Gift Cards and Certificates - Why Buy?

cowboyindDecember 10, 2004

Consumer Reports recently published an excellent article on gift cards and certificates. Here are some things to think about before buying these:

1. What is the advantage of giving the gift card instead of cash? There probably isn't any. Cash is more versatile, can be used anywhere, and is universally appreciated.

2. Gift cards and certificates often expire if not used by a certain date. Cash never expires. Gift cards and certificates are frequently misplaced. Cash is rarely misplaced.

3. Gift cards frequently impose transaction fees -- a fee over and above the actual price of each item you buy. In addition, some have "inactivity charges," where they begin taking value off of the card every month, after a certain number of months of non-use.

4. If you receive a gift card or certificate, use it quickly to avoid these charges, and to avoid having the card or certificate expire.

The bottom line: Why hand your cash -- which you can freely spend anywhere and for anything -- over to someone so they can turn it into a gift card or certificate which is full of restrictions, rules, and gimmicks designed to take your money away from you? As best as I can determine, there isn't any reason to do it. Give 'em cash.

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Hi, Cowboy! Glad to have a chance to say happy holidays to you, since you're a fav of mine. Happy Holidays!

I give cash. I've been giving cash for 3 years now. I buy cute money cards and give cash. One year I sealed the money cards with those giant paper clips from Staples. Everyone loved the paper clips and the cash.

I got a Lowe's card from a relative last year who knows I like tools. When I used it 8 months later I was mildly disappointed that it was only for $25. SO... not to sound mercenary... but I experienced an unexpected downside to the gift cards.

    Bookmark   December 10, 2004 at 1:41PM
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We buy them because many times if you buy say $75 in gift cards they give you $25 in gift cards.

When you're giving gifts for your mail carrier, trash removal person, landscaper, housekeepers, and handyman that recently bailed you out of a huge mess this ads up.

Frankly we buy them for a chain that has more than 100 restraunts in Chicago and for 1/3 free that means that I can either be more generous with everyone or get 1 or 2 people gifts for 'free'.

    Bookmark   December 10, 2004 at 1:55PM
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Hi all,

Back when I was in High School, movies cost 50 cents, but we could get 12 tickets for $5.00 - which means that both the movie house and the purchaser benefitted.

I don't like equal value gift certificates.

Why should I exchange a piece of paper that the recipient can use in 3,000 locations for another of equal value that s/he can only use in one place? The store gets an obvious benefit - the certificate buyer doesn't.

The store gets the money now. The merchandise stays on the shelf - for someone else to buy for cash, etc.

Suppose the store goes broke? That piece of paper gets to be scrap paper in a hurry.

Maybe the recipient loses the certificate - they are less carefully ridden herd on than cash.

Or s/he scarcely ever darken that store's door - maybe their merchandise is too upscale for her/him, etc.

Or, when going there to shop - forgets the certificate at home. Drat!

There is one advantage, that I can see.

If I buy an item for my friend/relative, etc. - I buy before Christmas and pay full price.

If I give the certificate at Christmas, the recipient can use it to buy a larger quantity of goods in the after-Christmas sales.

Some would take the product that I'd given to exchange, but that's more hassle, etc.

Did I mention that maybe the recipient may lose the certificate?

Then the store owner got the money - some time ago - and never has to part with any merchandise.

Great for store owners - not so hot for buyers.

I really resent the ones who reduce the value after a period: they say that it's an imposition carrying the item on their books.


They just had a major deferral in the time when thy had to part with the merchandise, that's all.

Hope you all have a great holiday season.

Remember the real spirit - don't get burdened down with chores.

joyful guy

P.S. When you're retired - every day is vacation.


    Bookmark   December 10, 2004 at 4:57PM
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I buy them because I get Upromise cash, at least on many gift certificates.

    Bookmark   December 11, 2004 at 12:58PM
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Thanks, Cube1067, Happy Holidays to you, too!

Yes, it does seem that if you are getting a free gift card or certificate, or "cash back" or some other type of offer that enhances the value of what you get over and above what you pay, the cards and/or certificates could be a good buy.

Speaking as someone who has gotten the cards or certificates, I definitely appreciate them. If you use them quickly (within a couple months) there generally aren't any fees or costs that detract from the value of the gift.

Maybe a good thing to do if several members of the family have gotten gift cards (especially children, who might be most apt to misplace or forget about them) would be to keep them all in one place and then have a "second Christmas" sometime in January, where everyone goes out together and spends their gift cards and certificates. Could be a nice way to break up the mid-Winter monotony.

