Why is it worth it for companies to take your money for gift cards or virtual dollars for spending later? Sometimes they’ll even take $40 and give you $50. What’s the benefit to them?

Question

Why is it worth it for companies to take your money for gift cards or virtual dollars for spending later? Sometimes they’ll even take $40 and give you $50. What’s the benefit to them?

In: Economics

Answer 1

Because very often people never wind up using the gift cards or virtual dollars which basically means free money for the company that sold them.