This year, that is the question. Do you give someone a gift card because it’s easy, but run the risk that the store will go out of business before they spend it? Or do you give them cash and then wonder if they bought something fun or used it to pay bills? There’s no right or wrong answer, so here are a few gift card dos and don’ts.

Never Give Bank-Branded Gift Cards
Never give a Visa, MasterCard, or American Express gift card. Unlike store gift cards, these cards slowly eat away the balance if it’s not used within a certain time limit. In addition, there are fees to reactivate them and other bugaboos. If you can’t think of anything else to give someone, just give cash. It’s easier to use and has no rules or restrictions.

Choose a Store They Like
My husband and I tend to receive a lot of coffee gift cards. He doesn’t drink any coffee, and I only drink it a few times a year. It takes me months to use a $10 gift card, and I currently have two in my purse. He may re-gift the one he received. If you decide to get someone a gift card, make sure it’s a general purpose store with something for everyone (like Target or Macy’s), or a specialty store they like. I love to read, so bookstore gift cards are tops with me. Amateur chefs or home decorators will love cards for Williams-Sonoma or Crate and Barrel.

If You Can’t Afford the Expensive Gift, Get a Gift Card for that Store
When my husband and I got married, we received several Bed, Bath, and Beyond gift cards. We used the gift cards to complete our registries. Because we could combine several, we didn’t have to pay out-of-pocket for the gifts. I’ve also had occasions where I wanted a $40 item and had a $30 gift card. That allowed me to buy it without feeling guilty about spending a lot of money.

Kids Love Gift Cards
My cousins always love gift cards. I look for stores like Gap, Old Navy, Target, and Toys R Us where they can spend the cards without dipping into their allowance money or hitting up Mom and Dad to cover the rest. And unlike adults who don’t spend gift cards because they don’t have time, kids will spend those gift cards as quickly as possible.

Check the Expiration Date
Gift cards branded by credit card companies can and do expire. Rules for store cards vary by state. In California, it’s against the law to expire store cards (which is why I’ve been hoarding cards to Best Buy for over a year). Other states leave it to store policy. If you’re not sure, ask before you buy the gift card.

Make Sure the Store is Financially Stable
You can’t completely predict these things, but if the store is looking shabby or the news is shouting that the store is in trouble, don’t buy a gift card to it. No one could predict that Sharper Image would go under so quickly, but I don’t think many people were surprised by the demise of Linens ‘n Things – at least not anyone who got married in the last few years or frequents consumer message boards.

When In Doubt – Give Cash
Some people think giving cash is crass, but we appreciated the checks we received for our wedding. If you just can’t decide where to buy a gift card, then cash in a card is simple and straightforward. It doesn’t require the recipient to do anything except put the money in their wallet and spend it as they please. You also don’t have to make a special trip to buy it.

As I’ve said before, if you really can’t figure out what to get someone, then maybe they shouldn’t be on your gift list. However, there are times when I’ve really appreciated receiving a gift card. Other times, it’s left me wondering whether the person knew me at all. If you plan to give gift cards this holiday season, spend a little effort choosing a card to the right store. Don’t default to the store you’re shopping in at the time.

Comments

2 Responses to “To Gift Card or Not to Gift Card”

  1. Angel Nix on November 29th, 2008 8:01 pm

    I love this so much!!!! It is great!

  2. Carnival of Personal Finance, Cyber Monday 2008 Edition | Mighty Bargain Hunter on November 30th, 2008 11:07 pm

    [...] Money Matters asks: “To gift card, or not to gift card.“  (That is the [...]

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