Free calculator
Gift Card Breakage Calculator
Enter the gift card value you sell and your estimated breakage rate. The calculator shows the value likely never redeemed — and the overspend revenue from the cards that are.
Expected breakage per month
$160
$1,920 a year of card value that's likely never redeemed. Treat it as a liability until your accountant says otherwise — escheatment laws in some regions claim unredeemed balances.
Overspend revenue per month
$368
Redeemers spending 20.0% above their card add $4,416 a year — often worth more than the breakage itself.
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The two ways gift cards pay
Breakage is the share of card value never redeemed — published industry estimates often sit in the single digits to low teens percent. The quieter win is overspend: most redeemers buy above the card's value, turning a $50 card into a $60+ order. Cards also recruit customers your marketing didn't.
Don't book it as profit on day one
An unredeemed card is a liability until it's redeemed or lawfully recognized as breakage — and in some places (several US states, for instance) unredeemed balances eventually escheat to the state rather than to you. Recognition timing and expiry rules vary by jurisdiction; this calculator estimates economics, your accountant handles the accounting.
Full walkthrough: How to handle gift returns in your online store.
More guides on this topic
Frequently asked questions
What percentage of gift cards go unredeemed?
Published industry estimates have generally fallen in the single digits to low-teens percent of card value, and the rate drifts down as digital cards and wallet reminders make redemption easier. Use your own history once you have a year of data — breakage varies a lot with how the cards are sold and delivered.
Can I count gift card breakage as revenue?
Eventually, under conditions. Accounting standards let merchants recognize expected breakage in proportion to redemptions, but unredeemed balances remain a liability until then — and in some jurisdictions escheatment laws send old balances to the state instead. This is firmly accountant territory; the calculator only sizes the economics.
Do gift cards expire?
Often they legally can't, or not quickly: US federal law requires at least five years for most gift cards, several states ban expiry outright, and other countries have their own rules. Shopify gift cards don't expire by default. Design your program assuming the liability is long-lived.
Why do gift card customers spend more than the card value?
The card acts as found money against a purchase the shopper was going to size to their taste anyway — few carts land exactly on the card amount, and topping up feels cheap. That overspend, plus the new customers cards bring in, is usually worth more than the breakage itself.