Business Commons^™

The Evolution Of Gift Cards In Secondary Markets And Money Services, Scott Denning, Ralph E. Mckinney Jr.

Management Information Systems Faculty Research

This paper reviews gift cards and the regulations associated with these instruments in financial transactions. One important consideration of gift cards involves secondary markets and money services business. While the accounting of gift cards by retailers is easy when they are redeemed, gift cards become problematic when breakage (non-redemption) occurs. In addition to large organized exchanges for gift cards, many prospective sellers and buyers have turned to non-mainstream dealers to handle situations relating to the non-redemption of the gift card. This has caused gift cards to become an increasingly important player in the secondary market. Another important observation with these …