The question for cvs, Walgreens, Office Depot and now staples always was are they making or losing money by selling these gift cards?
How much are they paying for them?
Who gets the activation fee? Them or visa?
How much are they paying for cc processing?
I've posted about this before but it bears repeating.
Most retail deals (of all kinds, not just GCs) include money outside of the sale, meaning that companies and distributors are paying stores to get their products in there, and then more for favorable positioning, shelf space, end caps, etc. and more still for advertising, etc.
There are flocks of MBAs in offices around the country for each of these stores, calculating the profit per square foot of each individual branch, probably daily, and figuring out how to maximize it while still maintaining a friendly, uncrowded shopping experience. If a product or store under-performs consistently, it gets the axe pretty quickly. It's a business. They can't afford to prop up a losing proposition.
It's pretty safe to assume that if a major chain is selling something, they are making money on it one way or another. And the margins probably aren't paper thin either.
The place where these types of products can get in trouble (and risk getting cut (or becoming cash-only, which might as well be the same thing for us) is fraud. Fraud is costly to the store in the lost product/money itself, but several times more so in the time and energy needed to investigate, comply with law enforcement, put procedures in place to minimize it, train employees, etc. etc. At some point, it can becomes too costly, as we saw with VRs (and similar) at CVS recently.