Gift Cards

If you have noticed a lot of gift cards out there, for sale at grocery stores and everywhere else, here is all you have to know: 20% of those cards are never negotiated. That is to say, if a company sells ten million dollars worth of gift cards, only 8 million will ever by redeemed. The other 2 million is lost or forgotten by the recipient. That same 2 million is pure profit to the company.

You can buy even visa cards and load them up with cash, a favorite with money launderers, a loophole that will not be closed because they are an especially likely group not to redeem the cards (store them up, die with them hidden).

A neighbor of mine deployed the Starbuck's Gift Card and of course it was an instant money maker. I always figured it would be only a matter of time before these things were discounted 5%, 10% 15% over time in an act of competitiveness. Thus I was surprised to see at Costco gift cards for sale, $100 worth for $80. Gap, Restaurants, hotels, many goods and services companies had their cards their, all five $20 cards for $80, in a huge plastic clear package. I guess the idea is these are opened and given as gifts individually.

With people like Black Angus going under, would Costco refund the $80 if the company behind the gift card goes bankrupt?

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