5 mins read Gift Card Trading

Gift Card Breakage: Explained So Simply A 7-year Old Will Understand

We’ve all been there – you get a gift card, use most of it, but then that last little bit of balance just slips your mind until it’s too late. Such a bummer when that happens, right? Well, believe it or not, that little forgotten balance actually has a name: gift card breakage.

See, every year, billions of dollars in gift card money goes completely unspent because people just forget about those remaining balances. $3 billion, according to some estimates. It happens way more often than you’d think.

But here’s the thing – unless someone points it out, you may not even realize when gift card breakage happens to you.

Well, you don’t have to worry because I am here to explain gift card breakage in a way that’s easy to understand. By the end, you’ll know exactly what it is, why it happens so frequently, and most importantly – how you can avoid losing your hard-earned money to this often-overlooked issue.

What Is Gift Card Breakage?

Gift card breakage describes the amount of money that goes unspent on gift cards. The most common reason for this is that people forget their own gift cards and, as a result, lose them.

A good example is this: you give a friend or family member $50 in gift cards for their birthday, and they only spend $40 on the gift card. The unused remaining $10 is called “gift card breakage.”

Imagine having a ticket to an amusement park that allows you access to ten rides. You only get to board six of those rides, leaving the remaining four rides unboarded. The four rides you didn’t go on are similar to what breakage means

Gift card breakage

Breakage occurs because people spend only some of the money on their gift cards, but it doesn’t mean that you’re losing any money as a retailer. Many retailers make more money from breakage than they do from sales.

For Example:

1. You own a $100 Razer Gold gift card.
2. You use it to buy items worth $80
3. For some reason, you abandon or lose the gift card and forget to use the $20

If you never use the remaining $20, Gift Card breakage has occurred.

Why Do You Need To Avoid Gift Card Breakage?

People lose up to $3 billion worth of gift cards each year. This means many people get hold of gift cards they never need or never use up the balance of a gift card.

“Many companies issue gift cards because they know that a certain percentage of
the gift cards they sell will never be redeemed. Some gift cards will get lost, some will
get thrown away and some will just get forgotten. In every case, unredeemed gift
cards represent additional profit for the issuer” – FORBES.

With more modern shopping malls and e-commerce platforms emerging daily, the use of gift cards is becoming more widely accepted. Buyers and sellers support using gift cards because it is like a cheque to buy anything you want and a cash alternative.

This increased demand for the use of gift cards also increases the chances of gift card breakage.

The more widely accepted the use of gift cards is, the higher the chances that people will forget they own them or have any remaining funds in these gift cards.

People will lose money, and gift card companies and e-commerce stores will profit from this.

How Can You Avoid Gift Card Breakage?

Avoiding gift card breakage is where Cardtonic can be a lifesaver. Cardtonic’s user-friendly platform allows you to easily avoid breakage by trading in your unwanted or partially used gift cards for cash.

It’s simple – just send your gift cards that you know won’t be fully used to Cardtonic, and you’ll receive a fair-value payment in return.

Many companies offer gift cards as cashback alternatives and incentives; with the shortened attention span of everyone, it is best to use Cardtonic to trade in your gift card for cash.

Cardtonic helps you with gift card breakage because the chances of having a remaining balance are higher with a gift card that doesn’t allow you to purchase your interests.


E.g. If you have an Itunes gift card and no interest in using any music-related purchases, you can trade it on Cardtonic and access the cash equivalent.

Furthermore, different gift cards have different trading rates, so if you are lucky to have a gift card in high demand, you can trade it at a significantly higher rate and make even more money from it.

Frequently Asked Questions About Gift Card Breakage

1. How Does Cardtonic Help Users Avoid Gift Card Breakage?

Cardtonic provides an easy way to trade in unused or partially used gift cards for cash, allowing you to avoid letting any balance go to waste. Instead of forgetting about those last few dollars on a gift card, you can conveniently exchange it through Cardtonic and get the remaining value paid out.

2. How Can I Use My Unused Gift Card Before It Expires?

Set a reminder for yourself a few months before the expiration date. Make a plan to use up any remaining balance by treating yourself to something nice, stocking up on essentials, or gifting the card to someone who can use it. And if the expiration date is approaching soon, think about exchanging it for cash through Cardtonic instead of letting it expire unused.

3. Can Gift Card Breakage Be Prevented?

Yes, gift card breakage is absolutely preventable with a bit of organization and awareness. Make sure to record all gift card numbers and balances, set reminders, and routinely check for any unused funds. Being proactive about using up balances before expiration is key.

4. Can I Sell Or Exchange My Unused Gift Cards?

Yes, there are platforms like Cardtonic that allow you to trade in unused gift card balances for cash payouts. This can be a great way to avoid letting money go to waste on cards you may not use.

5. How Do Businesses Benefit From Gift Card Breakage?

Gift card breakage represents additional revenue for businesses since they’ve already received the cash value but don’t have to provide any product or service for the unused balance. While good for profits, breakage is an acknowledged drawback of gift cards for consumers.

6. What Should I Do If My Gift Card Is About To Expire?

Try to use up every last cent before the expiration date. Do some online shopping, pick up a few necessities, or even see if you can reload more money and use the balance that way. If expiration is imminent, look into trading it in through a reputable site like Cardtonic.


To avoid gift card breakage, sign up on Cardtonic and use the multiple communication channels that allow you to trade (website and app). You can also make money from referring its service to others and get cash rewards simply by carrying out gift card transactions on its platform.

Customer service is available 24/7 to handle all your feedback and enquiries, so you have nothing to worry about. If you have gift cards or have been a victim of gift card breakage, the time to act is now. Get started today.


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