Gails Blog

Gift cards have become incredibly popular. A whopping $1.2 billion in gift cards are sold every year. Since it is tacky to hand someone a twenty and say, “Buy yourself something nice,” a whole new culture of giving has sprung up around plastic that acts like a credit card (you can shop without touching any money) and looks like a credit card (kinda), but doesn’t wrack up debt.  And it’s been a boon people who just don’t know what to buy as a gift because everyone already seems to have EVERYTHING!

Personally I don’t like gift cards. First, they’re bad for the environment. Second, they distance us from our money (yet again) so we put less thought into our purchases. Third, they’re hard to use. Redemption always seems like such a chore for the check-out person. And fourth, they’re a rip off!

I don’t think I need elaborate on my first point. They’re plastic. They’re often one-use. And they’re multiplying by the millions. And where do they all go when they’re redeemed?

If you have a $20 bill that you could spend on anything, you’re more likely to do a better job of shopping than if you have a $20 gift card that you can only spend in a particular retail environment. Yah, those soaps are nice, I guess, and I have a gift card, so I might as well. Hmmm.

I recently redeemed a bunch of shopping points for gift cards, and that’s opened my eyes to the monsters these little pieces of plastic really are. If you try to use more than one card (and this goes for coupons too) at a time, it’s like you’re committing some major shopping faux pax. The line gets longer as your cashier rolls her eyes at you, and you wonder, “Why am I doing this?” That may be one of the reasons why up to $180 million is lost from people failing to use their gift cards.

In 2006, Best Buy revealed that a boon of $43 million existed on the books from gift cards that would likely not be redeemed. Wow! That’s $43 million dollars in MONEY for NOTHING but a piece of plastic.

Now we come to my 4th point: what a rip-off they are. So, I go into a drugstore to use their gift card and I’m told they can only give up to $2 in change from the card. So while the card is “as good as money”, you can’t convert it back to money, not even in the form of change. You can keep a balance on the card. And up until recently, you had to use the card before it expired or you’d lose that balance. Retailers were even subtracting money from the amount on the card if the card sat dormant for a length of time. Really!

Happily, some provinces are bringing in legislation that says NO MORE EXPIRY DATES or other fees that erode the value of the card. But no legislation will protect you from a company that issues a gift card and then goes bust, leaving you holding the plastic. When U.S. retailer Sharper Image went into bankruptcy, it refused to accept it’s own gift cards.

U.S. credit card companies are getting into the gift card business in a big way. These cards can be used just about anywhere, but usually come with significant fees and restriction. Card issuers also give themselves the right to change the rules however they want, whenever they want. The terms and conditions for the American Express Gift Card indicates they don’t even have to give you notice of changes.

As far as I’m concerned, gift cards should go the way of the dinosaurs. If someone wants to give me a gift, I want some thought to go into it. If there’s not a lot of money available, I don’t care. I truly do believe it’s the thought that counts. So the only gift cards or coupons I’m willing to accept are those drawn with crayons or markers and liberally sprinkled with glitter!

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