Gift Cards – A Gift to Restaurants?

If you have an unused gift card from your birthday last year, then you're not alone. Consumer Reports surveys have found a quarter of people who receive gift cards don't use them within a ten month period.

This can be very profitable for a restaurant that sells gift cards. The restaurant gets the money up front and a large percentage recipients never use the balance on the card. Lots of people either lose the gift card, forget about it, or just never redeem it. In fact, it's so common that the industry has a term for it – breakage.  Gift cards can be a great deal for a restaurant, but there are some pitfalls.

Gift card counterfeiting and gift card fraud are on the rise, which may create insurance risks.