The catch is that the interest-free loan can be called in by you, the gift card holder, at any time - so they get less utility from any given amount of gift card balances than they would loans/corporate bonds of the same amount because they're always trying to be prepared to pay out some portion of those balances.
This is why they're treated as a liability in the company books. You can guess or bet that all of your outstanding gift card balances won't be redeemed at once, but there's really nothing preventing that from happening and causing cashflow problems for the company. And there's lots of overhead involved in tracking many many thousands of small balances on cards into perpetuity.
Much easier to encourage people to spend the gift cards and get your financing from proper, predictable business loans or bonds.
Any large issuer of gift cards has an income stream from gift card breakage to the tune of a few percentage points of their outstanding gift card obligations each year.
Imagine a business where people give you cash and don’t ask for 5% or so of it back. Meanwhile your use of that cash is regulated with a feather (compared to a bank or other deposit-taker) and you can earn some yield while you wait for people to ask for their money back.
Most of that is irrelevant here. All they have to do is put in an interest bearing account, and pay out some amount less than they're earning. Furthermore, they will effectively owe you less than even the principle since they (on average) sell the goods for more than they cost. You're forgetting that this liability comes with an over-offsetting asset.
Then, if they have any wiggle room, they can get a further increase by buying back a bond of higher yield sooner, modulated by expected cash flows.
>Much easier to encourage people to spend the gift cards and get your financing from proper, predictable business loans or bonds.
That doesn't follow at all. The longer the gift card goes without being spent, the more free money they get. There's no net benefit to the goods being called sooner.
This is why they're treated as a liability in the company books. You can guess or bet that all of your outstanding gift card balances won't be redeemed at once, but there's really nothing preventing that from happening and causing cashflow problems for the company. And there's lots of overhead involved in tracking many many thousands of small balances on cards into perpetuity.
Much easier to encourage people to spend the gift cards and get your financing from proper, predictable business loans or bonds.