Not all the value on gift cards are redeemed - ever wonder what happens to the money that’s left over?
It’s standard for gift cards to ‘expire’ 12 months from the date they are sold. This is actually done to encourage the gift recipient to spend the money on the card, it adds a sense of urgency. In fact the vast majority of gift cards are actually spent in the first 2 months as you would expect.
So after 12 months (and we have all done it!), I find a gift card in my wallet that has expired and I throw it away with a shrug of my shoulders - after all, it wasn’t my money in the first place. I have had plenty of time to spend the gift - it’s just one of those things.
Well the unredeemed money actually belongs to the programme operator.
On average the level of unredeemed value sits at around 15%. So if you sell £500k of gift cards in year 1, there will be approximately £75k of unredeemed funds left over in year 2.
This of course isn’t the reason to launch a local gift card programme. The reason to do that is to lock money into the local economy, encourage people to spend more (on avg. 40% more than the value given) and visit new businesses (15% of redemptions are people visiting new businesses).
In order to sell the gift card in the first place you need to shout loudly about what a great gift it is and highlight the fantastic range of shops, cafes, restaurants, salons and venues etc it can be used in.
But you can deliver all this value and generate revenue at the same time to reinvest in other positive initiatives. This combination of delivering value for individual businesses, the programme operator and the town/city is the reason that we are helping to launch town/city gift card programmes across the country.
For more information about town/city gift card programmes - please contact Colin Munro, [email protected], 01738 444 376