    Bookmark   December 11, 2004 at 1:17PM
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I love getting gift cards. We are on a tight budget and I rarely spend money on myself. When I get cash it always ends up being spent on groceries or other mundane stuff. When I get a gift card it's like permission to spend that money on just me. It's a real treat to look forward to. A good example is: right now I need shoes. A gift card from my mom to a shoe store will allow me to get them after Christmas at a great price. From my DH, a gift card to get a facial at a spa!

    Bookmark   December 11, 2004 at 4:07PM
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I called WalMart about the fees for their gift cards and there are none. If you buy a $25 card the receiver gets $25 worth of merchandise. I also asked about the length of time to use them, there isn't any as far as the clerk knew. But you lose some value down the line, 5 years or something like that. If the receiver can't spend it before that he doesn't need it very much.

    Bookmark   December 12, 2004 at 2:52PM
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I bought some through the school from Bath and Body Works and Pizza Hut. The school gets 20 cents on the dollar, and I figure that will buy more special treats for people who I know will use it--like all my college age nieces and nephews. I do wish they would put the value on the card. Do you think it's tacky to attach a sticky note with the value so they don't get carried away and overspend?

    Bookmark   December 15, 2004 at 11:22AM
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Hi Jonesy,

Just wonderin'.

If you don't use a $20.00 bill ...

... does it evaporate after 5 years?

It may not shrink in size (but it will have shrunk in value).

Hands up - all who have a $20.00 bill that they got 5 years ago!!

Have a glorious holiday, all.

joyful guy

    Bookmark   December 15, 2004 at 6:56PM
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Good point. The problem with gift cards isn't that the person "doesn't need them very much," but that they put them away to spend on a future occasion, and then forget. This has happened to me a few different times with restaurant gift certificates. You go to spend the certificate and find that it has expired.

I do see the point of people who say they are getting cash back, money to a school, or other bonuses, though. In that case, the recipient just has to be careful to spend the card quickly.

According to the Consumer Reports article I quoted in my original post, single-store cards (such as Wal-Mart) usually impose fewer unfavorable terms on their cards. The "buy anywhere" cards, such as those issued by a mall, or the ones carrying a MasterCard or Visa logo, are much more likely to impose fees. A woman at work showed me a Visa gift card she received recently for $100. She said there is a $1 fee every time she uses it, and it expires 12/31/2005. But she knows about that, so it won't be a problem for her. She said she plans to spend it on a few larger items rather than many small ones, reducing the accumulation of $1 fees, and she laughed about expiration date, saying it'll be gone long before that.

But that does not change the fact that millions of dollars every year are lost by consumers -- basically just donated to retailers and card issuers -- when they forget to use the cards before they expire or before fees start reducing their value. The answer from the recipient's standpoint, of course, is to use them quickly. But from the gift giver's standpoint, I plan to give fewer of these cards and give more cash, because I'd rather not risk having the money I spent for someone's gift just being thrown out the window.

    Bookmark   December 18, 2004 at 8:09AM
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Hi again cowboyind,

If I may ...

... not " ... thrown out the window ... " but

got suckered once more by some financial institution into dropping into their pocket.

Which I think they stay up late nights figuring out more ways to nickel and dime - or even dollar - us.

Granted, not " ... to death ... " (or even into the poorhouse, for most of us).

Without giving much, if anything, in return.

But I think that it's part of the game here to help one another learn how to avoid their money-grabbing tricks.

I'm with you - give the cash. Useful in 3,000 stores in town, not just one (or a few).

Put a sticky note on it saying you'd like them to use it to buy something that they'd like and have been thinking for a while that they'd get, but possibly felt that it was a bit too expensive, or some other reason. That will last for a while and will inspire them to think of you when they use it , e.g. a magazine subscription.

Good wishes for a memorably happy holiday season.

joyful guy

    Bookmark   December 18, 2004 at 2:15PM
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Thanks, and Happy Holidays to you as well.

The magazine subscription you mentioned is another good gift idea. If you know what magazine the person likes, a subscription or an extension to a subscription is always welcomed.

It's a slightly different topic, but in recent years I've been moving away from "stuff" as gifts. Most people already have so much junk cluttering their homes that the typical gift item often winds up just being another thing to figure out where to put, dust, and eventually get rid of. Without knowing exactly what someone wants or needs, your odds of giving them something that's really useful or desirable to them are probably less than 50-50. The money wasted on all of these unwanted gifts is only half of the problem; the other half is the demand we create for all manner of practically useless "trinket" type items that are frequently marketed as "perfect gifts" on tables placed in the center of aisles in stores during the holiday season.

Cash gifts solve all of those problems.

