- Pine Labs CEO said the company earns no income from unused balances on co-branded gift cards
- Unused gift card balances are fully passed on to partner brands
- Gift card breakage has never materially contributed to Pine Labs profits
Pine Labs does not earn any income from unused balances on co-branded gift cards and such breakage has never been a material contributor to its profits, Chief Financial Officer Sameer Kamath told NDTV Profit, responding to reports that questioned the sustainability of the company's earnings.
Kamath said unused balances on co-branded gift cards are passed on entirely to partner brands, adding that Pine Labs records no income from breakage either in its profit and loss statement or on its balance sheet.
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"The company earns zero income from gift card breakage," Kamath said, clarifying that unspent balances on co-branded cards accrue fully to partner merchants under the commercial arrangement.
The clarification comes after a report suggested that potential changes to the gift card business could affect a stream of income linked to unredeemed balances, raising questions over the durability of Pine Labs' profitability.
Pine Labs rejected that characterisation, calling the report "incorrect and misleading." The company said it is a fully compliant, RBI-audited entity and maintained that gift card breakage has never formed a material part of its earnings.
The company added that its co-branded gift card partners include large consumer brands such as Amazon, Flipkart and Myntra, and that unused balances under these programmes belong entirely to those partners rather than Pine Labs.
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