Iowa state treasurer: Use caution with gift cards

Shoppers in the U.S. spent an estimated $160 billion on gift cards in 2018, up from around $90 billion a decade earlier. The holiday season is the peak time for those purchases.

State Treasurer Michael Fitzgerald has warned that much of the value will go to waste. Years ago, his office had a tool to help Iowans recoup the cost of unused gift cards. But state legislators had a different idea.


Speaking to Bleeding Heartland earlier this year, Fitzgerald mentioned that while lots of people like giving and getting gift cards, “I always just give cash, because 15 percent of those are never cashed.” Many lose the cards, or put them away and forget about them.

Business practices can contribute to the problem. Some retailers won’t honor a gift card after a certain period of time. Or, consumers who spend less than the face value on an initial visit may find they are unable to use the balance later.

In a November 15 news release, Fitzgerald offered the following advice to protect the value of such purchases.

  • When purchasing a gift card, buy from a known and trusted source.
  • Ensure the card is valid. Make sure none of the protective stickers have been removed or codes on the back of the card have been scratched off.
  • Include the original receipt and disclosure information with the card when given to the recipient. This is helpful if the card is lost or stolen.
  • Verify if the card has an expiration date or fees that reduce the card’s value over time.
  • Use the card as soon as possible
  • If you leave the card sitting in a drawer forever, the State Treasurer’s office can no longer help you get your money back.


    Under a 2009 federal law, “gift cards cannot expire within five years from the date they were activated.” Some states have adopted additional regulations, so that after a certain amount of time, unused cards are considered abandoned property.

    The treasurer’s office manages the Great Iowa Treasure Hunt, a program Fitzgerald created in 1983 (his first year in office) to help Iowans recover unclaimed property.

    “If you don’t use that gift card within a year, it’s probably lost, or you’re not going to use it,” Fitzgerald told Bleeding Heartland. Businesses “know that, we know that.” His office used to receive “an average of $320,000 of unclaimed gift cards annually from businesses,” under a code section that states intangible personal property is presumed abandoned if unclaimed after three years.

    “And businesses knew, that’s big money,” Fitzgerald said.

    When the matter came before the Iowa legislature, he added, “this is where big business rolled over us.”


    I had never heard of House File 2296, probably because it passed both chambers unanimously during the 2014 legislative session, and Governor Terry Branstad signed it with no fanfare. Controversy attracts the attention of political reporters. With no objections in either the Republican-controlled House or Democratic-controlled Senate, a bill easily escapes notice.

    The House Commerce Committee, chaired by Republican Peter Cownie at the time, introduced the changes to unclaimed property provisions applicable to gift cards and gift certificates. State Representative Pat Grassley (who will soon become the Iowa House speaker) floor-managed the bill in the lower chamber. The Senate Commerce Committee, under the leadership of Democratic State Senator Matt McCoy, tinkered with the text. The gist was the same: if a gift card or certificate has no expiration date, and businesses promise to honor it indefinitely, it is never presumed to be abandoned.

    In other words, “they don’t have to report it” as unclaimed property and turn the value over to the state treasurer’s office, Fitzgerald explained.

    “When they passed it in the state, they called it the Pizza Ranch bill, because they had so much influence,” he remembered during our interview. The lobbyist declarations show the State Treasurer’s office was the only entity registered against the bill. Groups lobbying for it included the Iowa Lodging Association, the Iowa Restaurant Association, the Iowa Retail Federation, and the Iowa Grocery Industry Association.

    Business representatives argued it was too hard to keep track of unused gift cards, Fitzgerald said. In reality, “they just knew they’d cashed in a lot of money.”

    In light of the growing popularity of gift cards, “That was another avenue of unclaimed property that should have been,” the treasurer believes. Unfortunately, “this business-friendly environment” means “business gets everything they want.”


    Ideally, consumers would enjoy the full value of gift cards by using them promptly, as mentioned above. But what if you find a misplaced or long-forgotten card or certificate, only to have it rejected when you try to spend it?

    The treasurer’s office wants to hear from Iowans “with questions or concerns regarding an expired gift card not being honored by a retailer.” Consumers should briefly explain the circumstances and include a copy of the gift card with their letter, which can be e-mailed to or mailed to:

    Michael L. Fitzgerald
    Treasurer of the State of Iowa
    Unclaimed Property Reporting Desk
    State Capitol, Des Moines, Iowa 50319

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