What happens to gift cards after Christmas holiday season?

Americans are expected to spend nearly $30 billion on gift cards this holiday season, according to the National Retail Federation. Restaurant gift cards are the most popular, making up one-third of those sales.

Most of those gift cards will be redeemed. Paytronix, which tracks restaurant gift card sales, says around 70% of gift cards are used within six months.

But many cards — tens of billions of dollars’ worth — wind up forgotten or otherwise unused. That’s when the life of a gift card gets more complicated, with expiration dates or inactivity fees that can vary by state.

Here’s what to know about the gift cards you’re giving — or getting:

LOVED, BUT LOST

After clothing, gift cards will be the most popular present this holiday season. Nearly half of Americans plan to give them, according to the National Retail Federation.

But many will remain unspent.

Gift cards get lost or forgotten, or recipients hang on to them for a special occasion. In a July survey, the consumer finance company Bankrate found that 47% of U.S. adults had at least one unspent gift card or voucher with an average value of $187. That’s a total of $23 billion.

THE GIFT OF TIME

Under a federal law that went into effect in 2010, a gift card can’t expire for five years from the time it was purchased or from the last time someone added money to it. Some state laws require an even longer period. In New York, for instance, any gift card purchased after Dec. 10, 2022, can’t expire for nine years.

Differing state laws are one reason many stores have stopped using expiration dates altogether, says Ted Rossman, a senior industry analyst at Bankrate.

USE IT OR LOSE IT

While it may take gift cards years to expire, experts say it’s still wise to spend them quickly. Some cards — especially generic cash…