Retail

Walmart Will Exchange Gift Cards From More Than 200 Merchants

Unused gift cards are a $750 million bonus payment to the card issuers. Wal-Mart Stores Inc. (NYSE: WMT) spotted an opportunity here and is kicking off an offer that begins on Christmas Day that would allow consumers to exchange a gift card they received for a Walmart gift card.

The retailing giant will accept gift cards from more than 200 other retailers and restaurants and exchange them for a Walmart gift card at a value that is less than the face value of the card. On the website Walmart has set up to make the exchanges there is this explanation:

Can I get better rates for my cards or is it the same for all gift cards?
Our rates are determined by market pricing, which is affected by several factors. In order to find the rate for your card, please enter your gift card information to receive an offer. You are under no obligation to sell your card, and we will not retain your gift card information if you do not confirm your exchange. Please note that the offer you see displayed for the same gift card of the same value may change from time to time.

Walmart uses a third-party vendor to manage the exchange, CardCash.com, which already operates a major gift card exchange where it resells gift cards at discounted rates.

Now, about those unused cards. Research firm CEB TowerGroup reported earlier this month that gift card sales will total $124 billion in 2014, a 55% increase in just six years. The $750 million in unused cards works out to just 0.6% of the total, but $750 million is real, free money to the card issuers. CEB TowerGroup noted that in 2007 10% of gift card sales were unredeemed.

Though growth in gift card spending is expected to post only single-digit growth through 2017, retailers have a secret weapon. Nearly two-thirds of consumers spend nearly 40% more than the face value of the gift card.

ALSO READ: Walmart’s Last-Minute Christmas Specials

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