Windfall profits

Gift cards may be a quick fix for the last-minute shopper. But unfair expiry dates mean they can be little more than a gift to the retailer.

Of 60 cards we looked at, more than half expired after just 12 months. The meanest gift card was Ticketek’s: it runs out after a measly six months.

When a card expires, the retailer keeps any remaining money. Of the 20 percent of gift card users who’ve been stuck with an expired card, more than half had more than $20 left on the card. Ten percent lost more than $60.

Retailers are coy about revealing how much they earn from unredeemed cards. But company accounts reveal gift card income is typically calculated on the assumption a percentage of shoppers will never spend all the money on the card.

Paper Plus, which has 12-month expiry dates on its gift cards, provides for a “non-redemption allowance” in its accounts.

Ticketmaster, which also has a 12-month expiry date, recognises income from gift cards based on the amount “the customer is reasonably assured not to redeem”.

Few retailers publish actual figures on the proportion of cards not used before they expire. Of those that do, non-redemption rates are between five and 10 percent. Across a multi-million-dollar industry, that adds up to a tidy sum.