an INTERACTIVE HISTORY of
In 2012, Americans will spend about $100 billion on gift cards. Twenty years ago, the gift card industry as we know it didn't even exist. Where did this overnight industry come from? Follow the meteoric rise of the gift card market from the early 1990s to the present day from three perspectives: Adoption, Regulation and Crime.
Percentage the gift card market has grown per year from 1995-2012
This growth is faster than
Gift cards are the Number One item on adults' wish lists for the 2012 holidays
of people would like to receive one
of all consumers have bought a gift card
The Credit Card Act of 2009 forbids gift card expiration within 5 years of purchase / value adding.
The government has reviewed over 181 bills related to gift cards from 2008-2011 - most were passed.
The value of unredeemed gift cards in 2008 was $96 million.
of the world's GDP laundered, often through gift cards
Store employees are to blame for
of gift card fraud.
of fraud comprised of stolen or fake gift cards.
Amex moves early
American Express introduces gift cheques, their first offering in the gift card space. (1988)
Blockbuster & NM follow
Neiman Marcus and Blockbuster offer the first plastic gift cards, largely to combat counterfeit gift certificates. (1994)
More retailers adopt
Gift cards start gaining popularity with big retailers, including Macy's, the Gap, Bloomingdales, etc. (1998)
Visa introduces the first open-loop gift card in the form of a credit card. (1999)
Forrester Analysts predict that the gift card market would be as large as $17B in 2004. The actual number was triple the estimate. (1999)
Some of the first online gift card companies crop up during the tech boom, including 800giftcertificate.com (2001)
"Some in the industry speculate that the rapid growth in sales of gift cards, which require only a envelope as wrapping, have contributed to slowing gift-wrap sales." (2001)
Gift Cards are expected to account for 8-10% of holiday sales, as opposed to the 5% of years past. (2003)
Q1 blues over
Gift cards attributed for increased retailer sales in January and February, become most requested gift on people's holiday wish lists. (2004)
Customization begins: Sam's club offers environmentally friendly gift cards; Starbucks allows people to design and customize gift cards online. (2006)
Tricks & Gimmicks
Target introduces a tiny digital camera that works as a gift card; Best Buy releases a gift card that can be plugged into an MP3 player and works as a speaker. (2008)
GiftRocket and other startups form to create online equivalents of gift cards. (2010)
The Wild West
Gift cards remain unregulated early on before their mass adoption. (1990s)
States begin regulating
Regulators in California begin to crack down on excessive fees for store credit cards. More than 24 cases against Home Depot, Sharper Image, and others. (2002)
Home Depot Shakedown
Home Depot, in a settlement with the New York Attorney General, agrees to stop treating gift cards like cash if they are lost or stolen, now replacing lost or stolen cards with proof of purchase. (2002)
Simon Sued (pt 1)
The Visa-issued Simon Gift Card begins to receive compliance inquiries for hidden fees by the state of Connecticut. (2003)
National Legislation Begins
The “Fair Gift Card Act” introduced, which would improve disclosure practices for hidden fees on gift cards. (2004)
Simon Sued (pt 2)
The Visa-issued Simon Gift Card gets sued for gross violations of all three rules in Massachusett’s gift card statute. (2005)
Play Fair, K-Mart
K-Mart and the Darden Group (Olive Garden) settle a suit with the FTC for deceptive practices related to gift card fees. (2007)
CARD Act passes
US Congress passes landmark gift card legislation, entitled the CARD act, prohibiting closed-loop cards from expiring in under 5 years. (2009)
Gift card related crime begins to bloom, with people increasingly financing gift cards with stolen credit cards in order to quickly extract their value. (2000)
Fraudsters and drug traffickers begin using stolen credit cards to buy gift cards to get cash back or to later buy merchandise to sell. (2002)
A 19-year-old Home Depot employee is arrested for counterfeiting $5000 of the store's gift cards. (2005)
Gift Cards & Medellin?
A federal report suggests that drug lords and financiers of terrorism are increasingly using gift cards to launder money. (2006)
The DEA cites instances of criminals coming to drug buys loaded with hundreds of thousands of dollars in gift cards. (2007)
A Safer Alternative
Marketplaces like eBay become rife with gift card crime, and secondary markets crop up to facilitate secure gift card exchange. (2008)