Sent a letter to Newsday in response to this story (link likely to die after today):
Submitted for Publication
ItÃ¢â‚¬â„¢s called Ã¢â‚¬Å“breakageÃ¢â‚¬Â and itÃ¢â‚¬â„¢s the term used to refer to unredeemed value when any business plan involving a stored value card is constructed. Stored value cards can be gift certificates, pre-paid phone cards, pre-paid debit cards or anything that holds a monetary value, including Metrocards.
In putting together any business plan involving stored value cards, making assumptions regarding breakage is a critical component of the plan. Taking liabilities off the books when cards expire frees up revenue and adds dollars to the bottom line for any marketer employing a stored value instrument. ThatÃ¢â‚¬â„¢s why it took me by surprise to see New York City Transit Spokesman Charles Seaton quoted in your story as saying the issue of forfeited fares is Ã¢â‚¬Å“really no gain to the transit authority because it doesnÃ¢â‚¬â„¢t affect the amount of service we put out.Ã¢â‚¬Â This quote implies that the breakage was somewhat of a pleasant surprise for the MTA. If the MTA engaged in responsible business planning, which IÃ¢â‚¬â„¢ll assume they did, at least a percentage of this breakage would have been accounted for in the plan.
Can one blame the MTA for its low-key approach to the redemption policy? Publicizing it simply takes money from their bottom line. And if the MTA planned the Metrocard program responsibly, they likely had a fairly good idea of how much money the breakage would represent on their books.
Sincerely, Tom Hespos [personal info deleted from original letter]
Let's see if they print it.