Gift cards: your gift to retailers?

by

The big news in gifts over the past few years has been gift cards, credit card-like gift certificates, often tied to a particular retailer. One survey, via Payments News, has it that gift cards have passed traditional gifts in the preferences of U.S. consumers:

Picking out just the right gift for oneself proved an important feature of gift cards among consumers according to the Blackhawk Network survey, with 88 percent of respondents stating “I can get what I want” as the number one reason they like receiving gift cards.

Similarly, 73 percent of gift givers stated their primary reason for purchasing gift cards as “I want the person receiving the gift to get what he or she wants.”

Other reasons consumers choose gift cards include eliminating worry about getting the wrong item (52 percent), the convenience of not having to find a specific gift (40 percent) and sticking to a budget (26 percent), according to the survey.

That all sounds great, right? There’s a little hitch, though: according to this Associated Press article (via kottke), consumers will buy but not use $4.8 billion dollars’ worth of gift cards this year:

Shoppers across America have millions of gift cards tucked away in envelopes, drawers and wallets. And some of the nation’s largest retailers are profiting as a result. […]

About 6 percent, or $4.8 billion, of this year’s gift cards will go unused, estimated Laura Lane, vice president of unclaimed property services for Keane Co., a compliance and risk management consulting firm.

Consumer Reports put the figure even higher, estimating that 19 percent of those who received cards last year had not used them because the cards were lost or expired.

“It can add up to significant dollars,” Lane said. “I think the message to consumers is: use it or regift it.”

Even if you do use the cards eventually, they can carry (that’s right, our old friend) hidden fees and penalties, especially if you don’t use them within the first year. This earlier AP article has a decent summary of things to look out for; and Mouse Print (via Consumerist) has a great roundup on fees for Wells Fargo-issued gift cards.

This New York Times article from last year offers another solution: it lists ways to trade in gift cards for cash. Some of the sites mentioned in the Times article:

Don’t let that money go to waste! Focus on buying people things they actually want. If you decide you want to get a gift card, maybe one from a bank or credit card company would be a better choice, since then at least it’s not tied to a specific store, and can be used anywhere they would normally use a credit card. Better yet, if you’re not sure what to get someone, donate that money to a charity on their behalf, rather than donating it to a retailer in the form of a gift card they may not use.

4 Responses to “Gift cards: your gift to retailers?”

  1. Tony Stubblebine Says:

    How about cash? It has all of the benefits of gift cards: person can get what they want, convenience, stick to a budget. It’s also harder to lose and doesn’t expire.

    The only drawback is that there’s some stigma attached to it. The stigma is stupid. Have you ever heard someone who received cash as a gift badmouth it? Never. It’s the people who put effort into getting gifts that nobody wants that are trying to lay a guilt-trip on the cash-givers.

  2. derrich Says:

    Good read. I wrote a little something about gift cards back in November that you might like to read:

    http://www.derrich.com/2006/11/03/all-i-want-for-christmas-isnot-another-gift-card/

  3. Marc Hedlund Says:

    Tony, I agree, cash comes with no hidden fees and is accepted more places than any gift card. If there’s no shame in a gift card, there should be no shame in cash.

    Derrich, thanks for the link — I’m glad that word of this is getting around.

  4. Ralf Says:

    I agree that cash SHOULD be better, but maybe some people feel cash is kind of a cold gift or that once the cash is received it is just put into a wallet and the gift is forgotten (where as the gift card is easier to be remembered as a gift from so-and-so).

    I think if people want to give gift cards, they should follow up with the recipients and remind them to USE THEM !!

Comments are closed.


%d bloggers like this: