering up your house.
• You could find yourself spending money on items you don't actually want. Around 59% of people who redeem gift cards spend over face value. That means you'll essentially be buying something just to use the gift card and wasting that extra cash out of your checking account to do so. Say, for example, you got a $25 card for a clothing store you don't shop at and the cheapest thing to buy there was $35. You'd now be spending $10 out of your own pocket for something you wouldn't have bought if you didn't have the card.

If you're in this situation, then you'd actually be worse off for spending the money than if you just let the card sit in a drawer (especially since, by law, gift cards generally can't expire for at least five years).

What should you do instead?

If you have a gift card you don't really want to use, don't just take it out and spend the money because retailers are encouraging you to do so by designating a National Use Your Gift Card Day. Instead, consider:

• Donating the gift card to charity (you may be eligible for a tax deduction).
• Selling the gift card (although you'll probably get less than face value, it's better than spending extra money just to use it).
• Buying something you could resell.
• Regifting the card (just be sure you give it to someone who would like it, so you don't make using an unwanted card someone else's problem).

Any of these approaches could be smarter, so unless you really want to buy something with your card, just say no to National Use Your Gift Card Day.