The Decay Rate of Gift Cards

After staring at some gift cards that we received back in December, I started thinking about their decay rate.

If you didn’t know, many gift cards can charge an inactivity (or dormancy) fee if they are not used within 12 months of activation. The 12 months waiting period is actually the result of a federal law, and some states have additional rules that protect the consumer. For example, some states do not allow inactivity fees while other states require the cards to have an activation or expiration date printed on the card.

In my state (Wisconsin), we only have the federal laws to rely on. So, if you wait too long, then that $10 card for Kwik Trip can disappear. This is also something to consider when giving gift cards — don’t buy them too early or re-gift an old one from the drawer.

To better appreciate the impact of gift card decay, I made a spreadsheet that illustrates the loss for a variety of gift card values. I set up the spreadsheet in Google Sheets using two functions that I’ve never worked with before: ceiling() and ArrayFormula(). These two functions allowed me to limit the displayed rows based on the gift card’s initial value.

You can get a copy of this sheet if you’d like to explore these functions for yourself.