Thursday, December 21, 2006

Unused Gift Cards Generate Millions for Retailers

I recently read an AP Report that outlined the windfall of profits retailers are realizing due to unused or expired gift cards.
Last winter, Best Buy Co. reported a $43 million gain in fiscal 2006 from cards that hadn't been used in two or more years. Limited Brands Inc. recorded $30 million in 2005 revenue because of unredeemed cards.

These figures are shocking. The report goes on to say, that roughly 6% of cards are unused. I know I contribute to the 6%, since I have had my fair share of gift cards that expired before they were used.

This brings up another question. When did we become so brainwashed into thinking that a gift card was a better gift than cold hard cash? For whatever reason, I always feel that buying a gift card is almost as good as a real gift and giving cash is a cop-out. After reading that report I am starting to rethink my logic. In the future I am going to revert back to the cash. And if someone says something about being unthoughtful for giving cash, I can reply, "This is the thoughtful gift, this way they will actually spend the gift. Or would you rather have me write a check directly to the store's bottom line?"

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