Why your unused gift cards are quietly fueling corporate profit margins

Every year, Americans leave billions of dollars on unspent gift cards. This video explores the economic forces behind this phenomenon, explaining why companies rely on this breakage and how your own mental accounting habits help them turn forgotten balances into pure profit.

The video examines the economics of gift-giving, specifically focusing on the concept of breakage—the portion of gift card balances that remain unredeemed. When consumers fail to use these cards, companies are permitted under accounting rules to recognize the remaining funds as profit.

Mihir J., an MRU 2026 High School Fellow, explains that nearly half of all Americans currently possess unused gift cards. The analysis highlights how behavioral economics, particularly mental accounting, causes individuals to treat gift card funds differently than cash, often leading to deadweight loss and making these cards one of the most profitable products for businesses.

Source: You've Been Paying Companies to Do Nothing: The Gift Card Heist (MRU 2026 High School Fellow Mihir)