Billions of Dollars in Gift Cards Go Unused

Before you buy a gift card this season, consider this: $5 billion will never be spent this year according to a financial services group.

By: WSPA Staff | News Channel 7
Published: December 16, 2009

From “Wrist-Bands” to "Techno Trimmings" to Wireless Wonderlands," Nowadays there's endless packaging to meet the growing gift card demand from shoppers like Danny Mize.

"It's simple easy to give, you can't come up with all those ideas, you know, just give a gift card and let them come get what they want," said Wize.

But all too often they don't. Some only spend a portion and throw it out. Some lose the card, some put it in a draw, and forget about it. Even Wize just remembered today he's had one in his wallet since July...

"You don't think about it," said Mize

In the industry the term is called breakage and here's what it means. If you give a friend or a family member a gift card there's a pretty good chance you're going to be giving at least a little money to the retailer or the bank. In fact, Best Buy admits in the last fiscal year they kept $38 million dollars in breakage

And it's not just Best Buy. This year $5 billion dollars in gift cards will go unspent according to TowerGroup a financial services consulting firm.

"That's a lot of money, that's a lot of money," said Wize.

Now, you may have no control over whether the recipient of your gift card follows through, but you can save by getting gift cards at a discount.

Sites like GiftCard.com and GiftCardGranny.com that allow you to buy the cards for less.
Today we add DFWbid.com to the mix. It's an auction site that lets you score gift cards to brandname stores like Target and Macy's for less than half the face value.
But as with any auction site, a word of warning:

“Make sure that if you are getting something from an online company or something like that, that they are a legitimate company that they definitely will follow-up with the card and you'll be protected with the money you put on that card," said Wade Dixon with Best Buy.

Effie Coward says she'll be buying 8 gift cards this season. And though she's well aware many go unspent -- she has a back up system to prevent that.

"I follow up on my giftcards. I want to know what they got," said Coward.

"It's the thought that counts more than what goes on afterwards," said Mize.

Danny says it's up to folks getting the cards to do with it what they want.