-Only 73% of gift cards get redeemed in the first six months.
-3% of gift card value will never be redeemed. $300 billion is spent annually on gift cards, so that equals to about $9 billion that goes unused and unclaimed.
-When money goes unclaimed for a significant amount of time, companies are allowed to count a portion of it as “breakage income,” and may be treated as revenue. In 2024, Starbucks reported $200 million in breakage income each year.
-Because of this, federal law now mandates that gift cards must have an expiration date of at least 5 years from the date of purchase. And retailers are not allowed to start deducting inactivity fees until after 12 months of disuse.
-States like California and New York offer stricter and additional protection for consumers.
-Another negative for gift cards? Bankrupt companies such as Joann Fabrics, Forever 21 and Bed Bath & Beyond were allowed to refuse to honor gift cards.
-So what’s the solution? Cash! They point out the stigma, but say it’s worth it in the end and you can even include the cash in a card with a heartfelt message.
-Other solutions? Make an online wishlist. Some complain it takes the fun out of gift giving, but they point out, people would rather want what they want than to be surprised.
ONTD, what would you prefer?
An actual gift, even if it’s all wrong?
Gift Cards? Cash? Or all of the above?