Like how does the store or company profit off of a $20 gift card that costs $20?
In: Economics
Normally gift cards aren’t bought by the same people who use them. They will give them as a gift which encourages the other people to spend money in their store. If you get a $20 card, you may go to the store and end up spending $25. You wouldn’t have spent any money had you not had the card.
Some people also don’t use the gift cards, lose them, or not use the full balance. Since the store receives cash for the cards at the time of purchase, any money left over on a card or on a lost card is pretty much pure profit for the business
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