Use It or Lose It

I read something in last Sunday's Times magazine that really surprised me:

The financial-services research firm TowerGroup estimates that of the $80 billion spent on gift cards in 2006, roughly $8 billion will never be redeemed — “a bigger impact on consumers,” Tower notes, “than the combined total of both debit- and credit-card fraud.” A survey by Marketing Workshop Inc. found that only 30 percent of recipients use a gift card within a month of receiving it, while Consumer Reports estimates that 19 percent of the people who received a gift card in 2005 never used it.

Never? Why not? Have you ever not used a gift card? Short of losing it, I can't imagine a reason for not using a gift card. I think it's fun to shop with a gift card and perhaps buy an item I wouldn't have normally bought on my own dime. The article goes on:

Best Buy, for instance, earned $16 million last year in gift-card “breakage,” which is the industry’s term for card value that was bought but never redeemed.

Amazing. So the moral is: Don't give a gift card to someone who might not use it. You're only helping to line shareholders' pockets.

Comments

[Mark]

Add to that $16M all that money spent above/under the card amount. If it's a store you don't usually go to, you're going to either spend a little over the card out of your wallet or spend a little under the card and never use what's left on it. Either way, the store wins.

[Camille]

I can't imagine not using a gift card. I actually just had a strange find. I was clearing out a closet yesterday and found a bag of cards from my wedding five years ago. In going through the cards and throwing some away, I found a wedding gift of a gift card! Although it is to Wal-mart, still it was like finding $25 in an old jacket pocket.

[Anne Glamore]

I read that, too. My only thought is that maybe they get lost and tossed out in the wrapping paper mess by careless gift receivers.

[Dawney]

Often, they are for small amounts that I have to add $ to in order to buy something. Thankfully, my family buys the ones at the places I REALLY frequent--Cracker Barrel and Walmart. Ha!

I mean, $20 or $25 at Bed, Bath, and Beyond or some other place just isn't going to buy me too much of anything I want or need.

[pam]

Yeah, I can imagine how people would forget to use a gift card. But it makes me really mad to see how much of a bonus retailers make on unused gift cards - for no work! I will find any I got over Xmas and redeem them ASAP. Hey, if I don't specifically need their wares, I can at least buy presents for other people!