Starbucks Gift Cards Are Making The Brand Billions, But Many Never Get Used
For present-giving holidays throughout the year, gift cards have always been a good way to surprise your loved ones without having to worry that the gift will be well-received, or even liked at all. According to Civic Science, 51% of gift receivers surveyed prefer gift cards to traditional gifts, but on the other hand, 58% of gift givers prefer to buy something physical rather than a gift card. And even with a slight majority preferring gift cards over other types of presents, 28% of people say they have a few sitting at home unspent, while 10% reveal they actually have many.
The Seattle-based coffee shop Starbucks anticipated selling $3 billion in gift cards during the 2021 holiday season (via Restaurant Business). In the year prior, $164.5 million of gift card sales were seen as "breakage," meaning the amounts went unused and were considered profit. According to Restaurant Business, gift cards help propel business profits in a variety of ways; for one, many patrons go at least slightly over the amount the card was marked for, creating income where it wouldn't be if the gift card had never been sold, and secondly, they act as an interest-free loan until they are, if ever, cashed in. So, why is it that so many of these Starbucks gift cards aren't being cashed in for delicious coffee?
Many people wait too long to use giftcards
You can give a man a gift card, but you can't lead him to a Starbucks. By 2026, the gift card market is expected to hit $1.4 trillion, but according to CreditCards.com, the cohesive amount of unused gift cards in America total a mind-blowing $21 billion. Of the people who lose out on their gift card money, 29% say they waited too long and the card expired, and a quarter of people say they've misplaced one at some point. In these situations, the only person who loses is the recipient, as the company has already been paid in full. This is how Starbucks has racked up significant money without even having to try.
According to the CreditCards.com survey, the average person has about $175 in unused gift cards lying around, which is up a bit from $116 in 2021. So as you begin to look back on what a great holiday season you had this year, be sure to check your wallets to make sure you aren't forgetting anything.