What is the percentage of unused gift cards?

Holidays & Special Events

By Kristy Tolley

The Prevalence of Gift Cards

Gift cards have become a ubiquitous form of gift-giving in the United States. They offer convenience, flexibility, and the freedom to choose one’s own gift. From birthday presents to holiday gifts, gift cards are a popular option for many occasions. However, the prevalence of gift cards has also brought to light an unfortunate truth – a significant percentage of gift cards go unused.

The Rise of Gift Card Popularity

Gift cards have only been around for a few decades, but they have quickly become one of the most popular forms of gifts in the US. According to a survey by the National Retail Federation, gift cards have been the most popular holiday gift for the past 14 years. In 2020, Americans spent an estimated $160 billion on gift cards, a 10% increase from the previous year. The convenience of gift cards, coupled with their flexibility and ease of use, has made them a go-to option for many people.

Understanding Gift Card Usage Habits

Although gift cards are popular, it is important to understand how people use them. Some people use gift cards immediately, while others hold onto them for months or even years. Additionally, some gift card recipients never use them at all. Factors such as the type of gift card, the value of the card, and the recipient’s personal preferences all play a role in how gift cards are used.

The Unfortunate Truth: Unused Gift Cards

Despite their popularity, gift cards come with a downside – a significant number of them go unused. This means that the money spent on the gift card is essentially wasted. For the gift giver, it can be frustrating to see their gift go unused. For the gift card issuer, it means that they have already received payment for a product or service that may not be redeemed.

The Percentage of Unused Gift Cards in the US

According to a report by Mercator Advisory Group, approximately $3 billion worth of gift cards go unused every year in the United States. This amounts to around 6% of the total value of gift cards sold. While this may not seem like a large percentage, it is still a significant amount of money. Additionally, the percentage of unused gift cards can vary depending on the type of card and the time of year.

Factors Contributing to Unused Gift Cards

Several factors contribute to the percentage of unused gift cards, including expiration dates, fees, and restrictions. Some gift cards have expiration dates, which means that they can only be used within a certain amount of time. Others may have fees, such as activation fees or maintenance fees, which decrease the value of the card over time. Additionally, some gift cards may have restrictions on where they can be used, which can make them less appealing to some recipients.

The Impact of Unused Gift Cards on Retailers

Unused gift cards can have a significant impact on retailers. When a gift card goes unused, the retailer has already received payment for a product or service that may never be redeemed. This means that they have essentially made a profit without having to provide any goods or services. However, it can also mean that they have missed out on a potential sale.

The Environmental Cost of Unused Gift Cards

Unused gift cards also have an environmental impact. Many gift cards are made of plastic, which can take hundreds of years to decompose. Additionally, the production and shipping of gift cards contribute to greenhouse gas emissions. When gift cards go unused, they ultimately end up in landfills, adding to the growing problem of plastic waste.

Strategies to Reduce Unused Gift Cards

Several strategies can be implemented to reduce the percentage of unused gift cards. One option is to eliminate expiration dates and fees, which can make gift cards more appealing to recipients. Another strategy is to offer digital gift cards, which can be easily accessed and used on a mobile device. Additionally, retailers can offer promotions or discounts for using gift cards, which can incentivize recipients to use them.

The Role of Technology in Gift Card Management

Technology has played a significant role in gift card management. Digital gift cards, mobile apps, and online balance tracking have all made it easier for consumers to manage and use their gift cards. Retailers can also use technology to track gift card usage, identify trends, and adjust their gift card offerings accordingly.

As technology continues to evolve, so too will gift cards. One trend that is expected to grow in popularity is personalized gift cards, which can be customized with the recipient’s name or a personal message. Augmented reality and virtual reality are also expected to play a role in the future of gift cards, offering immersive experiences and interactive features.

Conclusion: Making the Most of Gift Cards

Gift cards are a convenient and flexible gift-giving option, but their high percentage of unused cards is a cause for concern. By understanding gift card usage habits and implementing strategies to reduce their waste, retailers and consumers can make the most of their gift cards. With the help of technology and innovative trends, gift cards will continue to evolve and offer new possibilities for gifting in the future.

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Kristy Tolley

Kristy Tolley, an accomplished editor at TravelAsker, boasts a rich background in travel content creation. Before TravelAsker, she led editorial efforts at Red Ventures Puerto Rico, shaping content for Platea English. Kristy's extensive two-decade career spans writing and editing travel topics, from destinations to road trips. Her passion for travel and storytelling inspire readers to embark on their own journeys.

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