joreth | Are gift cards ultimately a waste of money?

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zen_shooter has been ranting about these for a while now. They were merely an annoyance to me. Frankly, if someone can't/won't/doesn't have the time to pick out something unique and individual for me, I'd rather have cold, hard cash. Especially since I provide a very complete wishlist to anyone who wants to buy me something. There are 2 reasons I don't care for gift cards:

1) Some people who buy them do so because they don't know me or don't know what I want, but for some reason feel obligated to get me a gift and don't want to *appear* as though they didn't put any thought into it, as cash supposedly signifies. It's all for appearances and obligation. And I hate that. I'd rather not get the gift at all if you think you owe me one or you are trying to pretend like you put some thought into it.

2) I always end up spending my own money because the denominations seem to be carefully designed to be just under whatever really cool thing it is I want. In the past, especially when I was even more poor than I am today, I rationalized the use of gift cards as more of a discount coupon. If I think of the card like a coupon, then I don't feel so put-out when I have to spend my own money on a gift for myself. But then I have to ignore the fact that someone else paid their own money for nothing more than a "coupon". If someone wanted to contribute financially to a purchase, at least the cash wouldn't have locked me into making that purchase at a particular store. What if I don't find anything I like under or near that denomination? I can't take the card somewhere else!

But over the last couple of years, I've come to regard them as scams, and I feel personally offended that the stores are trying to scam me and my friends and family. Stores and restaurants count on gift cards not ever being redeemed. The money spent on those cards is pure profit with no exchange of product. What I didn't know was that a full 10% of cards never get redeemed! That's 8 billion dollars ... billion - with a "B".

And then the stores count on those who do redeem the cards to spend more than the denomination of the cards, as I was saying that I did. People spend 15-40% over the value of the card! So, when I would have walked into Walmart one day and bought myself a $5 DVD, with a gift card, Walmart gets $25 from the gift giver and another $5-$15 from me! That's 6 times the profit!

And, on top of that, here's something I didn't know before. The government is taking a chunk out of all these gift card sales too! The state government uses something called "escheat laws" to collect a portion of the profits of unredeemed cards.

So please, do your family and friends a favor and do not buy gift cards. If you absolutely must give a gift but you don't know the recipient well enough to pick something out, give cash. So what if it's "tacky" ... in this economy, who DOESN'T want a fistful of cash? You could also try asking other people who know the recipient better what the recipient might want.

And, to help all those who are agonizing over what to buy *you* as gifts, do them a favor and make your wishes known. In polyamory and healthy forms of other relationships,

tacit likes to say that you can't reasonably expect to get what you want if you don't ask for it. I'd argue that this is relevant for all relationships, not just romantic ones.

No, I'm not suggesting you go around telling all your relatives that they are expected to buy you gifts now. I'm just saying don't be a pain in the ass when someone indicates that they want to buy you something and you respond with "oh, I dunno, you don't have to buy me anything!" Of course we don't. But someone may want to.

So go easy on them and create a wishlist. Have an online wishlist at Amazon, Best Buy, Blockbuster, whatever, or consolidate all your wishlists into one online service, like The Things I Want. At the very least, keep a few items in your head that are reasonably priced and/or free that you can blurt out even when taken by surprise. You can even do what

datan0de did, which is to pick a favorite charity and request donations directly to them instead of buying you something that maybe you don't need. Ask for hugs, or footrubs, or babysitting duties, or sending out positive vibrations to the Universe - these things don't have to have a monetary value.

Honest communication is what makes relationships work. Gift exchange shouldn't be an exception. It's these sorts of things that make gift-giving so stressful and contribute to the sense of obligation; the sneaking around to surriptitiously discover what the recipient wants without them knowing you're searching, pretending not to want anything to avoid seeming greedy, refusing to allow someone else the pleasure of doing something special for you, etc. ... if you want to know something, then ask. If someone asks, then answer. It's a very simple equation.

Flat | Top-Level Comments Only

Ha, awesome post! SO true, about the gift cards.

I remember when I first started seeing gift cards for sale. When I first saw them, the point was always that you spent a certain amount and got a gift card to give to someone that was a little more than the amount you spent, but you had to buy it in advance. You couldn't use a gift card you just bought on your purchase.

Now gift cards are always for the amount you spent, so their only function is to give a gift when you want to ensure the person getting it will shop at that store. This can be useful for giving gifts to people you don't trust, but isn't generally relevant in gift-giving.

Although I'm okay with giving gift cards when the person has requested a gift card to a particular store. It generally means they plan to buy a bunch of stuff from there anyway and it's pretty much like giving cash. Although it's also probably safer to carry around than cash and may be significantly easier to use online than cash. For example, I don't know if my niece has a bank account (although she can probably get her parents to help her with online transactions) but she wanted a gift card to a store that is online, and so the gift card went to her electronically and was something she could probably use all on her own. That might also make it more useful for some people than cash, which may not be usable for the things they want. Again, not generally relevant.

Sure, if someone specifically wants a gift card for a particular store, then that at least falls under the "give a gift the person wants" idea. My wishlist is rather cumbersome, so if you looked at all, I'm pretty sure you never made it to the page that lists the gift cards from stores that I would accept, because there are stores I shop at regularly and wouldn't mind a little extra help in purchasing some of their more expensive items.

