Gift Card Breakage Calculator
Cash up front, and some never redeemed.
Breakage
$10,320
12% never redeemed
Gift cards are unusually profitable: cash up front, a portion never redeemed, and redeemers who typically spend more than the card is worth. Note that unredeemed balances remain a liability in most jurisdictions and cannot simply be recognised as revenue — check the rules where you trade.
How the Gift Card Breakage Calculator works
Gift cards are unusually profitable: cash up front, a portion never redeemed, and redeemers who typically spend more than the card is worth. The one caveat is that unredeemed balances remain a liability in most jurisdictions and cannot simply be booked as revenue.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
What is gift card breakage?
The share of value issued that is never redeemed. Estimates commonly land between 5% and 15% depending on card type and expiry rules.
Can I recognise breakage as revenue?
Accounting standards allow recognition under specific conditions, usually in proportion to redemption patterns and only where escheatment rules permit. It is a question for your accountant, not a marketing decision.
Why do redeemers spend more than the card value?
Because the card anchors the basket and the marginal spend feels smaller against a partly-funded purchase. Overspend of 20% to 40% above the card value is commonly reported.
Do gift cards expire?
Rules vary considerably by jurisdiction, and several places prohibit or restrict expiry on gift cards. Check the rules where you sell before setting a policy.