Why do gift cards have an expiry date?

MyRealNameToo

Andy_L said:

eskbanker said:

The cynical view would be that it's obviously in the retailer's interests to minimise the number that are redeemed, but not difficult to justify from an accounting perspective that carrying liabilities forward indefinitely isn't desirable.

and they don't have to maintain any supporting IT system with backward compatibility for evermore

Whilst in principle true I'd question how complex a gift card system is going to be and would assume if a new system is brought in that you would do a data migration to the new one rather than keep the two in parallel for the 2 year expiry date of the last vouchers sold under the old system. 

DeathByFluffy

TELLIT01 said:

Years ago there was never an expiry date on gift vouchers.  The change is simply to enably the business to make more profit.

It's really not - from an accounting point of view it's really not wise to have tens of thousands of pounds of liabilities sat there indefinitely. 

In a previous life I had to try and make the books balance for a medium-sized retailer with a fairly large amount of unclaimed credits / gift cards in the mix - it was a nightmare, and I now completely understand why these things need to have a date after which they're unredeemable. 

born_again

MyRealNameToo said:

Andy_L said:

eskbanker said:

The cynical view would be that it's obviously in the retailer's interests to minimise the number that are redeemed, but not difficult to justify from an accounting perspective that carrying liabilities forward indefinitely isn't desirable.

and they don't have to maintain any supporting IT system with backward compatibility for evermore

Whilst in principle true I'd question how complex a gift card system is going to be and would assume if a new system is brought in that you would do a data migration to the new one rather than keep the two in parallel for the 2 year expiry date of the last vouchers sold under the old system. 

Never mind that each retailer will have their own way of dealing this giftcards. Especially given most are sold by 3rd parties added into the mix.

Uriziel

Because businesses need to be able to plan their inventory. What happens if giftcards last forever and a company accumlates billions of gift card value. One day all those customers come in and want to use their gift cards. The store ends up being empty. They would not be able to get any stock until next delivery and even then they only plan to receive a specific amount and that amount is based on the average amount of items sold every week/month so they would either just be empty for a very long time or they would need to make extra purchases which would probably come at a higher price since manufacturers also always make the same amount of units every month because..... everything is planned and runs on routine. To customers business and retailers may just seem like magic but there is logistics and everything else behind it which runs on existing processes. It's not as simple as you think.