The gift card is still a scam by the store, but at least the recipient specifically wants it. When I was a kid, before gift cards, people who wanted to give me money but thought I was too young to handle my own just gave the money to my parents. Then either my parents held onto it for me and helped me with my purchases, or they bought something for me with the money because they knew what I would want.

In the case of your niece, to avoid the whole scam part, I would have tried to find out what items specifically that she wanted from that store, then ordered it for her, rather than buy a specific denomination that will probably not be the exact dollar amount of whatever item she ends up buying, resulting in either her parents kicking in the extra or the left-over money that I spent going to waste. In fact, that's what I'm doing for my nephew this year.

Well, the main advantage I was pointing out about a gift card in that case is it allows privacy. It allows someone who would normally need assistance to get what they want to get what they want without having to tell anyone. That niece, at the time, was in her later teen years, so the ability to just pick whatever she wanted and get it for herself might be actively appreciated. I don't know if it was, but it strikes me as a benefit to gift cards for a particular age range. Not generally relevant, and I generally dislike gift cards, but potentially useful now and then.

If she needed to kick in more money she probably needed parental involvement, although I don't know whether it'd have been her money or theirs. Weird transitionary ages.

She'll be starting college next year. She'll probably be having her own bank account soon if she doesn't already. Then it'll fall back into the standard issues with adults and money would probably be distinctly better.

Actually, from my understanding companies really like to push gift cards simply because they aren't always redeemed. They make money for selling nothing in those instances.

I didn't know about the tax, but I'll stop buying gift cards from now on and write a check. At least I can then claim 'This way, you can spend it however you like.'

Yeah, they love the gift card angle precisely because 10% goes unredeemed and the rest encourage even more money because the item it's being redeemed for is more than the card's denomination. It's a huge ripoff, much like the diamond company convincing us that it's not true love without a rock that, if the public ever decided to all sell theirs at once, would have oversaturated the market to the point that they all would be worthless.

Now THAT is quite a scam, but a rant for another time!

Wal-mart actually gives you 3c/gallon off at the Murphy gas stations when you use a Wal-mart gift card. Which, to me, sounds like a pretty damn good gift. I'm requesting Wal-mart cards from all my family members who want to give me cash this winter time.

It's really less impressive than it sounds. For 3 cents off per gallon, you only save, perhaps, 30 cents total when you spend $20. Assuming an average 10 gallon tank, at $2 a gallon (which is a bit high for this area right now, fortunately), that's roughly $19.70 you're spending instead of $20 even. It's really not that much of a savings. Plus, you have to factor in the expense of driving specifically to a Murphy station, which may not be the nearest station at the moment you need gas.

See, I enjoy getting gift cards. when I get cash, I end up spending it on groceries, gas or fast food. I just can't justify buying something frivolous that I wouldn't buy otherwise with that money. On the other hand, a gift card to a store helps me to justify buying something special with it, something I wouldn't have bought for myself if I wasn't forced to shop at that specific store, but that I really want. Also, since it doesn't get mixed in with my regular pocket money, when I buy that special thing, I remember who gave me the gift card, and it feels like this thing that I'm buying for myself, and is exactly what I want, is their gift, and they're just letting me pick it out.
Sure they're less personal than an actual gift, but they're more personal than cash, and people will keep buying and giving them, so it's up to the recipient to find some way to look at them that allows them to appreciate it in the spirit it was given.
If you can't change something, change your perspective of it.

My perspective has changed, once I realized how my relatives and I were getting scammed out of money under the guise of being more "personal" than cash. Much like the diamond industry, the retail industry is banking on our sense of obligation and ettiquette to get more money out of us than we'd otherwise be willing to part with.

While I see your point regarding the retail industry pushing these, I don't think they're "scamming" anyone. A $20 gift card costs the giver the same as a fresh new $20 bill, it then passes responsibility to the recipient to use it or not. I can't blame the 10% of cards going unused on retailers, though they do benefit from it.
The retail industry "banking on our sense of obligation and ettiquette to get more money out of us" holds true with traditional gift giving at the holidays, just as much as it does with gift cards.
I still hold that I'd rather get a $20 gift card than a $40 sweater that I will never wear, or a $20 bill I'll just end up spending on gas anyway. Maybe it's just that I too many relatives that don't really know me but feel obligated to buy gifts anyways (though that has nothing to do with retailers, it has to do with Catholic guilt).

Hence the end of my journal entry which advices better gift-exchange habits.

That part I can get behind.

I usually agree with you BTW, this was a rare case where I felt the need to share an alternate opinion.

Also, as I just discovered, a $20 gift card does not cost the giver the same as a $20 bill. When the card goes unredeemed, or the store files for bankruptcy or closes, the giver threw away $20. When the giver sends a $20 bill, that bill is then exchanged for goods or services of equal value.

You are risking spending more for the card than the cash, and in this economy, the risk is higher than normal.

Plus, there may be the issue of who gets the interest on it while it is waiting to be spent.

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