CA: Millions of dollars are sitting on inactive Clipper cards. What happens to the money?

The amount of money stored on inactive Clipper cards has nearly quadrupled since the pandemic, a Chronicle data analysis found.

Clipper cards are deemed "inactive" when they haven't been used for at least three years. But that doesn't mean the funds are inaccessible to the cardholder — a person's unused balance on a Clipper card remains available regardless of how long it's been since the card was used, according to Clipper.

The Chronicle began looking into Clipper funds after Maxim Massenkoff, an economist at the Naval Postgraduate School in Monterey, shared data he received from Clipper about card loadings and expenditures. The Chronicle focused its analysis on inactive funds to understand what happens to the funds that aren't used.

As of the end of 2019, there were $7.8 million on inactive Clipper cards. By the end of 2023, that number had jumped up to $29 million.

The number has also grown as a share of all the money on Clipper accounts, active and inactive, that has been loaded onto cards but not yet used. While inactive funds accounted for about 9% of all unused funds on Clipper cards at the end of 2019, they accounted for 20% of all the funds at the end of 2023.

John Goodwin, a spokesperson for the Metropolitan Transportation Commission, which oversees the Clipper system, said that "it's impossible to identify any single reason" why the balance on inactive cards grew so quickly, but that changing commuting patterns due to the pandemic are "certainly a factor."

It's possible, for example, that many commuters loaded balances onto their Clipper cards, but have since stopped riding public transit amid persistent office shutdowns. Clipper cards last used in early 2020 would have become inactive in 2023.

It might not just be commuters, Goodwin said. He also pointed to tourism as a reason why inactive balances grow from year to year.

"One can easily imagine a visitor buying a Clipper card from a vending machine at BART, loading it with, say, $20 of value and then using just $15 of that value before heading back to San Diego or Sydney or Stockholm with a card carrying $5 of value," he said, noting that around 20,000 Clipper cards are distributed at BART stations each week.

That means the value on the Clipper card of someone who visited in 2018 and never used the card again was officially deemed inactive in 2021. Unused funds by visitors in 2019 were deemed inactive in 2022, and so on — and the money keeps adding up.

Historically, very few of those inactive cards are brought back into use. Goodwin said that each year, just 5-6% of cards deemed inactive are reactivated by customers.

The money isn't just sitting there untouched, however. Goodwin explained that the inactive funds, as well as other funds in the Clipper system, are invested. This year, that money has generated about $600,000 in interest each month, he said.

And sometimes the inactive funds specifically are tapped to help cover operating expenses. Between 2018 and the end of 2023, a total of $11.1 million was disbursed from the inactive funds balance with approval from the Clipper Executive Board. Another $2.7 million disbursement was approved earlier this year.

But even with those disbursements, the cash value on any one customer's card is still available to them, David Weir, who works on electronic payments for the MTC, said in a Clipper Executive Board meeting earlier this year. And in a 2023 board meeting, he said that previous disbursements of the inactive funds had not affected the ability of any customer to access their Clipper card balance, no matter how long it had been unused.

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