gift card losses of $100 million

Gift Card losses up to $100 million

Bad economy hurts gift card credibility

The story has been told over and over again, but as the economy begins to pick up it is interesting to look back and see how gift cards were beat up. According to an artice in Forbes magazine, people in the US were left with up to $100 million in unuseable gift cards in 2008 and 2009.

Gift cards from Circuit City and many other companies that went bankrupt simply can not be redeemed. This put a dent in the credibility of the gift card market. It is estimated that branded gift cards will take up to a 15% hit in 2009 due to these losses. Poeple will flock to more reliable gift cards created by visa and mastercard.

The economy is on the mend but gift cards took a beating in this bad economy. There has been more use of ordinary gift cards for items such as gas and groceries, but the cards for shopping and fun have been beat up and will take a few years to return.