$2 billion in gift card value to go unredeemed this year
Over the holidays, I was fortunate to receive a $25 gift card to Chapters.
Is that more than it costs on Amazon, even with shipping? Of course it is, but what was I supposed to do? It was a gift card, and it had to be used.
Perhaps, though, my use-even-if-it’s-not-the-best-deal approach to gift cards puts me in sparse company.
According to a new estimate, $2 billion in gift cards will go unredeemed during the calendar year 2012, gone to waste in desk drawers and, pending expiration dates, lost forever.
Remarkably, such a whopping number is actually down from years past.
By the figures provided by Brian Riley, a senior research director at TowerGroup, $41 billion in gift card value has gone unredeemed since 2005. That’s an average of more than $6.8 billion each year.
There’s one major reason the unredeemed funds total has gone down recently – since 2009, new regulation eliminated the expiration date from many gift cards – but still, $2 billion wasted? In free money?
Why consumers neglect their gift card cash varies in reason, of course, though since expiration dates have largely been removed from the equation, disinterest seems to be the major culprit. Shoppers don’t use gift cards either because they’ve forgotten about the available funds, or more likely they don’t desire to shop at the retailer the gift card is from.
Until giving cash removes itself from the taboo pile come holiday time, gift cards will certainly persist as popular present pastime, though consumers ought to know what they’re getting into.
There’s a reason stores love pimping gift cards around the holidays. Even with sites like the Dragons’ Den -promoted CardSwap.ca, absentee recipients ensure they’re still massive profit generators.
By Jason Buckland, MSN Money