Image Source: 123rf.com
Imagine a dusty drawer, stuffed with colorful prepaid gift cards, each loaded with secret cash. Now picture that drawer belonging to someone who’s no longer around to swipe them at checkout. Those hidden balances don’t just vanish into thin air—they sit in limbo, waiting for someone to claim them.
This is where the drama begins: retailers, card issuers, and heirs all have a stake in the outcome. What happens next depends on the fine print, state laws, and whether anyone even knows the cards exist.
The Legal Side of Prepaid Cards in Estates
When someone passes away, their assets—big and small—become part of their estate, and prepaid gift cards count as assets. The catch is that many heirs don’t realize these cards have legal value or how to claim them. In probate, gift cards may be declared as personal property, but they’re trickier to handle than cash in a bank account. Without receipts or account numbers, proving ownership can be difficult. That’s why so many cards simply go unused after an owner’s death.
Retailer and Issuer Policies
Each card issuer sets its own rules about what happens to a prepaid gift card after the owner dies. Some will transfer balances to an heir if proof of death and legal authority are provided. Others may require the card itself, receipts, and estate paperwork before unlocking the funds. Expiration dates and inactivity fees can also complicate retailer policies. If no one acts in time, the money can slowly disappear through deductions until nothing is left.
State Escheatment Laws
In many states, unused gift card balances are considered unclaimed property after a certain period. When that happens, the value must be turned over to the state, which then holds it for rightful heirs. This process is called escheatment, and it can save money from quietly expiring in corporate accounts. However, the time limit before escheatment varies widely, and some states don’t apply the rule to certain prepaid cards at all. Knowing the local law is key to recovering funds.
The Challenge of Discovering the Cards
The biggest obstacle in reclaiming prepaid gift card money is often simply finding the cards in the first place. Many are tucked into wallets, glove compartments, or junk drawers with no clear record of their value. Unlike bank accounts, they usually aren’t listed on financial statements, making them easy to overlook. Heirs may stumble upon them accidentally or miss them entirely. This makes organization during life one of the best tools for preserving one’s worth after death.
Digital Gift Cards and Online Accounts
The rise of digital gift cards adds another twist to the story. Without access to the deceased person’s email or online accounts, heirs may never know these balances exist. Even if they are found, digital cards may require login credentials or security codes to redeem. Privacy rules and terms of service can make it hard for companies to release information to anyone but the original owner. This can leave substantial sums locked behind digital walls.
Image Source: 123rf.com
The Problem with Expiration Dates and Fees
While many prepaid gift cards boast “no expiration date,” some still have small-print clauses that drain value over time. Monthly inactivity fees, maintenance charges, or replacement costs can whittle down balances before heirs even know the card exists. In some cases, these deductions are legally allowed after a certain period of non-use. That means waiting too long to act could turn a $200 card into a worthless piece of plastic. The clock can be as much of an enemy as the paperwork.
How Heirs Can Claim the Value
If an heir finds a prepaid gift card, the first step is to check the issuer’s contact information on the back. Calling the issuer and explaining the situation can reveal the required documents, which often include a death certificate and proof of executor status. Acting quickly can stop fees and prevent funds from being lost to escheatment. In some cases, issuers may simply reissue the card in the heir’s name. Persistence pays off when it comes to navigating corporate and legal hoops.
Why Many Cards Are Never Redeemed
Despite all the ways to recover prepaid card funds, a surprising number go unused forever. Lack of awareness, missing documentation, and confusion over rules are the main culprits. Some heirs underestimate the value of the cards or assume it’s not worth the hassle. Retailers rarely go out of their way to track down heirs or notify them. As a result, billions of dollars in prepaid card balances vanish into company profits or state coffers each year.
Planning Ahead to Avoid Loss
The easiest way to ensure prepaid gift cards survive an owner’s death is to treat them like any other asset. Keeping a clear, updated list of cards, values, and issuers can make them visible in the estate process. Adding instructions to a will or sharing details with a trusted person also helps. For digital cards, storing account logins in a secure but accessible place can prevent them from becoming unreachable. A little planning can turn potential waste into a valuable gift for loved ones.
Don’t Let Prepaid Value Slip Away
Prepaid gift cards might seem small compared to bank accounts or property, but their value is just as real. After an owner dies, these cards can either be a welcome find for heirs or a forgotten fortune for corporations and states. Laws, issuer rules, and timing all play a part in determining the outcome. By understanding how to claim them—and by making them easy to find—families can keep more of what was intended for them.
Have thoughts or experiences with prepaid cards after a loved one’s passing? Share them in the comments.
Read More
10 Last-Minute Gift Ideas That Will Actually Make Your Wife Love You More
Here Are 8 Gifts that Are More Fun to Give Than to Receive
Leave a Reply