A gift card is a prepaid, stored-value card — issued by a retailer, bank, or payment network — that is loaded with a predetermined monetary value and can be used by the cardholder to make purchases up to the loaded amount at participating merchants, either in-store or online. Gift cards are widely used as gifting instruments, employee rewards, and loyalty incentives. From a financial reporting perspective, retailers recognise gift card revenue only when the card is redeemed (not when it is sold), with unredeemed balances carried as deferred revenue liabilities on the balance sheet. The phenomenon of 'breakage' — gift cards that are never redeemed — allows issuers to recognise the unused value as revenue over time. For investors on Ventura Securities analysing listed retail companies, e-commerce platforms, and consumer brands, gift card outstanding balances, redemption rates, and breakage revenue are useful indicators of customer loyalty programme strength and a low-cost form of advance funding that benefits the issuer's working capital.
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