Jan 10, 2007

I always use my gift cards

Though I can't say the same about various gym memberships I've owned.
The financial-services research firm TowerGroup estimates that of the $80 billion spent on gift cards in 2006, roughly $8 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 2005 never used it.

Considering that two-thirds of all holiday shoppers in 2006 planned to give someone else a gift card, you most likely received one yourself in recent weeks. 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.

This is a national scandal. One of the few joys of January is taking advantage of post-holiday sales with gift cards. I fondly remember one year when I raked in a complete set of dishes and a fur-trimmed coat for free. Other gift card bonanzas: A Cuisinart and an eleven-piece set of pots and pans.

Via Alex Tabarrok.

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