Question of the Day: How much (in $s) do consumers have in unused gift cards from Wal-Mart and Starbucks?

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Feb 23, 2020
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Behavioral Finance, Question of the Day

Answer: $3.5 billion

Questions:

  • Why do you think that the balances on unused gift cards is in the billions?
  • What strategies can a consumer use to make sure that they don't lose track of their gift cards?
  • Would knowing that many people don’t use gift cards affect your gift-giving habits (i.e., would you decide not to give gift cards anymore since you’d be afraid it would never be used?)

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (Marketplace):

Vast sums of money are tied up in unused gift cards and digital wallets. Paypal had customer accounts totaling $22.5 billion as of a few months ago, and together Walmart and Starbucks held about $3.5 billion in deferred gift card revenue...Most of those cards are redeemed within eight weeks, according to marketing professor Dan Horne at Providence College. “The odds of a card being used after three or four years approaches zero,” he said.

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Be sure to check out another NGPF resource on this topic: FinCap Friday: Stacking Unused Gift Cards

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Be sure to check out the new documentary, The Most Important Class You Never Had, which demonstrates the power of financial education as told through the eyes of 8 teachers in high school classrooms across the country.

 

 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.