What are giftcards? Where is the money? How do they get the money? Where is the profit margin?

Question

What are giftcards? Where is the money? How do they get the money? Where is the profit margin?

In: Economics

Answer 1

You commit to spending at one establishment. It is money already spent for goods you “may” receive later if you remember to use it. If you lose the card or don’t use it all, that it’s money they business made with zero loss.