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A little eye-opener about gift cards - MegaZone's Safety Valve
The Ramblings of a Damaged Mind
zonereyrie
zonereyrie
A little eye-opener about gift cards
Lots of people give gift cards during the holidays. I give them and have been given them. I make sure to use them before they expire, if they do. Not everyone does.
Gift Cards A Bonanza For Issuers
Tower Group

Nov 22 2006 : U.S gift card sales will exceed USD80 billion in 2006, representing a 20 percent increase on 2005 sales, according to research by TowerGroup.But issuers will rake in nearly USD8billion as a result of unredeemed or expired value and from lost gift cards, says the Needham, Massachusetts-based consultancy.
Consumers lose much more from the unused value on their gift cards than they do from the combined value of debit and credit card fraud, TowerGroup says. Credit and debit card fraud totals USD3.5 billion in the U.S. annually, it says. In the quarter ending May 2, 2005 U.S. retailer Home Depot recognized a profit of USD43million from accrued, unused gift card balances, TowerGroup points out.

The market for gift cards is currently dominated by retailers, which will issue USD29 billion worth of gift cards in 2006, TowerGroup says. However, it is bank-issued gift cards, worth an estimated USD23 billion in 2006, that will see the greatest growth, it predicts. These "universal" gift cards can be used at any location that accepts bank cards.

Restaurants will have issued USD18 billion worth of cards in 2006, while other business sectors such as gas stations and service providers will have issued USD12 billion worth of gift cards in 2006, estimates Tower Group.

Merchants LOVE it when people don't redeem the cards. That's free money to them. $8 BILLION in free money.

Use those cards folks. ;-)

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Comments
pdelahanty From: pdelahanty Date: November 28th, 2006 03:37 am (UTC) (Direct Link)
Gift cards can't expire or lose value in Massachusetts. It's the law.
lizzielizzie From: lizzielizzie Date: November 28th, 2006 04:24 am (UTC) (Direct Link)
That is incorrect. In MA, gift certificates cannot expire or lose value for 7 years after purchase. If no expiration date is listed on the card or certificate, then it never expires.

Scroll to the bottmo to see the Gift Certificate Law: http://www.ago.state.ma.us/sp.cfm?pageid=1174
rhysara From: rhysara Date: November 28th, 2006 08:14 pm (UTC) (Direct Link)
iN, NH they are good forever! No matter what (well as long as the store still exists). This means that you can take unused cards and certificates from other states and if the store is in NH, redeam them there. It's great!
tarzxf From: tarzxf Date: November 28th, 2006 06:31 am (UTC) (Direct Link)
Ditto for CA.
chiieddy From: chiieddy Date: November 28th, 2006 12:22 pm (UTC) (Direct Link)
While gift cards can not expire (if no date of expiration is on the card, and they must be good 7 years), Reilly (the AG) has been having kittens over the Visa Gift Cards which charge a monthly fee if unused. This is why I would never give someone one of these cards as a gift. The gift decreases over time.
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