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Definition of 'Breakage'
Revenue gained by retailers through unredeemed, expired or lost gift cards. Breakage refers to money received from gift cards but never redemeed by customers. In 2006 it was estimated that consumers lost over $8 billion annually due to breakage. Most retailers no longer place restrictions (i.e. dormancy fees, expiration dates, etc.) on their gift cards to eliminate the accounting uncertainty they create.
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Investopedia explains 'Breakage'
In 2007 the FTC settled a case it brought against Darden Restaurants for failure to disclose its gift cards dormancy fees and reached the same outcome in similar action it filed against Kmart. The rulings required both companies to reimburse customers who lost money due to the inadequately disclosed gift card fees.
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Search results for 'Breakage'
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http://www.investopedia.com/articles/pf/07/overspending.asp
... Retailers refer to a failure to redeem a rebate as "breakage" and rather than being
an anomaly, retailers often count on a certain percentage of breakage and ...
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http://www.investopedia.com/articles/pf/06/carinsurance.asp
... is unnecessary. -Glass Breakage: Some companies do not cover broken glass
under their collision or comprehensive policies. In general ...
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http://www.investopedia.com/articles/pf/08/wine-investment.asp
... Defeating Breakage and Spoilage With Storage When you are storing wine that
you'll drink within a few weeks, you can keep it in a wine rack for display in your ...
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http://financialedge.investopedia.com/financial-edge/0811/3-High-Pressure-Home-Improvement-Sales-Tactics.aspx
... What's more, the double lifetime warranty does not cover accidental glass breakage,
which is probably the window expense that people are most concerned about. ...
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http://www.investopedia.com/articles/stocks/09/gambling-strategies-for-investing.asp
... In sports betting, these costs are referred to as the "vigorish" or "juice;" in
pari-mutuel wagering, they are called the "take", with "breakage," the rounding ...
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http://financialedge.investopedia.com/financial-edge/0810/5-Car-Repairs-You-Should-Do-Yourself.aspx
... It's important that you don't touch the new bulb with your fingers, since skin oil
will attract heat and cause premature burnout and possible breakage of the ...
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http://financialedge.investopedia.com/financial-edge/0911/Should-You-Insure-Your-Collectibles.aspx
... and Lloyd's of London. When comparing insurance policies, make sure they cover a
wide range of losses, such as fire, theft, breakage and loss through the mail. ...
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http://stocks.investopedia.com/stock-analysis/2009/Whats-Your-Return-On-Gift-Card-Investment-GPS-JWN-LTD-URBN-AEO0601.aspx
... the liability. Most are between 24 and 36 months. After that, it's considered
breakage and finally recognized as revenue. It's a ...
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