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i really like the HELP of Ojai suggestion. Or you can trade them with other people -
cardavenue.com
certificateswap.com
craigslist.org

Allow me to complicate the issue a bit.
Large retail companies (I'm talking big here- Costco, Best Buy, etc.) are not allowed to claim gift card sales as actual sales until the card is actually redeemed.
In the world of corporate retail finance, the "health" of retail stores is primarily calculated by sales comparisons- quarter over quarter, year over year, xmas reason over xmas season, etc.
Hence it is advantageous for the company to have you spend the gift card so they can add it to their gross sales. They are not rewarded for accruing the extra unspent money.
Here is a tangential example:
During the difficult period for Apple Computer, mid late 90s to early 2000s, Apple sales deteriorated badly. One of the things that kept them afloat was the enormous amount of cash they had "in the bank"- billions and billions that they had harvested from their early (mid 80s- mid 90s) run. However they were not rewarded for their unspent cash. Their stock price was decimated because of declining sales.
For the past 5 or so years they have had skyrocketing sales AND a ton of cash in reserve.
Now they are rewarded.
I know this isn't directly related to the topic, but not a bad lesson in corporate finance, huh?

Gift cards - what a deal!

Let's see. Between 19-27% are never redeemed.

Plus, the retailer gets the cash up front, and gets to reinvest it, collect interest, etc.

All told, sounds like a retailer could offer a 35% or greater discount on purchases made with a gift card, and come out even or ahead.

Or, said another way, buy a big-box retailer's gift cards, and you've made a "gift" of 35%+ of the purchase price directly to your big-box.

Isn't that lovely?

I bet your giftee would be happier if you just gave cash. You could even add 20% to the amount, and make your giftee happier while "saving" on the total gift giveaway.

Now, how about gift cards issued by our local retailers? That sounds like something to support. They I am sure could use the extra 35%.

Son Anonimos, all very interesting and certainly stock and projections are crucial to a business's bottom line, but over $9 billion in unspent gift cards certainly give them plenty of cash in their pockets, whether or not they get to add it to their P&Ls or earnings statements. In fact, do they get to call it Loss if the inventory stays on the shelf even if they have the cash in the bank?

Heather-

you get the dilemma.

they got the cash but it doesn't "help" them

"cetch-22"

SA: they got the cash but it doesn't "help" them?

I'm intrigued.

Can you show us an example of how these gift cards are actually reported by a real big-box retailer? They must show up on the balance sheet, cash flow and income statements somehow.

Anon 02:42 PM

I'm using "help" only in the sense that they can't report it as gross sales, which is a (perhaps "key") component in determining stock price.
I mention this because I am an addicted stock trader and this phenomenon is often cited in retail stocks.

I found this citation: http://www.irs.gov/businesses/article/0,,id=170842,00.html

and I will quote a relevant passage:
"The sale of a gift card, however, is not immediately recognized as income for financial reporting purposes. Similarly, under certain circumstances, the sale of a gift card may be deferred from immediate income recognition for tax reporting purposes."

You can keep reading from the link if you want to understand it more and most likely better than I do in terms of how it is handled in regard to accounting.

(consult your licensed professional)

It's a little technical for me, and I am short of time.

Do you know if they can spend the cash from the sale of the GC? If so, while I see that they can't report the earnings, it still looks like a pretty good deal to me. Cash in the bank, interest earned, and no need to deliver the merchandise.

You're missing the point. We don't have to support big boxes period, especially at Christmas. The system is totally, morally, irretrievably corrupt and the sooner it crashes the better. If the manger scene teaches anything, it is that money and gift cards do not bring peace. And there will not be a basket passed after that peace of a sermon. Peace.

Dennis is BACK with a righteously outraged vengeance!
Welcome home, brother.

welcome home, dennis!

Heather-

I'm sure you and I are the only ones interested in this topic.
I don't have the answer to your last question.