Although the history of the gift card is relatively short, it is certainly busy and intense. In just over 20 years, the gift card went from nothing to a huge industry that sees over $100 billion of sales annually, in the United States alone. Although American Express possibly were first to use the concept of a gift card in the early 1990s, the idea didn’t really catch on until Blockbuster used them in 1994. Once the initial blockbuster gift cards had caught on, there was no stopping how fast the gift card business would take off.
By as soon as 1998, there was $1 billion worth of gift cards being bought throughout the United States. After that though, the gift card business really learned how to fly and in 1999 a staggering $12 billion worth of gift cards were bought. Although analysts knew that gift cards would become even more popular, they greatly underestimated how popular they would become. The analysts had said that by 2004 gift card sales would reach $17 billion however, in 2000, just one year later the cost of the number of gift cards sold topped $25 billion. Of course by this time all major chain stores, large shops and other retailers were all offering gift cards to be bought and they were starting to account for 5% of all holiday shopping.
Although by this time, criminal activities had started to be associated with gift cards, it didn’t seem to discourage their popularity by either consumers or retailers. The retailers though, had an extra reason to like them as, as much as 10% – 20% of the value on gift cards was not being redeemed, mainly due to the short expiration date on the cards. This prompted governments around the world to put in legislator that prevented retailers placing an expiry date on their gift cards which was less than 5 years after their sale and those gift cards which could have extra credit added to them later were not allowed to expire until 5 years after any credit had been added.
Still, even today though, gift cards are not being fully used and so as much as $96 million will go unused this year. To prevent you from losing any of the money on your gift cards, you can discover gift card balance amounts by going online and looking up whichever gift cards you may have, thereby ensuring that at least you do not present the retailers with their own gift.
The history of gift cards has been plagued with instances of fraud and money laundering. An estimated 13% of all fraud cases are said to be related to gift cards and the main abusers, responsible in 67% of the instances are, the employees of those retail outlets that sell gift cards. It is also believed that a whole 5% of all money laundering incidents throughout the world, are somehow related to the buying, selling or use of gift cards but, they still seem to be loved by consumers and retailers alike.