Why Stores LOVE Selling Gift Cards

Why do stores love selling gift cards? They get your cash before you buy anything, some of that money is never spent, and gift cards nudge us to spend more. Americans are sitting on about $27 billion of unused gift cards. Here's how the gift card business really works, and how to make sure yours gets spent. In this video you'll learn: • Why the store gets paid before you shop • How much Amazon, Walmart and Starbucks hold in unused gift cards • What "breakage" is, and how much it's worth • Why gift card money feels different, and how we overspend • Your rights: why US gift card money can't expire for at least five years • Why anyone who asks you to pay with gift cards is a scammer • Simple ways to use every gift card you get CHAPTERS 0:00 $27 billion unused 0:23 Sam's $50 gift card 0:33 Win #1: the store gets paid first 0:52 Billions in IOUs 1:18 Win #2: breakage 1:31 Win #3: we spend more 1:56 Is your card safe? 2:20 Gift card scams 2:38 Sam's $109 2:51 What helps 3:04 The verdict SOURCES • Bankrate/YouGov gift card survey (release Sept 23, 2024; fieldwork Aug 19-21, 2024; 2,373 US adults): 43% hold at least one unused gift card, average $244, about $27 billion in total. • Starbucks Form 10-K, fiscal 2025: card activations, reloads and Stars earned $15,245.8M (p.72); breakage revenue $222.4M ($200.4M + $22.0M, p.55); gift card money recorded as deferred revenue and recognized on redemption (p.55); net earnings $1,856.4M (p.31). • Amazon Form 10-K 2025, p.50: unredeemed gift cards $5.6 billion (Dec 31, 2025). Walmart Form 10-K fiscal 2026, p.66: deferred gift card revenue $2,941M (Jan 31, 2026); Walmart p.62 and Home Depot p.48 on recognizing gift card revenue at redemption. • First Data press release (Nov 28, 2018), prepaid consumer study of 2,000+ US consumers: average spend $59 above the gift card's value. • C. Helion and T. Gilovich, "Gift Cards and Mental Accounting", Journal of Behavioral Decision Making 27 (2014): 76% of gift card money vs 47% of cash spent