The merchant also has the ability to leave any un-redeemed value on the card. That will prompt the customer to return and use the rest of the value. In most cases, when there is little value left on the card, the customer will supplement with another form of payment for the final purchase. This is just one reason that the card increases sales. Also, if the customer has a small amount left on the card, they will supplement the dollar amount spent to get an item that they will enjoy.


Potential Income from Breakage

The term "Breakage" is used in our industry to define the amount of value that has been prepaid and never gets redeemed. There are laws that govern this environment that many merchants are not aware of or are just not keeping track of. The legal term is Escheatment. The law stated that if cash is accepted and delivery of goods purchased doesn't happen in a specified period of time, the money must be paid back to the state where the transaction occurred. Our system produces reports that specifically assist the merchant in tracking all of the information that is necessary for reporting back to the government. The other side of this coin is that there are ways that merchants can eliminate the need to forfeit these funds in their entirety. Our network has the ability after a certain period of time to automatically deduct on a monthly basis a specified amount of value from the card balance. This period can be determined by the merchant. For example: If the card is inactive for twelve months, our system can subtract $3.00 monthly from the value of the card until the value of the card is depleted. With this escheatment process, the deducted amount moves from the liability portion of the financials to the revenue portion.