Breakage from gift cards—the money loaded onto prepaid cards that is never redeemed by the recipient—may look like free income, but it’s not nearly as valuable as getting consumers to use those cards. More than 40% of consumers who redeem a gift card ultimately spend more than its original value, far outweighing the relatively small percentage of cards that are never redeemed.
Turning prepaid cards into a revenue driver, then, depends on building relationships with the people who receive them. That was the message that kicked off the 2026 Retail Gift Card Association Forum, in a presentation by Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, called “Beyond Breakage: From Revenue Driver to Strategic Asset Research.”
Hirschfield drew on Javelin’s proprietary research into the prepaid market, as well as interviews with 15 representatives from leading gift card programs around the country.
“Our respondents show that the amount of revenue they’re claiming as breakage is not going to move the needle in overall revenue,” Hirschfield said. “Our interviewees prefer redemption. The goals around breakage are noble, but more as a baseline data set, quantifying and tracking the areas where we should also start to pull similar levers on redemption.”
Making the ROI Case
Many gift card programs have struggled to demonstrate their return on investment to senior leadership. While 60% of the gift card organizations surveyed have data analytics teams, or at least some analytics support, a similar percentage said they struggle to educate their organizations about the value of those metrics. In fact, 31% said they cannot demonstrate the ROI of their programs.
Most are still looking for ways to automate data collection, connect disparate data sources, and centralize the internal knowledge.
“The starting line is the transactional data,” said Hirschfield. “Get it, master it, then move up the stairs.”
Javelin’s respondents were promised anonymity in exchange for their candor, but several were willing to share their responses. One data scientist at a national fast-food chain said his priority was strengthening the company’s data processes to create a single source of truth.
“Gift cards can have many reporting techniques,” he said, “so automating processes freed up the bandwidth to ask harder questions, explore new ideas, and continue walking down the path of the gift card value story.”
Making the case to senior management also requires confidence in the underlying data. Organizations need to be able to validate their numbers, return to them later, and know they remain accurate. While collecting data from vendors and issuers is often necessary, the underlying figures need to be transparent and consistent.
“You can deal with fragmented data,” said a member of a restaurant’s chain’s gift card team. “But fragmented decision-making does not work.”
Getting the Data to the Right People
The next step is making sure the right data reaches the right stakeholders. Insights team, for instance, can use surveys of gift card redeemers to better understand customer behavior, while franchisees can see the incremental gains generated by different promotions.
Panelists also discussed how they work with customer metrics and insights teams to connect gift transactions with individual customer identities. That makes it possible to track behavior more closely and quantify the value of a redeemed card beyond the initial transaction.
The findings reinforce the idea that redemptions can be considerably more valuable than breakage because they create opportunities for loyalty and additional spending.
“A $50 gift card isn’t a $50 spend,” noted one panelist. “It goes further than that.”
Looking Beyond Breakage
Breakage is relatively easy for organizations to model and is, in many ways, the other side of redemption. Measuring it remains important for understanding the gift card lifecycle and can provide a useful signal of both program and brand health. Higher-than-normal breakage rates, for example, could point to an underlying issue with the brand or the customer experience.
But redemption offers a much richer opportunity for gift card teams—it gives them a window into the customer’s broader journey with the brand.
Is the customer a newcomer to the store? If they have visited before, did their visit frequency increase? Did the gift card lead them to spend more than they otherwise would have?
One panelist said he persuaded his team to view gift cards as a marketing tool capable of bringing new customers into the store. Now that the team has demonstrated a strong, positive return from the program, its focus has shifted toward educating the broader organization and socializing those results.
The payoff could be a fundamental change in how the program is viewed internally.
“Sometime next year, we will move the program from less of a cost center to more of a profit center,” he said.
Additional Insights
The conference featured several other presentations focused on the evolving role of gift cards and the challenges facing the industry.
Jonathan Mancuso, Director of Sales, Retail Media and Gift Cards at Giant Eagle, and John Farrell, Regional Vice President of Sales at Blackhawk Network, explored “Digital Merchandising: How Gift Cards Win on Your Website/App and Social Channels.”
Despite the growing chatter around agentic shopping, their data showed that the biggest influence on online gift card purchases was clear product information—more than twice as important as information from a chatbot or interviews. For purchasers, meanwhile, the biggest concern was how easily the card could be redeemed.
Later, Bill O’Malley, Director of Risk Management at Blackhawk, led a panel discussion on “The XYZ’s of Fraud Mitigation: Don’t Be Left Behind!” Much of the discussion focused on identifying when fraud has become a problem. One panelist said his organization uses decline data to determine when someone needs to investigate what has gone wrong with gift card transactions.
Friction was another key theme. Panelists discussed the importance of making the fraud claim process as friendly and positive as possible, so customers don’t feel as though they are being blamed for the problem.
At the same time, organizations are finding value in introducing what one might call “good friction” into the online purchasing experience. Legitimate buyers understand the need for authentication before completing a purchase. Fraudsters, on the other hand, do not.