Earlier quoted context omitted.
It’s a financial gimmick. The company realizes the income immediately while service is rendered later. This has positive impact on the finances.
That's backwards. The company treats the GC as a liability. It cannot recognize the funds as revenue until they are spent. This is GAAP and law (but see exception below). GCs are valuable to brands because they are marketing tools. Recipients are prompted to go to the merchant to spend money, and they usually spend about 40% more than the face value of the card. Also, GCs are valuable to merchants for breakage . This…
I've never had my $100 GC be worth $104 a year later, but for the issuer it is. They just keep the $4.