Reward Programs and Gift Cards: A Beginner's Guide

Reward programs pay you in a currency the store prints itself. Stars, points, "cash" that only works at one chain: it's real value, but the store decides the exchange rate, the expiry date and whether the rules change next year. Gift cards are safer, because federal law protects them, with one exception that matters a lot if you earn rewards from survey sites. Here's how both work, and how to keep what you earn.

How points programs pay you

A loyalty program is a discount paid in installments. You buy, you collect points, and once you have enough you swap them for something the store picks. The store gains a reason for you to come back and a detailed record of what you buy.

The exchange rates are all published if you look for them. Starbucks gives Green members 1 Star for every dollar spent, and more at its Gold and Reserve levels, then sells rewards from 25 Stars for $1 off a drink add-on up to 400 Stars for merchandise. Target Circle and myWalgreens work on the same principle with their own units. None of them pays cash.

What the points are really worth

Divide the value of a reward by what you spent to earn it and you get the real rate. For Starbucks, that comes out at a few percent, and only if you redeem before the Stars expire.

What your points and cards are really worth

Worked examples from published terms and fees. Your value depends on what you redeem and when.

$100 spent at Starbucks, Green level (1 Star per $1), redeemed from $1 off a drink add-on at 25 Stars up to a $10 drink at 200 Stars

$4–$5 in rewards

$100 spent at Starbucks, Gold level (1.2 Stars per $1), same rewards

$4.80–$6 in rewards

Selling a $100 gift card you don't want: typical resale offers, to a sale at face value on Raise after its 15% commission

$70–$85 back in cash

The Starbucks rows assume every Star is redeemed before it expires and that drinks cost the maximum reward value. The resale row assumes the card sells; offers vary by brand.

Verified by the editorial teamStarbucks Rewards terms (effective March 10, 2026); Raise seller fees; Bankrate on resale values, Sep 24, 2026

A few percent back on coffee you were buying anyway is a fair deal. A few percent back on coffee you bought to reach the next reward is not a saving at all.

The rules that quietly wipe points out

Points programs have two kinds of small print worth reading before you care about the rewards.

Expiry and inactivity. Starbucks Stars at the Green level expire six months after the month you earned them unless you keep the account active; Gold and Reserve Stars don't expire while you keep your status, and an account inactive for two years can be closed with its Stars. Target Circle rewards expire if you haven't earned or redeemed any for a year. myWalgreens is stricter: go six months without using your Walgreens Cash and everything you've collected is forfeited.

Changes at any time. All three programs reserve the right to change or end the program without notice. That's not a theoretical risk. Target, for example, stopped paying its 1% reward on purchases made without its own card from April 7, 2024. Points are worth what the program says they're worth today, which is a good reason to redeem often instead of saving up.

Gift cards: the law is on your side

Store gift cards and prepaid gift cards sold in the US are covered by federal rules, set out in Regulation E. The key points:

• The money on the card can't expire less than five years after the card was issued or last loaded.
• Inactivity or service fees are allowed only after a year with no activity, only one a month, and only if the card itself says so.
• The fees and expiry terms disclosed before you buy can't be changed afterward.

Your state may add more protections on top. The consumer agency CFPB sums up the practical side: protect the card like cash, because you might not get the money back if it's lost or stolen, and write down the card number and the customer service number when you get it.

The exception: reward and promotional cards

Here's the catch for anyone earning from surveys or apps. The same regulation excludes cards issued as part of a loyalty, award or promotional program. Those don't get the five-year rule. In exchange, they must say on the front that they're promotional, show the expiry date on the front, and disclose fees and a toll-free number for questions.

Many survey panels don't send a card at all. They send a reward link through a service like Tango Card or Tremendous, and you pick the brand. Tremendous says a reward must be redeemed before the expiration date shown under the Redeem button, that there's no expiry if no date is shown, and that an expired reward is voided. Open those emails when they arrive, not when you remember them.

The drawer full of cards

Unused gift cards are a bigger leak than most people think. In a 2024 Bankrate survey, 43% of US adults had at least one unused gift card, voucher or store credit, worth $244 on average, and 34% had lost money to a gift card mistake: letting it expire, losing it, or holding it until the store closed.

If you won't use a card, selling it beats keeping it. On Raise, listing is free and the platform takes a 15% commission when the card sells, paying out by bank transfer or PayPal. CardCash pays by check, bank transfer or PayPal, usually within 1 to 2 business days of approving your order. Buy and sell only through established sites: the FTC warns that cards on online auction sites may be fake or stolen.

Keep what you earn from disappearing

1. 1

   Pick one or two programs

   Points spread across five stores rarely reach a useful reward before they expire. Concentrate on the shops you use every week.

2. 2

   Put the expiry dates in your calendar

   For points, note the inactivity rule. For reward cards and reward links, note the date printed on the card or shown in the email.

3. 3

   Treat gift cards like cash

   Write down the card number and the customer service number, register the card if the issuer allows it, and keep the receipt.

4. 4

   Spend or sell within a few months

   The longer a card sits in a drawer, the more likely it is to be lost, forgotten or stuck with a store that closes.

Gift cards and scams

Because gift cards are hard to trace, scammers love them. The FTC's rule is absolute: only scammers will tell you to buy a gift card and give them the numbers off the back. No real company, utility or government agency asks to be paid that way.

When you buy a card as a gift, check the packaging first. The FTC advises making sure the protective stickers are intact and the PIN isn't showing, because tampered cards can be drained before anyone uses them. Keep the receipt and a photo of the card.

Taxes

Points you earn on your own purchases generally work like a discount. The IRS treats a cash rebate on something you buy as a reduction of what you paid rather than income. Prizes are different: they count as income at their market value, whether they arrive as cash or goods. Gift cards from an employer are always taxable, whatever the amount.

The IRS doesn't address survey or app rewards by name, and Walgreens' own terms warn that rewards may be taxable. For payments made from 2026, companies file a 1099-MISC only once they reach $2,000 in a year, but reporting income is your job whether or not a form arrives.

Our take

Join the programs of the two or three shops you already use, redeem as soon as a reward is useful, and never let a points balance or a gift card sit for months. The value in all of this is small and fragile: it's worth having, as long as you don't let it change where or how much you spend.

You asked

Can a gift card really expire?

A store gift card or a general-use prepaid gift card sold in the US can't have funds that expire in less than five years. The plastic card itself can expire sooner, but you can ask for a free replacement. Reward, loyalty and promotional cards are a different category: they can expire sooner, and the date has to be on the front.

Is a gift card from a survey site a real gift card?

Usually it's delivered as a code or a reward link from a service like Tango Card or Tremendous, and you choose the brand. Redeem the link before any expiry date shown in the email; once you pick a card, that card's own terms apply.

Do I pay tax on points and gift cards?

Store points earned on your own purchases generally work like a discount. Prizes, including those paid as gift cards, count as income at their market value, and gift cards from an employer are always taxable. The IRS doesn't address survey rewards by name; if yours add up, ask a tax adviser.

Someone asked me to pay a bill with gift cards. Is that normal?

No. The FTC is clear that only scammers ask to be paid with gift card numbers. If you already did, call the card company right away and report it at ReportFraud.ftc.gov.