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The Giftcard Economy

January 28, 2011

There is a good reason that Giftcards are known within the retail industry as a stored-value product: they store their value very well, and often permanently. The financial-services research firm TowerGroup estimates that of the $100 billion spent on gift cards in 2010, roughly $12 billion will never be redeemed — “a bigger impact on consumers,” Tower notes, “than the combined total of both debit and credit card fraud.” A survey by Marketing Workshop Inc. found that only 30 percent of recipients use a gift card within a month of receiving it, while Consumer Reports estimates that 19 percent of the people who received a gift card in 2010 never used it.

Considering that two-thirds of all holiday shoppers in 2010 planned to give someone else a gift card, you most likely received one yourself. Perhaps you are among the exceptional minority, and you have already spent it, or soon will. But the odds say that it has instead wound up in your sock drawer.

From Stephen J. Dubner and Steven D. Levitt’s book Freakonomics

In Money
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