How does HillTop generate additional cash from gift cards?

HillTop generates additional cash from gift cards primarily by selling gift cards that are not redeemed. When a customer buys a gift card, the business receives cash immediately, which can be used to fund operations or other business activities. If the gift card is never redeemed, the company retains that cash as profit, as there is no accompanying cost associated with unclaimed gift cards.

This form of revenue can be particularly beneficial for businesses because it represents cash flow upfront without the immediate need to deliver goods or services. Additionally, many consumers may forget about unused gift cards or may not fully utilize the balance, allowing the business to keep the initial sale amount, thus generating additional profit.

The other options, while potentially relevant to gift card sales, do not directly contribute to generating additional cash in the same manner. Increasing the price of items could possibly lead to higher sales if customers still value those items at the new price. Requiring a minimum purchase with gift cards may impact how they are used but won't necessarily create extra cash unless tied closely to increased sales. Providing discounts for using gift cards could incentivize faster redemption of the cards but generally means a lower revenue per transaction, which does not support the generation of additional cash in the context of unredeemed cards.