At Least $10 Billion Gift Cards Go Unused Each Year! And Why Is a Gift Card the Most Profitable Items in a Retailer?

Nowadays, in addition to the frequently used payment methods such as cash, debit cards, credit cards, and Apple Pay, there is a very common method, which is the gift card payment. So here comes two questions, which are why do retailers issue a large number of gift cards and why are gift cards the most profitable items for card retailers?

1. What is a Gift Card Used for?

First of all, gift cards can be issued to employees as company benefits, then they can determine what to buy in freedom. It is both a bonus issued to its employees and also the great way to get a tax credit.

Secondly, in the process of use, gift cards are anonymous, basically untraceable, and have no password so that they cannot be tied to one person. Thus it provides conveniences for gift cards to become one of the best ways to give gifts and these conveniences allow the rapid development and more holders of gift cards.

2. How Do the Retailers Profit from the Gift Card you buy?

Gift cards already have such a huge market and a great number of holders, so what are the jaw-dropping ways to make money in this little gift card?

The first one is through taking a commission charge from you. For example, a gift card with a face value of $500 often only has its balance of $490 or $480 in it, and the commission charge which also can be called a deposit of $10 can be arbitrarily used by the retailer for investment or production. A card doesn't count, but how about it multiplied by 300 million, 400 million, or 500 million? Then it will be a handsome profit.

The second one is through getting the interest income from the balance of gift cards. During the period from when a gift card is issued to when it is used, the amount of the card is not stored in the retailer's finances until you redeem it, just like the commission charge mentioned above, which can be used by the card issuer to invest, and the corresponding awesome revenue belongs to him too.

The third one is through the way that you lose the cards or even you haven't used it. Since most gift cards are fixed-valued and have no identifying users, it is easy to get lost or not be used up. At least 10 billion US dollars gift cards have not been used worldwide every year for forgetting to use them, losing them, and insufficient balance, etc.,

The fourth is through make off with money. The three ways mentioned above are legal anyway, but the fourth one is not like that.

Therefore, compared to making money from you through selling goods to you, gift cards are the more profitable way of the retailers. And if you do not plan to use these gift cards, it is particularly important to stop the loss in time. Currently there are many websites for gift card redemption, such as Tbay, a global professional gift card trading site, where you can conveniently sell cards and withdraw cash quickly.

Except the reason that has been mentioned above, previously on Tbay blog, another 6 reasons why you should sell gift cards have also been referred to. If interested please click here.

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