Here’s another reason not to give gift cards or certificates as presents this holiday season (or any other time). According to estimates by TowerGroup, $8 billion was lost by consumers last year who let their gift cards go unused — expired, lost, or ignored.
Consumer Reports also says that their latest survey shows that 27% of gift card recipients have not used at least one of the cards received. That’s up from 19% the same time last year.
From the company’s perspective, issuing gift cards is a great idea. They receive cash from the purchase of gift cards, but if the cards are never redeemed, they don’t have to move any inventory. From the consumer’s viewpoint, receiving a gift card as a present doesn’t reflect any of their own expenditure, so perhaps people don’t pay much attention to their expiration or loss.
On top of this, some stores charge a fee when you purchase gift cards. My local supermarket charges a $4 to $6 fee for the benefit of purchasing a gift card for the local Best Buy or Borders.
What do you think about gift cards? Do you give them to others as presents? I do sometimes. For example, a coworker recently looked after my cat while I was away, with no expectation of something in return. I felt the right thing to do would be thanking her with a small gift. Now that I know her better, I know of some specific things she would enjoy. At the time, however, we had discussed the new Target that opened nearby. I knew she would be shopping there, so I presented her with a Target gift card. If I didn’t know there was a very strong possibility of her visiting the store in the near future, I would not have taken that path.
How about you?
Avoid gift card pitfalls [Consumer Reports]
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