Everyone has opened a holiday gift and tried to keep a straight face to not betray how terrible the present was. Maybe it was an inconsiderate gift, a lazy one, or a gift from a family member who does not realize that your adult interests may not be the same ones you had as a child.
In most cases, as long as you don't openly gasp, a bad gift can be returned. That, of course, might lead to store credit at a retailer you may not choose to shop at, but that's better than whatever your family, friend, or coworker bought you in the first place.
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Gift cards, however, are a little trickier. They generally can't be returned and, in many cases, they're to a store the gift receiver assumes they will visit at some point.
Even non-coffee drinkers visit Starbucks and you might not be a regular at whatever mall-based chain you got a gift card for, but that doesn't mean you won't visit to use your free money.
The problem is that billions of gift cards go unused every year.
United Airlines (UAL) -) has an interesting solution for consumers who find themselves with gift cards that they don't want or may not use.
Image source: TheStreet
United Airlines wants your gift cards
A number of third-party exhanges allow people to sell gift cards or may even buy them (albeit for less than face value). Gift cards can, of course, be regifted, but none of those are attractive solutions.
United Airlines, however, has a solution called the MileagePlus Gift Card Exchange. The airline describes its offer on its website:
"Exchange your gift cards for MileagePlus award miles."
It's a fairly simple three-step process:
- Select the retailer for which you have a gift card (the airlines accepts over retailers' gift cards).
- Enter the gift card information so United can convert it into Mileage Plus award miles.
- Accept the offer and have the miles deposited into your account.
"You'll be able to preview the amount of award miles offered for your gift cards before submitting them for an exchange," according to the airline. "You'll receive the full value remaining on your gift card in award miles."
The airline has not shared the formula it will use for the conversions.
"The amount of award miles offered in exchange for the gift card varies and includes a 7.5% federal excise tax," the airline added.
No other major U.S. airline offers a similar program.
How big is the gift card problem?
Billions of dollars in gift cards go unused every year. That's partially because people don't use the entire balance and then forget about them and at least parly from cards that never get used at all.
"Nearly half (47%) of U.S. adults have at least one unused gift card, gift voucher or store credit, according to a recent Bankrate study. "Those gift cards aren’t small change: The average value is $187 per person — a total value of $23 billion nationwide."
Gift cards are big business for retailers who offer them (and not just because some won't get used.
"61% of consumers spend more than a gift card’s value when redeeming, for an average of $31.75 more than the card’s value," according to a report from Capital One.
Gift cards, a $339.5 billion business in the U.S., has also been growing steadily at 8.2% per year.
"Nearly 50% of consumers purchase gift cards because they are convenient," according to the Capital One study. "54% of U.S. consumers buy gift cards as holiday gifts."
