The most requested gift by far
Gift cards may get a bad rap for being impersonal, but they have been the most-requested holiday gift for ten years running. In 2016 over 60% of people surveyed by the National Retail Federation said they wanted a gift card this holiday season. So how many gift cards actually get bought? And how many go unused?
Over $970 million worth of gift card cash went unused in 2015 alone. Meanwhile, total gift card spending in 2015 clocked in at $130 billion, up 6% from the year before. Despite the billions of dollars that have gone unused it is still estimated that gift card sales will make another 9% jump this year.
Since 2005, it is estimated that there is $45.7 billion floating around in unused gift card balances. For cards that are lost or accidentally thrown away, that money may never be used.
Why this isn’t free money for companies
Sounds like free money for businesses, right? Wrong: it’s all in the accounting. When gift cards are sold they are counted as a liability until spent, and only when they are spent does that money count as revenue. That means there was 970 million dollars in liabilities for the U.S. businesses whose cards went unused last year.
Further, closed-loop gift cards (gift cards that can only be used at a single store or chain) are generally bought through card vendors. These vendors can charge for everything from setup for the merchant to stocking the card inventory. When you’re not using, they’re losing.
The state of gift cards in 2016
Despite all of the unused gift cards out there, 2016 is slated to bring on even more gift card purchases. It’s estimated that $140 billion will be spent on gift cards in U.S. in 2016 alone. To give you an idea of just how much money that is: the same amount could be used to buy the Chicago Cubs 140 times over (with their recent World Series win that might not be a bad idea). Of that $140 billion it’s projected that over $1 billion will go unspent, and that’s still enough to buy the Chicago Cubs once.
So what do you do with a drawer full of gift cards?
If you have gift cards collecting dust, that you don’t need to use or for a store you don’t prefer, consider selling them on a gift card exchange like Cardpool. You’re not limited to just selling your physical cards, either. With most exchanges you can even sell your e-cards to keep them from collecting digital dust and put a little extra cash in your pocket.
If you want to take advantage of discount gift cards, you can buy from an exchange. These exchanges sell gift cards at anywhere from a 3 to 35% discount. When the budget is more shoestring than sky-high, those extra savings can make a big difference.
A gift card exchange is a third-party business that helps connect people who want to buy and sell gift cards. Exchanges will buy gift cards from holders who aren’t interested in hanging onto them at a discount and sell at a price that’s less than the value on the card. This leads to money earned for the seller and money saved for the buyer.
Sources: Bain & Company, First Data, National Retail Federation, Tower Group, CEB