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Gift Cards Are Stupid

Posted By Jim On 12/11/2006 @ 10:56 am In Personal Finance,Shopping | 17 Comments

I absolutely hate the idea of a gift card. I understand the difficulty with holiday shopping and I don’t despise gift cards, as some people do, because they lack thought and feeling; I don’t like them because they force someone to spend money at some store that the giver assumes they shop at. In addition to that, companies make money from gift cards because of the fees, the fact that they know a shopper will tend to spend more than the value of the gift card when they buy something, and because 12% of gift cards are never redeemed. I think the most ludicrous aspect of gift cards are the fees – the store already has your money, you can’t get it back, so why do they need to ding you with fees?

A little over a year ago I digested and regurgitated a helpful resource online that outlined the laws that protected consumers against predatory gift cards [3], specifically fees and expiration dates, and that may be helpful now when you receive a gift card in about a month. Some folks are protected against fees and expiration dates, but not everyone is, review the list to see where your state falls.

I propose that Americans pick up a tradition the Chinese use (because the great retail marketing machine hasn’t yet changed “traditions” yet) with great regularity and eons of success – just give cash. For birthdays and Chinese New Years (and any other gift giving time, including the holidays) the gift of choice is money. Cold hard cash. If you have a good idea of what to give someone, I’m not advocating that you scratch the idea and go with money – I’m merely recommending that instead of a restrictive store branded gift card or a fee-based generic card, consider cash.

No one ever gets upset with cash and they’ll have no problem figuring out how they’ll spend it. (If they do, email me and I’ll help them spend it)


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[3] laws that protected consumers against predatory gift cards: http://www.bargaineering.com/articles/gift-card-consumer-protection-laws.html

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