If you're thinking of giving a gift card this year, you might want to rethink your idea. It turns out that they may not be the gift that keeps on giving or the best choice for that hard-to-shop-for person after all.
Last year I discovered that not all gift cards are created equally. While many of us believe gift cards will never expire and are as good as the cash value they're denoted with, it may not be so.
I came across a great article about the negative aspects of the gift card and thought these highlights might be worth a read before selecting them for your gift recipient this Christmas.
THE UGLY SIDE OF GIFT CARDS
1. Infinity and Beyond?- Many believe that gift cards are good forever, and most stores do operate this way and honor that policy. On the other hand, some do not and have expiry dates unbeknownst to the purchaser and the recipient. This is generally not the case with a major credit card gift card such as Visa or Amex, however some smaller stores often do implement such a restriction. If you are the recipient of such a card, it is best to mark the expiry date on your calendar and use the card up as quickly as you can.
2. Fees, Fees, Fees- Did you know that many gift cards issued by credit card companies will actually start deducting from the balance of the card if it hasn't been used in a particular timeframe? Some cards may start deducting as much as $2.50 per month after the first year! Many of these cards involve a fee to obtain them to begin with so they can be quite pricey all around. This doesn't wish you or the gift recipient a very Merry Christmas.
3. Left High and Dry- With the plethora of stores that are going bankrupt, they leave gift card recipients without a place to use their card, thus it goes to waste. A friend of mine purchased a prepaid gift card for herself to a prepared dinner club where frozen, homemade meals can be purchased, only to find out they had gone under and she had barely put a dent in her card. She found this out by dropping by and seeing a sign in the window. She called and tried to get her money back but they were unable to help her out. Before buying a gift card for anyone make sure you know the financial status of the company.
4. Some Restrictions Apply- Many retailers with online stores will not allow their gift cards to be used on the web such as CVS. These restrictions can be quite frustrating in general, especially for men who typically don't frequent stores and aren't generally interested in shopping in busy stores. Another common issue is cards purchased in say the U.S and mailed to Canada. I found this out the hard way with a $200 Potterybarn gift card that some colleagues' had purchased for my bridal shower. When I went to shop online or redeem after I had moved to the U.S., the card was only good in Canada. I had to wait until I was back in my good old home town to make my purchase.
5. He's Just Not that Interested!- Sometimes our best intentions to provide a useful gift such as a gift card may not be well received. Perhaps the recipient isn't interested in the particular store that the gift card was purchased from. Worse than this are those that ldamage or ose their cards or misplace them in a shuffle of paperwork or they are stolen, etc. Most times these cannot be replaced, but there are some companies that will help you out. If you are the recipient of a card for a store you loathe, you can sell or trade yours on http://www.plasticjungle.com/ or http://www.giftcardsagain.com/
It's been reported that a whopping $5 Billion of the money spent on giftcards in the U.S. will NEVER be used! Shocking, isn't it? This actually happens to be the exact reason why store gift cards are so heavily promoted. Many stores recognize that many will never be redeemed AND if they ever are, the recipient will usually purchase something for beyond the amount that the card is valued at, so it is a win-win for them. Another common scenario are shoppers that make purchases with their gift card and wind up with $3.42 for example as a remaining balance. Many will never make the trip back to a particualar store just to redeem that amount so it is money lost.
Here is the original article.
In spite of this new found data, I will gladly accept a Potterybarn (despite my previous experience), Ikea, Whole Foods or Starbuck's giftcard any day of the week. They are solid stores that always have what I love!
How about you-have you ever had one of the above situations happen while attempting to use a gift card?