United Airlines Will Turn Your Unwanted Gift Cards Into Miles

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Aaron M. Sprecher / Bloomberg via Getty Images

Your unused gift cards might be worth frequent flyer miles.

Still don’t know what to do with all those gift cards you got for the holidays? United Airlines will now take them off your hands in exchange for frequent flyer miles. But considering how often frequent flyer miles expire unused, you might want to do some careful planning before executing the trade.

On Monday, the airline launched MileagePlus Gift Card Exchange, a program that will allow members to convert unused or partially used retail gift cards into frequent-flyer miles. The airline will accept gift cards from more than 60 retailers, including Barnes & Noble, Home Depot, the Gap, Bed Bath & Beyond, Office Depot, Sears and Target. Your gift card has to have at least $25 on it. If not, United won’t accept it. You also can’t combine the values on separate gift cards or put a portion of a gift card toward miles. Still, it’s a worthwhile option if you don’t expect to use your gift cards — especially given the billions in gift card currency that goes unredeemed every year.

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United isn’t the first to capitalize on unused cards. Sites like Plastic Jungle and Gift Card Rescue have been around for a while and will give cash for cards. But United’s is the first to convert unused or partially used cards into mileage points.

Here’s how it works: If you’re already a member of MileagePlus, you log onto the site, select the gift card retailer and enter the card’s information. United will then verify the card, convert the balance to miles and deposit them into your account.

But not all gift cards are created equal. Some retailers’ gift cards will generate more miles than others, depending on how in-demand those cards are. (Beware: There’s also a 7.5% federal excise tax on any exchanged miles.) However, the value of one mile is generally estimated to be anywhere between 0.7 cents and 2.5 cents, the latter of which is the value Citibank has placed on each mile in its attempt to get customers to pay taxes on them.

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It’s unclear what exactly United will do with all those gift cards, but they clearly see a way to take advantage of our unredeemed card endemic. Since 2005, $41 billion worth of gift cards have gone completely unused, and an estimated $2 billion is set to be unredeemed this year.

Just keep in mind that you may be converting unused cards into unused miles. In fact, frequent flyer miles go unused at a rate far higher than gift cards. While it’s estimated that 5% to 7% of cards go unredeemed each year, some travel experts estimate that 75% of our mile rewards are never redeemed.

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