The Ultimate Gift Card Quiz
Estimated Completion Time 2 min
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Image: iStockphoto.com/Melanie Kintz
About This Quiz
People's opinions differ when it comes to giving gift cards. Some will say it provides the recipient with more choices, while others will argue that it takes all of the intimacy out of gift giving. Are these little plastic cards really the way to go? Take our quiz to test your knowledge of the multi-million dollar gift card industry.
START QUIZ
Which of these is considered a major advantage of giving gift cards?
Gift cards cost less than the gift.
Gift cards are easier to carry.
Gift cards provide the recipient with more options.
When you're not sure what someone wants, but you know where they usually shop, a gift card can be the perfect solution.
What percentage of Americans consider gift cards to be an inconsiderate gift?
Approximately one in four Americans polled referred to gift cards as "thoughtless presents."
In which year did the gift card craze begin?
Reuters reports that the gift card industry started really taking off in 1992.
What percentage of Americans have reported wanting to receive a gift card?
Over half of those polled have reported wanting a gift card.
How much money do Americans spend per year on gift cards?
As of 2008, the national expenditure on gift cards was nearly $97 billion!
Which of these best defines a target market?
A target market is the demographic from which the seller is likely to achieve the greatest number of sales.
The individuals who most often purchase gift cards are known as the target market.
Target market refers to a chain of retail stores.
A target market is the demographic that sellers are trying to attract to their product.
What are the two basic categories of gift cards?
open loop and closed loop
holiday season and standard
Open loop gift cards offer greater flexibility, as they can be used at various locations. They also usually have expiration dates. Closed loop credit cards must be used at a particular location, but usually do not expire.
Open loop gift cards are under the oversight of which level of government?
Because open loop gift cards are sold by banks and credit card companies, they are subject to federal oversight.
How would you describe a dormancy fee?
A dormancy fee is a 10 percent kick back to the card manufacturer.
A dormancy fee is a reduction in the value of the card the longer the card isn't used.
A dormancy fee is federal tax levied against gift card purchases.
Some cards lose value the longer they go unused. This is known as a dormancy fee.
How long after receiving a gift card should you use it.
Statistics show that if you don't use a gift card within a month of receiving it, you're far less likely to ever use it.
What portion of Americans use their gift cards within the first month?
Only one third of Americans claim their gift cards within 30 days.
How much more than the value of the gift card do shoppers usually spend?
15 to 40 cents on the dollar
30 to 60 cents on the dollar
50 to 75 cents on the dollar
When people do use their gift cards they tend to spend 15 to 40 percent more than the value of the card.
Which of these best defines breakage costs?
Breakage refers to cards rendered unusable because the magnetic strip has been erased.
Breakage refers to the profits a company makes from the sale of unclaimed gift cards.
Breakage is a tax on all profits stemming from the sale of gift cards.
The term breakage refers to the amount of money a company profits from unclaimed gift cards.
What percentage of gift cards go unredeemed?
Between 8 and 10 percent of all gift card will never be used. This means that Americans spend over $8 billion per year on little pieces of plastic.
What is an escheat law?
Escheat laws protect the consumer against companies who try to cheat them with fake gift cards.
Escheat laws allow states to collect taxes from the profits a company makes when gifts cards are not redeemed.
Escheat laws allow the company to impose hidden fees without informing the consumer.
When gift cards go unredeemed, the company makes an easy profit. Escheat laws allow for taxes to be levied against those profits.
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