Gift Cards: Consumer’s Wasted Money

Liz Pulliam Weston writes in her MSN Money column entitled “Gift cards: A bad idea gets even worse”:

Cardholders are considered unsecured creditors in a bankruptcy filing, which places them at the back of a long line of companies and people clamoring for pieces of the bankrupt carcass.

The very real risk that a card can become worthless comes on top of their other hazards, such as:

  • Fees and expiration dates that can reduce or wipe out the value of an unused card.
  • The fact that so many people don’t use their cards.

One in four gift card recipients last year still hadn’t used their cards when polled in an October 2008 Consumer Reports survey. TowerGroup estimated that $8 billion of the $97 billion in gift cards sold last year hasn’t been spent.That should give pause to the people who justify giving plastic cards because they don’t want to “waste money” on a gift that’s never used.

The giving of gift cards raises a few interesting questions. If you care so little for someone that you can’t be bothered to find a real gift for them, or know them so little that you have no idea what they would like, why are you buying them a gift to begin with? There are other options.

In another column, Liz provides other easy and cheap options for gifts that aren’t cards and in yet another column she even provides some nice gifts that are environmentally friendly as they can be continually reused.

Good gifts do not have to cost  a lot of money. My wife and started a tradition on our first anniversary. Before going out for our anniversary supper, we stop at a local department store and have to buy each other a gift for $5 (maximum $10). The first time, I managed to find a nice little watch that was deeply discounted for $5. We changed the battery once, and it is still working. She loves that watch. It was a great gift for a measly $5. It worked because I knew she wanted and needed a watch.

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One Response to Gift Cards: Consumer’s Wasted Money

  1. Austin Chu says:

    I work for a company that manages and tracks gift cards. It’s unfortunate that retailers for filing for bankruptcy, and destroying the trust factor in gift cards. At LeverageCard.com, when gift cards are purchased from us, we guarantee your gift cards when retailers file for bankruptcy: http://tinyurl.com/5nfk5f

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