If someone gives you a prepaid gift card this holiday season, I want you to run out and spend it right away. Why? Because if you don’t, the government will swoop in and help themselves to your money.
No, I’m not making this up. Apparently, there’s an old law on the books that allows states to claim abandoned property. Originally, it was put in place so that the government could legally rid themselves of abandoned buildings and junked cars that were still privately owned. But now it’s being applied to your prepaid gift cards too.
Basically, what happens is when a gift card is bought; the amount and date of purchase are logged into a database. But after a certain amount of time . . . typically five years, or three years in California . . . the government considers your gift card abandoned property.
At which point the retailer is forced to hand over the money you never used to the government. And it’s seriously big business.
According to the “Times-Union” newspaper, the state of New York collects an average of $3.8 million every year in unclaimed gift card money. (–How weak is that?)