Retail Scores Big on Unused Gift Cards

$7.8B in cards unused annually; some states want cut of profit
By Kevin Spak,  Newser Staff
Posted Jan 5, 2008 8:20 PM CST
Gift cards trade cash for more restrictive, less-valuable cash at a 1-to-1 ratio, complains LifeHack's Scott Young.   (KRT Photos)
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(Newser) – Retailers are likely rubbing their hands with glee after shoppers snapped up $97 billion in gift cards this year, up from $83 billion in 2006. Why the excitement? The industry makes billions each year from “breakage," or gift card money that is never spent. Lost, discarded, or under-used cards amounted to $7.8 billion in “free money” last year, the New York Times reports.

Some state governments want a piece of that action: Maine argues that its unclaimed property laws entitle it to 60% of unused gift card funds. Retailers disagree, accusing the state of targeting them to balance its feeble budget. Meanwhile sites are offering those with unwanted gift cards the chance to trade them for other credit, simply sell them, or even use them to pay their bills.