This is the second post in a two-part series on giving gift cards. According to a study by Accenture, 57 percent of people have gift cards on their shopping lists this year. In the previous post I covered 5 gift cards not to buy your friends.
CBS MoneyWatch lists 4 rules for smart gift card shopping:
- Beware of unwanted cards
- Keep an eye on fees
- Know your friends
- Choose replaceable or refundable cards
As you can see, unwanted gift cards are a major issue. Giving a gift card can be a hassle to the recipient in general. An interesting point:
While gift cards top many holiday wish lists this year, givers should note that not all cards are created equal. Some may offend or go unused, while others can cost either buyer or recipient (or both!) more than just their face value.
I’ve seen Visa gift cards that cost $3 or $4 just to activate the card! Talk about money down the drain.
This also shows why it’s important to really know your friends and their shopping habits before buying them gift cards. As I mentioned in part 1, you want to be sure the recipient will actually use it. If unused for extended periods, inactivity fees could eat into the value of the card.
I would add a fifth rule: consider giving cash instead. Gift cards limit the choices of the recipient by essentially eliminating comparison shopping. On the other hand, cash is the most flexible gift and is always appreciated. It never expires and there aren’t any inactivity fees. Some might argue that giving cash is distasteful, but when combined with a heartfelt note and card it can be an appropriate gift in most situations.
Gift cards can be good gifts because they allow the recipient to choose what they want most. But compared with cash, gift cards come with a lot of baggage. Tread carefully this holiday season!