breakage

Breakage refers to the loss of value or revenue within a system, often due to items, services, or benefits not being fully utilized, redeemed, or claimed. For example, in retail, it occurs when gift cards or coupons are issued but not fully used, resulting in unredeemed funds. In subscription or service industries, some benefits or features go unused, causing profit to fall short of potential. Breakage helps companies estimate potential revenue that, while not realized through direct transactions, still contributes to overall profitability. It's an important concept for understanding efficiency and forecasting financial outcomes.