How Long Should You Keep Receipts?

by Travis Pizel · 10 comments

Receipts are a topic of controversy in my home. They take up spaces in our pockets, purses, wallets, and you can never find the exact one you need (until months later of course). In other words, the little scraps of paper are a scourge in the side of clutter-haters everywhere.

Within minutes of walking through our front door I decide whether to keep a receipt or dispose of it. Grocery receipts are automatically tossed, clothes are looked over one more time to ensure they are satisfactory, and any major purchase with a warranty has the receipt filed away in a fire-resistant box.

How long are you supposed to keep receipts? Is it worth the extra time and energy to save them for future use? Which ones are worth keeping and which ones can be tossed?

These are always the questions that come up in our house. I admit, our receipt disposal system doesn’t work all that well. The phrase, “Where’s the receipt for this?” spoken by my wife wanting to return a shirt two months after she purchased it has struck fear into my soul more than once.

She’s trying to train me to keep receipts longer, and I’m doing my very best to learn. But something happened recently that may have finally driven the point home.

Keeping a Receipt for Two Years

I received a postcard in the mail regarding a class-action lawsuit for a pre-workout supplement I used for awhile. The product was reformulated several years ago to remove an ingredient some were calling unsafe.

Apparently, someone initiated a lawsuit against the manufacturer as well as a major nutritional retailer claiming they knew about the potential dangers and sold it anyway. A settlement was agreed upon, and customers who purchased one or more of a handful of products were eligible for a payout from the settlement.

I purchased two separate products on the list, and am eligible for $35 for each bottle of product A, and $20 for each package of product B up to a maximum of $150 if no receipts can be provided. However, if a receipt can be provided, for purchases made from August 2012 until now, by the cut-off date then the cap is $300. Wow, $150 difference if you have the receipt from a purchase made two years ago!

Creating a Receipt Disposal Strategy

But seriously, who keeps receipts for dietary supplements — or any purchase for that matter — that was completed over two years ago?

I obviously did not, therefore my settlement payout is capped at $150 even though I purchased enough of the product to blow way past the maximum. The whole situation has be rethinking my receipt disposal strategy.

How long should you keep your receipts? Here is a simple system to put in place:

  • Have an accordion folder labeled for the current year, with one folder per month
  • Place receipts for every purchase into the appropriate folder
  • Hold on to the receipts for five to seven years (which is the IRS claim/amendment maximum), then recycle that year’s accordion folder

Although the clutter hater in me screams this is overkill, another part of me points out the $150 I’m not able to receive from this lawsuit, would have come in very handy. By having a simple system in place, I could have earned double back on my purchases for the class-action suit. I’d say that’s worth the extra 30 seconds to file away receipts at the end of each week.

Plus, it would take care of all the times my wife wants to return something after I’ve tossed the receipt. So this simple fix could save us a lot of money — and save me a lot of headache.

What kind of receipts do you keep? How long do you keep them? Is there a better system for keeping receipts?

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{ read the comments below or add one }

  • Adrienne Benton says:

    Although, I like the accordion idea. I recommend that my clients utilize either NEAT or Quickbooks. I am a firm believer of the paperless system.

  • Dot says:

    i read about a handy 12 month filing system somewhere: an old wine bottle carton, and each spot for a bottle holds a months worth of receipts. after that, my system falls apart since i just stuff them in. i also have a problem w/ thermal paper fading so you can’t read it well after a while

    • Travis @Debtchronicles says:

      That’s an interesting file system, Dot…but I can see where there would be a problem with just shoving the papers into a vertical hole. Although, I guess it wouldn’t be that much different than putting them all in a folder. 🙂

  • AJ says:

    I throw grocery, gas and other small purchases right away if cash or after I reconcile the credit card purchases and pay. Reoccurring bills are tossed once the new bill shows payment. Last bills are kept with tax records.

    Major purchases and insurance proof is keep with the tax year. All credit card statements, investments, and retirement finances are also stored with taxes. I know the IRS has a statue of limitations but I still keep tax records forever. When in doubt, save it.

    While we’re on the subject, some folders are kept outside of tax records. These included real estate transactions, animal and vehicle care records. I keep real estate papers forever but most animal and vehicle care records get tossed the year after animal or vehicle is gone except for a few sentimental items. Manuals are keep till the item is no longer owned unless there is a possible issue on the horizon.

    So far space is not a major issue, but if and when it does, I’ll probably toss some of the 10 or more year old tax records.

    Now, if I could afford a personal assistant to sort all the freaking papers, I’d be a happy camper. 🙂 -AJ

  • Mrs. Frugalwoods says:

    I keep grocery receipts all together in one envelope (cleverly labeled “grocery receipts”) and all other normal receipts in another envelope (with the witty label of “receipts”). For major purchase receipts (like computers), I keep the receipts filed in our filing cabinet. But, I don’t save them for 5-7 years… hmmm, maybe I need to start your accordion file system! We actually don’t have that many receipts since so much of our stuff was bought either from Craigslist, at garage sales, or at thrift stores.

    • Travis @Debtchronicles says:

      I Love your witty receipt labels, Mrs. Frugalwoods. LOL. yeah, I’m not exactly sure what the right timeframe would be. But then again, I wouldn’t have ever imagined that I would need a receipt from GNC 2 years later….. Thanks for reading!

  • UpwardsofTwenty says:

    I like the accordion folder idea. Especially since i fianlly have an attic i can store stuff in. I am going to by some folders this weekend. JB

    • Travis @Debtchronicles says:

      I’m glad you like the idea, UpwardsOfTwenty – it’s unbelievable how many receipts you can fit in an according folder! Thanks for your comment!

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