Insights
Short analytical pieces on the specific problems that come up when breakage is modeled properly.
A portfolio-wide rate is dominated by recent issuance, where redemption is still active. As a program matures, the blended figure lags the true terminal position — often by several percentage points of outstanding liability.
The month where cumulative redemption stops accelerating is the single most informative point in the dataset. It defines the boundary between active value and behaviorally settled value.
Unredeemed value and reportable unclaimed property are different populations with different tests. Treating them as one number overstates the recognizable position and understates the compliance question.
Low-denomination issuance produces high partial-balance residue; corporate bulk loads redeem fast and near-completely. Mix shifts alone can move a portfolio rate without any change in customer behavior.
Moving from fixed-term to activity-based expiry changes forfeiture mechanics for every outstanding balance at once. Modeling the impact before the change is far cheaper than restating after it.
Acquirers increasingly test the breakage assumption directly. An undocumented rate is a diligence finding; a reconciled cohort model is a defensible answer.
Reference
Breakage vocabulary is used inconsistently across finance, program, and compliance teams. Our glossary sets out the definitions we use throughout every engagement.
Engagement
A confidential, analyst-led review of your stored-value liability — expected breakage, redemption behavior, and escheatment exposure quantified against your own data.
No engagement commitment required. Scope is confirmed before work begins.
