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Fantastic Plastic

3 ways gift cards can increase your sales

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This story appears in the September 2003 issue of Entrepreneur. Subscribe »

Sales of gift cards are booming. Last year, retailers rang up more than $36 billion worth-and in December alone, Starbucks customers spent a whopping $37.5 million on them.

These plastic cards can help you make money in a variety of ways. Consider breakage-the unredeemed value on the cards. Breakage estimates range from 5 to 10 percent, and at least 15 states have successfully lobbied state regulators to ensure that unclaimed dollars from gift cards are specifically exempt from abandoned property laws, allowing you to keep the remaining dollars. And even if customers do end up using their cards, remaining balances are carried over-encouraging incremental trips to your store.

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