The rule that means Delaware rakes in millions from unused gift cards (2025)

Delaware is quietly making $25 million each year - thanks to forgotten and expired gift cards.

A strange legal quirk means that companies incorporated in the First State must surrender a chunk of their unused gift card profits to the state.

These funds are considered abandoned property if the cardholder has a Delaware address - or no US address at all.

This money is then reclaimed by the state and spent on public service initiatives because in the state's view these companies haven't provided the service paid for.

The reason Delaware profits enormously from unused gift cards is because such a disproportionate amount of companies - - are incorporated there.

Around $6 million-worth is returned to owners or the companies in gift card claims, Delaware's unclaimed property director, Brenda Mayrack, told DailyMail.com.

'Claimants may come forward at any time in the future to recover the unused gift card balances by presenting the unique gift card serial number and identification,'Mayrack explained.

Gift cards are a popular way to shop for hard-to-buy-for relatives, or an easy win for the office secret Santa, but many get lost or simply forgotten about.

The problem is extensive. More than two in five US adults have at least one unused gift card, according to survey data from Bankrate.

There is roughly $27 billion sitting forgotten in consumers' wallets, according to Bankrate's research.

And $15 billion of that is estimated to go unspent, according to Use Your Gift Card Day,an organization dedicated to encouraging consumers to redeem their unspent dollars.

Starbucks has almost $2 billion of unspent gift cards on their books alone, according to Bankrate.

Starbucks did not immediately respond to DailyMail.com's request for comment.

Gift cards cannot expire for five years under federal law, and some states such as New York allow for even longer.

However, companies that have expired gift cards on their books must eventually report the profit to the state they are incorporated in.

What happens to that money is dependent on each state's unclaimed property laws.

Use Your Gift Card are campaigning to keep that money in businesses' hands and in the local economy, as well as help consumers squeeze the most value from their gift cards.

The average American has $244-worth of gift cards lying around, according to research from Bankrate.

'Use them sooner rather than later,' TedRossman asenior industry analyst from Bankrate cautioned consumers.

'Plan ahead and buy gifts for birthdays coming up, plan a meal out or sell it for a cut on websites like cardcash.'

'When there is an economic downturn, this is cash hiding in plain sight,' he added.

Apart from being lost to state spending, leaving a gift card for too long amid elevatedinflation erodes its spending power as prices rise.

If a retail store closes or goes bankrupt, a gift card could even end up becoming worthless.

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