Use Your Gift Cards ASAP
Next time you receive a gift card, don’t save it for a special occasion – and don’t throw it in your desk drawer or forget about it. Use your card as soon as possible, otherwise you are providing the company with an interest-free loan.
As financial blogger JP Koning explains:
Starbucks has approximately $ 1.6 billion in outstanding credit card obligations. This is the sum of all physical gift cards stored in customers’ wallets, as well as the digital value of electronic balances in the Starbucks mobile app. * This is ~ 6% of all the company’s liabilities.
This is an incredible number. The Value Saved Card Liability is the money you, a loyal Starbucks customer, use to buy coffee. You may not realize that these leftovers simultaneously serve as a loan to Starbucks. Starbucks does not pay interest on Starbucks App account balances or gift cards. You, the loyal customer, provide the company with debt free.
My guess is that a lot of people don’t care if their Starbucks gift card or app balance works like an interest-free loan – that’s what Starbucks (and similar retailers) are hoping for. If you put money into your Starbucks app and forget to spend it, or if someone gives you a Starbucks card and you never use it, it’s money that goes to Starbucks without having to give you an equivalent value product in return .
It’s the same with all the tiny leftovers on gift cards after you try to buy something that is less than the face value of the gift card, so you don’t have to pay out of pocket in cash. This is the money that you decide to return to the company; In other words, a forgiven loan.
And of course, sometimes it doesn’t make sense to spend every penny of a gift card if that means paying in cash at a store you rarely visit to buy a product you don’t really need or need. In this case, the best option might be to sell your gift card to someone else (as real creditors do with real debts).
In short: use your gift cards as soon as you receive them, just like you would use credit card rewards or airline miles once you earn them . (You do use credit card and air miles rewards as soon as you earn them, right?) Otherwise, you depend on an interest-free IOU with an expiration date – and this is the kind of loan you want to get. as soon as possible.