Monday, January 7, 2008

5 reasons Gift Cards make a lousy gift

Every Christmas, it seems that gift cards become more and more popular. People give them, people receive them, and the stores market them like crazy.

Here are five reasons why I CAN'T STAND them:

1. They have less value than actual money.
I know some will argue that a $20 gift card is worth $20, I say it is worth much less. The reason is because a $20 dollar bill, has no terms and conditions. I can spend it anywhere, anytime. I can save it and use it later. I don't have to spend it all in one place. I can't do any of those things with a gift card.

2. The fees.

Some gift card companies have the audacity to charge fees! Inactivity fees, activation fees, and even a fee for checking the balance! That's outrageous.

3. Balances go unused.

It's pretty common that when I receive a gift card, I have a hard time finding something within that store that I actually want. I don't want to get ripped off, just because it is a gift card, so I'm not just going to waste it on random things. So what happens is that a fraction of the original never goes used. Apparently I'm not the only one.
Freakonomics authors Dubner and Levitt report in the NY Times that 10% of the gift card balances never get used. That's $8 billion dollars that goes unused every year!

4. I may not want something at whatever store it is that you think I should want something.
While I don't want to be unappreciative, it happens quite often that I get a gift card for a store or restaurant that I have no interest in going to. The good news is that ebay and gift card trading sites like CardAvenue have made it easier to get rid of these and trade for something you'd rather have.

5. Giving me a gift card may actually COST me money.

Again, I hate to be unappreciative, but giving me a $20 gift card to a restaurant is basically the same as handing me a bill. There aren't many places where a couple can dine for $20, so unquestionably, I'll have to add to the gift card balance with my own funds.

1 comment:

Katie said...

I agree that cash is definitely easier to use than gift cards, and most definitely will end up getting used (and not lost for that matter), but personally I would rather have a gift card than some random gift that I can't return or use. As far as the restaurants go . . . depending on the restaurant, you can make a $25 gift card pay for the meal/tip/tax (but it's not easy) . . . but you're right a $20 card would be pushing it. :)