People's opinions differ when it comes to giving gift cards. Some will say it provides the recipient with more choices, while others will argue that it takes all of the intimacy out of gift giving. Are these little plastic cards really the way to go? Take our quiz to test your knowledge of the multi-million dollar gift card industry.
Which of these is considered a major advantage of giving gift cards?
Gift cards cost less than the gift.
Gift cards are easier to carry.
Gift cards provide the recipient with more options.
What percentage of Americans consider gift cards to be an inconsiderate gift?
In which year did the gift card craze begin?
What percentage of Americans have reported wanting to receive a gift card?
How much money do Americans spend per year on gift cards?
nearly $1 billion
nearly $10 billion
nearly $100 billion
Which of these best defines a target market?
A target market is the demographic from which the seller is likely to achieve the greatest number of sales.
The individuals who most often purchase gift cards are known as the target market.
Target market refers to a chain of retail stores.
What are the two basic categories of gift cards?
open loop and closed loop
prime and sub-prime
holiday season and standard
Open loop gift cards are under the oversight of which level of government?
How would you describe a dormancy fee?
A dormancy fee is a 10 percent kick back to the card manufacturer.
A dormancy fee is a reduction in the value of the card the longer the card isn't used.
A dormancy fee is federal tax levied against gift card purchases.
How long after receiving a gift card should you use it.
within a week
within a month
within a year
What portion of Americans use their gift cards within the first month?
How much more than the value of the gift card do shoppers usually spend?
15 to 40 cents on the dollar
30 to 60 cents on the dollar
50 to 75 cents on the dollar
Which of these best defines breakage costs?
Breakage refers to cards rendered unusable because the magnetic strip has been erased.
Breakage refers to the profits a company makes from the sale of unclaimed gift cards.
Breakage is a tax on all profits stemming from the sale of gift cards.
What percentage of gift cards go unredeemed?
3 to 5 percent
8 to 10 percent
12 to 18 percent
What is an escheat law?
Escheat laws protect the consumer against companies who try to cheat them with fake gift cards.
Escheat laws allow states to collect taxes from the profits a company makes when gifts cards are not redeemed.
Escheat laws allow the company to impose hidden fees without informing the consumer.