New Functionality - ExpiryThursday, 19 May 2011 Expired Gift Cards: Whose money is it?Did you see a significant uplift in the volume/value of gift card sales last Christmas? Are there still a large number of those cards unredeemed? Can you, the retailer, claim this unspent money? Your expiry date “policy”, as the card issuing retailer, determines whether this unredeemed cash can be booked onto your bottom line (if you expire the cards), or not (if you don’t expire cards). The most common expiry date policies are:
The debate has taken an interesting twist in the US recently, where state governments can repossess unclaimed property such as dormant bank accounts and uncashed cheques. Now, due to the popularity of gift cards, unredeemed gift card balances are also falling under these escheat laws. In fact some states run a 60/40 escheat model where 60% of the unredeemed balances go to the state and the remaining 40% stays with the retailer.
“Breakage” (the unredeemed balances on prepaid cards), which typically runs at between 8%-12% of card load value, is seen by some retailers as one of the main business case justifications for implementing a prepaid card program. So irrespective of which expiry date “policy” you wish to implement you need to talk to Card Commerce as we have functionality that caters for all.
What’s your view on redeeming this breakage?
PG
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