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Gift card profit calculator

Gift cards are a customer-acquisition tool, but they are also a liability. This tool models both sides over a 12-month window.

Gift card program growth infographic — sales volume, redemption curve and breakage over time.
Illustrative gift-card scenario only. Values and breakage shown are examples, not accounting assumptions or industry averages.

Gift card program profit

Estimate liability, processing cost, recognized revenue and projected breakage over a 12-month window. Numbers update as you type.

Inputs

Result

Cards sold per month (value)$6,000.00
Processing fees per month$150.00
Annual card sales$72,000.00
Year-1 redemption (revenue)$54,000.00
Annual processing fees$1,800.00
Outstanding liability (end of year 1)$18,000.00
Lifetime net per $1 sold$0.805
Breakage recognition horizon24 months

Formula

Monthly sales = cards per month × avg card value

Processing fees = monthly sales × (processing % ÷ 100)

Year-1 redemption = annual sales × (redemption % ÷ 100)

Outstanding liability = annual sales − year-1 redemption

Lifetime net per $1 = (redemption + breakage)/100 − (processing)/100

Assumptions

  • Cards sold per month is constant year-round. Adjust for seasonal spikes (e.g. December is usually 2–3x).
  • Redemption rate is the share of VALUE redeemed in 12 months, not the share of cards redeemed.
  • Breakage projection assumes historical pattern or a defensible estimate. Real GAAP breakage recognition requires audit-trail evidence.
  • Processing fee covers gateway + platform. Physical card production cost is separate.
  • This tool is illustrative. Confirm breakage and revenue recognition against your accountant and jurisdiction-specific rules.

Notes

  • In the U.S., gift card sales are recorded as deferred revenue. They become revenue only upon redemption or recognized breakage.
  • Some jurisdictions prohibit dormancy fees or require specific card expiry rules. Operators should review their local consumer protection rules.

What to do with this number

Three next actions

Healthy breakage and float-on-revenue are real numbers — but only if the program is consistent across sales, redemption and recognition. Turn the math into a concrete card program.

  1. 01 · Template

    Pair with a loyalty card

    Gift cards spend down alone; loyalty cards spend up. Pair them with a restaurant or coffee-shop stamp card template — the gift card primes the relationship, the loyalty card deepens it.

    Browse restaurant + café templates →

  2. 02 · Builder

    Design the card that crosses with the gift card

    Use the full builder to set up a loyalty card with the same mechanic, reward and accent — so the gift card and loyalty card look like part of the same program.

    Open the builder →

  3. 03 · Guide

    Read the gift cards guide

    How to model gift cards on the books, what defensible recognition looks like, and where the loyalty program fits alongside it.

    Read the guide →