Every year, there are certain dates on the calendar where friends and family expect to receive a gift. Whether it’s Christmas, Valentines Day, a birthday or some other special occasion, the gift buyer can go through a stressful time in looking for the perfect gift. Part of the gift itself is the pain and suffering that others have to go through in order to get you something, and I’ve always been of the mind that giving cash was a cop-out; something that meant “I really didn’t want to think about your gift, so go buy whatever you want”.
Instead of giving cash, at least for the last few years, I’ve been on the gift card bandwagon. Best Buy, McDonalds, Chili’s “¦ the list of cards I’ve purchased in the last few years is quite long, and I’ve always felt good about giving it to others because I know it’s something they will use. But then I got to thinking, “Not only is giving a gift card like giving cash, it’s a specific kind of cash, which is even worse.” One of my 2010 New Years resolutions was to never again buy a gift card as long as I live and the evidence would suggest you shouldn’t either.
The gift card industry is a billions of dollars a year business and almost every retail outlet in the country offers a gift card or gift certificate. Generally, there are two types of gift cards available:
- Retail Gift Card (Closed Loop Card) ““ These are the cards you will find at the counters of your retail stores, which are only redeemable at that specific merchant, or their respected website. There are usually no fees associated with these cards and a good chain will not have an expiration date on when you can cash their gift card in.
- All Purpose Gift Card (Open Loop Card) ““ An all-purpose gift card is usually issued by a card processor like Visa or MasterCard and carries an abundant amount of fees. Activation fees, usage fees, termination fees, monthly fees; it could very well be renamed a fee card instead of a gift card.
Like with any gift, I can expect some kind of depreciation after I buy it but some gift cards are so far over that line, it’s no longer visible. In 2006, Consumer Reports found that $8 billion in gift cards went unused from a year before. EIGHT BILLION. Thousands of consumers were given gifts that not only were forgotten but also are now worthless and can never be used. Credit card merchants and processors are making millions and millions of dollars on consumers each year without having to do anything other than making gift cards.
Then there’s the principal of the matter; giving a gift card because you can’t think of anything else. You are forcing people to buy things they don’t necessarily want or need and sometimes they buy things that are more expensive than the gift cards you give, making them spend their own money in the process. Why waste my time in driving to a store and buying a gift card, then your time driving to a story to use the gift card when I can just as easily give you cash that is good anywhere and everywhere.
So now I’ve rightfully returned to the gift and cash giving experience, not even giving gift cards a second look. Never again will I worry if my money is donated to retailers and credit card processors and I now get to spend 3 weeks tormenting myself to find the right gift, like my father did and his father before him. Feels good too be back to my old ways.