Where does all that unused money go if it’s not being spent by the consumer? Believe it or not, the merchant ends up benefiting from unused cards. More than $130 billion is spent per year with nearly $1 billion unused according to CEB TowerGroup. It also provided incentive opportunities for large companies to reward customers and employees. The introduction of Visa gift cards brought the ability for use anywhere Visa is accepted. While merchant gift cards Starbucks, Best Buy, Target, etc are popular, they can be somewhat limiting since they only allow redemption for that specific store. Soon after, the gift card industry took off. Although the well-known department store was first to market with gift cards, Blockbuster was first to display plastic gift cards in their store. Gift cards were first created by Neiman Marcus according to Smithsonian Magazine. It wasn’t long until a new product entered the market to combat the issue by the mid 1990s, gift cards were introduced. This type of fraudulent activity resulted in lost revenue for the retailers. But that wasn’t the only setback counterfeit gift certificates came into play with the invention of color copies. Time spent on issuing and redeeming paper certificates was tedious for employees. Gift certificates eventually became a problem for companies.
Due to the popularity of McDonald’s program, other restaurants, retailers and shops started offering gift certificates to consumers.Īll good things must come to an end. Gift certificates eventually became a household name in the 1970s with the launch of McDonald’s Christmas gift certificate program. These paper credits were hidden behind counters and only available to select consumers by the associates. But they weren’t well-known or accessible to all. Major department stores first created gift certificates in the 1930s. We’ve had gift cards for so long that sometimes we forget its predecessor…the gift certificate. But it’s amazing to see the transformation throughout the years from paper to plastic and beyond. Sure, I may be biased since I’m in the gifting space. The evolution of gift cards is fascinating to me.
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