Gift Card Resources

How do companies and stores make money off of gift cards?

Take I-tunes gift cards and safeway for example. You buy the card for $15 at Safeway and you get $15 credit on I-tunes. Aren't there shipping and manufacturing costs. How much does Safeway pay for the cards? How much does I-tunes pay?

Public Comments

1. when you buy the card it doesn't really cost i tunes 15 dollars so they can afford to pay safeway a commission
2. money for a card they sell it hold all that money and make interest on it til its used then make money off of the products its sells to the public
3. It doesn't cost much to produce the cards, and sometimes people lose the gift card (so they never get anything other than the card) also, if you can get people to try your product you can get them to come back. Besides this gift cards tap into the ever-growing spending power of teens that are underage for a credit card.
4. Safeway likely pays iTunes about $12 when it sells and activates the card. The unactivated cards cost very little to make and ship. In many cases the supplier gives the cards to the store and gets a cut of the $12 from iTunes when the card is activated. iTunes hopes you'll take a long time to redeem the card.