Yesterday, Brian White blogged about unused gift cards. Millions of people receive gift cards during the holidays, and many of these cards end up sitting in purses, pockets and desk drawers, unspent. This represents an enormous profit for retailers, who keep the payments for the cards without having to part with any merchandise. What an easy way to make money!
According to a recent AP report, Best Buy (NYSE:BBY) claimed $43 million in profit from gift cards sold but not used in two years or more. Limited Brands (NYSE:LTD), the owner of Victoria's Secret, claimed $30 million.
Gift cards are very popular. The National Retail Federation estimates that retailers will sell over $25 billion in cards this year. Somewhere between 5 and 25 percent of the cards will not be used. Interestingly, rates of use vary according to the kind of store the gift card is from. Cards for basics, such as food, get used quickly and in full. Less essential needs such as entertainment have higher rates of disuse.
I hate the idea of just giving money to retailers -- although I know there are a few gift cards in my desk drawer. So let's all make a vow to use those gift cards that come in this year. Make the stores earn their money!
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Reader Comments (Page 1 of 1)
1-07-2007 @ 10:07AM
quannah rooney said...
I think there is a lot to do with those dusty gift cards. have you a spouse or a sister or a brother maybe even a parent or two? spread the joy and make those companies work for their money. Quannah
1-08-2007 @ 1:36PM
quannah rooney said...
here is an idea for using up all those dusty gift caards. do you have, perchance, a spoouse, a sister or brother, or even a parent or two? i so, share the wealth with them and let those companies work for their money Quannah
1-12-2007 @ 9:04AM
Joe said...
Here's solution for this problem. Recommend PlatsicAvenue.com to everyone who has unused and unwanted gift cards. It's a great new classifieds service for trading them.
2-18-2007 @ 7:47PM
Mongi said...
Hey I use gift certificates from the Federal Reserve. They're redeemable virtually anywhere.