Redemption Rate
Not all gift cards are redeemed. The card may be lost; there may be time decay (expiration and fees) or complex rules of redemption; the recipient may not be interested in the store that accepts the card or be under the false assumption that not using it will save money for the giver. It has been estimated that perhaps 10% of cards are not redeemed, amounting to a gain for retailers of about $8 billion in the US in 2006.
In 2012, over $100 Billion in gift cards will be purchased in the US, where over 20% of those gift cards will go unredeemed or unused. This has amassed a large opportunity in the secondary market, similar to the secondary ticket market in the early 2000's. Companies such as CouponTrade have created a business in the secondary gift card market that allow consumers to sell their unused gift cards or buy discounted gift cards to their favorite brands. This has helped their users recoup their share of some $55 million per day that goes unredeemed in the US every year, by turning their unused gift cards into cash.
Read more about this topic: Gift Card
Famous quotes containing the words redemption and/or rate:
“Industrial societies turn their citizens into image-junkies; it is the most irresistible form of mental pollution. Poignant longings for beauty, for an end to probing below the surface, for a redemption and celebration of the body of the world. Ultimately, having an experience becomes identical with taking a photograph of it.”
—Susan Sontag (b. 1933)
“Writing a book I have found to be like building a house. A man forms a plan, and collects materials. He thinks he has enough to raise a large and stately edifice; but after he has arranged, compacted and polished, his work turns out to be a very small performance. The authour however like the builder, knows how much labour his work has cost him; and therefore estimates it at a higher rate than other people think it deserves,”
—James Boswell (1740–1795)