Here are Three Possible Reasons Why
Last week, eBay sent an email to its customers explaining that the company is phasing out the use of eBay gift cards – and this really annoys me!
Here’s the pertinent part of that email:
Starting August 3, 2026, eBay will no longer sell physical or digital eBay gift cards online. For a limited period, physical eBay gift cards will remain available for sale in select stores.
If you already have an eBay gift card, you can continue to use your balance on eBay just as you do today. In the U.S., gift card balances do not expire.
The email does not give any reason WHY eBay is phasing out the sale of its gift cards, so I visited its Customer Service page about eBay gift cards to try and find an answer. Here is eBay’s answer:
Why is eBay going to stop selling gift cards?
We’ve decided to stop selling eBay gift cards and focus on other ways to support customers.
Other ways to support customers? Well, that’s as clear as mud, right?
If you have a physical eBay gift card in your possession or a gift card balance on your account, those will not expire. And if you buy a physical gift card now or even after August 3, those will not expire, either. But the physical gift cards will be going away.
This is upsetting news for me and the other collectors that I talked to about this.
While it does have its fair share of flaws, eBay is a great place for card collectors to shop. In the past, I have asked for an eBay gift card from family members as a Christmas or birthday present – and they finally started listening to me! Now I will have to ask for something else.
eBay has not given a real reason as to why they are phasing out its gift cards. This is purely speculative, but here are three possible reasons why eBay is getting rid of its gift cards:
1. To Cut Down on Fraud
Gift card scams have reportedly caused $217 million in losses 2023 and another $212 million in losses in 2024. (There is no hard number yet reported for 2025.) This is counting gift cards across all brands (Amazon, etc.) and not just eBay. eBay gift cards are a popular choice for scammers since you can buy almost anything at its website. It is a huge headache for eBay, who will get blamed for the scam, who has to pay customer service reps to handle fraud cases, and has to pay any chargebacks if an eBay gift card was paid for with a stolen credit card. eBay gets the blame, assumes the financial losses, and has to deal with problems it did not create.
2. To Increase Profit Margins
When a $100 physical eBay gift card is purchased at, say, a grocery store, the store might get 1% of that $100, while the distributor that maintains the gift card kiosk might get 2% or 3%. That still leaves eBay $96 out of $100. But people who buy on eBay are still going to buy on eBay and will use whatever payment method they need to. eBay generated $11.1 billion in revenue in 2025. Let’s assume $1 billion was in gift card sales. That means that eBay lost $40 million in fees paid to distributors and stores. Eliminating gift cards might decrease its revenue a bit, but not by a billion dollars, as people who will buy on eBay will still buy on eBay.
3. To Simplify its Finances
Gift cards complicate refunds, chargebacks, and tax reporting. Purchased but unused gift card balances count as deferred revenue, which is a liability. Unused balances also have different tax reporting rules, which vary from state to state. There are a lot of different variables eBay has to keep track of when it comes to not only when customers spend their gift cards, but when they have an unused balance.
After doing my speculative research, I can see why eBay is phasing out the use of gift cards. I’m not a fan of the idea, as an eBay gift card is usually my favorite gift to receive. But I can understand that, for a company as large as eBay, selling gift cards is more trouble than it is worth – at least from a financial standpoint.
What do you think of eBay discontinuing the use of gift cards? Are you disappointed? Maybe, maybe not. Regardless, it probably won’t stop you from buying on eBay. Leave a reply below – or hit me up on social media @puckjunk – and let me know.
Note: This article is an updated version of an editorial that originally appeared in Volume 4 – Issue 26 of the Puck Junk Newsletter. For stories like these, plus news and updates about hockey cards and collectibles, subscribe to the newsletter here.
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