The market for gift cards in the United States is growing steadily. In year 2018 alone, Americans have spend whopping $160 billion on gift cards. Why are gift cards every retailer’s wet dream? The shop receives real money upfront, and after time, many gift cards are forgotten, lost, destroyed (remember that one time, when you washed your pants with a gift card in back pocket?).
Unredeemed gift cards statistics
At some point reports claimed that 8 to 10 percent of all gift cards went unredeemed. By 2010 the redemption rate was at 93 percent. In 2015 only 0.75% of gift cards went unredeemed, and according to reports by TowerGroup, the rate steadied itself at this level. This still means that between 2010 and 2018 gift cards worth almost $27 billion went unredeemed.
Another interesting thing is, after a certain period of time, retailers can report the profits from unredeemed gift cards under “Breakage income”. From these reports you can find out, that Starbucks reported $105 million of breakage income, Home Depot $34 million, and Dunkin Donuts $22 million.
Top image: Gift cards at a shop (Photo credit: tales of a wandering youkai / CC BY 2.0)