You probably have one in your wallet right now, but do you know anything about it? These days gift cards are so commonly used that it’s easy to forget that less than 20 years ago they didn’t exist. The invention of the gift card has given rise to a revolution that has swept across the world, creating new and easier ways for people to give gifts and buy merchandise and services. Here’s a list of 6 things you probably didn’t know about the product that has changed the way we all shop.
1. Gift cards were first created by SSI Technologies in 1995 to be sold by Blockbuster, which became the first merchant to sell gift cards in their stores. Today, virtually every major merchant in the U.S. now offers gift cards, and SSI Technologies remains a major producer of plastic cards of all kinds.
2. In a January 2007 National Retail Federation survey, 79.7% of consumers reported that they are planning to buy at least one gift card during the following holiday season.
3. There are two major kinds of gift cards: open loop and closed loop. Open loop cards are cards that are accepted in a wide variety of locations, such as cards issued by Mastercard American Express, and Visa. Closed loop gift cards are cards that are issued by a specific merchant and can only be used in those merchants’ stores. Cardpool allows you to buy gift cards and sell gift cards that are closed loop gift cards.
4. According to the research firm TowerGroup, there are $41 billion in gift cards that haven’t been used since 2005. The same firm also estimated $8 billion in unredeemed gift card value in 2007 alone. Thanks to companies like Cardpool, that number is falling, accumulating to about $2 billion in 2011.
5. In 2009, President Obama signed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, targeting both the credit card and gift card industries. On the gift card side, the Act prohibited merchants from charging fees on a gift card unless the card has been inactive for at least 12 months. The Act also prohibited the sale of cards that expire less than five years from the issuing date or from the date that funds were last added to the card.
6. According to the National Retail Federation, gift cards were the most requested gift for the holidays in 2007, 2008, and 2009. In a 2008 NRF Holiday Consumer Intentions and Actions Survey, it was reported that 54.9% of consumers wanted to receive a gift card during the holiday season.