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Bob Meyer

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Gift Card & Scrip "Breakage" Figures Are Staggering!

In the barter industry almost everyone is aware that the use of scrip or gift certificates has many uses, not the least of which is additional profits because not all scrip is used or redeemed.

The same is true for retailers who increasingly are promoting gift card usage. Not only is it an easy way for someone to give another a gift, but the recipient appreciates the gift card because it provides them with many buying options. And the retailer likes gift cards for two reasons. First, the recipient will spend more when using the card, and second, breakage or unused gift cards mean greater profits for the retailer.

According to the TowerGroup in Massachusetts, 12% of gift card value is never spent. That breakage will amount to about $5.7 BILLION this year! TowerGroup projects that sales of retailers’ gift cards will reach $47.5 billion this year, $50.8 billion in 2006, and top $57 billion in 2008.