    Bookmark   December 18, 2004 at 5:29PM
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Just a reminder to everyone to "spend" your gift cards before the expiry dates/maintenance fees erode the value of a gift that someone spent their hard-earned money on for you.

I learned the hard way today: the "Shop" cards (good at most stores in the Cadillac Fairview malls in Canada) which have languished in my desk drawer for as long as 2.5 years lost a lot of their value due to the 2-dollar-per-month-plus-tax fee that kicked in after 15 months of non-use. One $25 card was by today worth only $1.62.

Again, always read the mouse print if you must buy or receive gift cards.

    Bookmark   February 17, 2007 at 6:35PM
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Hi Krustytopp,

I've been dealing with an invasion of little critters recently, that may be mice - but on the other hand, they don't look quite like garden-variety mice ... more like junior sized rats.

Anyway ...

... the tracking that they leave behind to let you know of their presence is quite similar, whichever they are and is here ... in quantity.

I'm busy gathering those little black, elongated pellets up, to add to the compost pile.

I could perhaps send some to you (possibly labelled as "by-products - of little commercial value" to satisfy the concerns of the postal folks) to take with you when you visit the store that dribbled away the value of your "gift " card/certificate on you.

Maybe they'd like some of it scattered along their "service" counter ...

... or you could suggest to them that you could drop some of it among their merchandise, e.g. sweaters, socks, underwear, etc. - to about equal value of the stuff that they denied you.

Or, if they have a snack bar, on the tables in there?

How about on their check-out counter? I'll bet the check-out staff person would be impressed with that!

How long do you think that it'd take for them to get cleaning staff to show up? Do you think that the check-out staff person would still be in attendance at her/his counter by the time of the cleaner's arrival??

Seems like a fitting reminder of your visit, don't you think?

Have yourself a lovely week.

ole joyful

P.S. Hey - I just thought of a better idea.

Ask to see the manager.

Drop some in his pocket.

Tell him that you think that a fitting response to his company's having stolen value out of yours!

I think that'd be a fitting conclusion to your visit to his store!

Don't you??

On the other hand ...

... if you took the stuff in a Zip-loc bag, showed it and suggested to the various staff people along the route that I mentioned that you were thinking of doing what I suggested, that what did they think about that idea?

Ending with your discussion with the manager.

I'll bet that they'd remember your visit for a while!

On your next visit to the store, you could ask to speak to the manager again ...

... and remind him of your displeasure at your treatment by his store.

Mention that you still had that little bag at home ...

That you hadn't bought anything at their store today ...

... and wouldn't be doing so for a while.

And that you'd been telling several friends of your unhappiness - for months, now.

That they'd all had a good laugh at your story - and thought you amply justified in what you'd done.

Just thought that he'd like to know.

Give him the bag.

Just mention in passing that you have another like it at home.

No - you didn't threaten them/him with anything.

You were just considering certain possible future actions.

o j

    Bookmark   February 19, 2007 at 2:59PM
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I still think that using the method that I mentioned in the earlier post is a fitting way to deal with stores/ malls that pull such crap on their loyal customers.

If they shi! on you ...

... haul some of a similar product back to their store to offer it to the staff and manager!

Maybe even send a packet of it to head office - addressed to the President (look up the name and send it to the named person).

That'd get their attention!

Have yourself a happy summer (if you live in the northern hemisphere.

ole joyful

    Bookmark   August 16, 2007 at 1:31AM
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Baxzk in the 60's, McDonalds sold coupon books for a dollar that held ten coupons for kids ice cream sundaes. At ten cents each, those were a good deal. Why isn't there anything like this now? Several years ago, I purchased gift cards for my nieces and nephews. They "looked cute" ,like a real credit card. Any cash value you wanted, but the purchase fee was $9.95 in addition to that. They had to be "activated" by phoning a certain number and lost $5 in value each month they sat unused. I bought them then, but NEVER AGAIN!

    Bookmark   August 16, 2007 at 6:57PM
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I'd say that you got stung!

Oh, well ... West Nile Virus won't ensue, at least.

ole joyful

    Bookmark   August 16, 2007 at 8:16PM
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here's another reason not to buy gift cards: you can't put them in the bank.

My ILs always give a big cash present at bdays and Christmas. This year they gave DD the entire amount in a gift card.

Normally, w/ these big presents, I let them take 10% for fun, put 10% in the offering plate, and the rest in SAVINGS.

i couldn't do that w/ this $100 Visa gift card!!

Instead, she HAD to translate that into $100 worth of STUFF! And since my home is drowning in stuff anyway, this was a double whammy.

We very carefully asked them to return to the cash idea, or at the very least, to only give them a small-value gift card.

    Bookmark   September 19, 2007 at 2:12PM
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