Opinions vary greatly about the efficacy of giving gift cards for Christmas or other occasions. Marshall Loeb's Daily Money Tip, Market Watch, November 20, 2007 "Gift cards: the good, bad and ugly" reported that 'gift cards are fast becoming one of America's favorite presents.'
Two years later, Liz Pulliam Weston, MSN Money, December 4, 2009, "Gift cards are the new fruitcake" says that, 'A new Tower Group report predicts purchases will drop to $87 billion from $91 billion in 2008.'
The fact that purchases are down may have more to with the economy than people falling out of love with the idea of the gift card. Giving gift cards is really a case of knowing the audience. Making the purchase appropriate to the recipient makes it more likely to be used.
New Gift Card Regulations Go Into Effect in 2010
American Consumer News, November 29, 2009, "U.S. Federal Reserve issues new gift card regulations," noted that beginning in August 2010, 'a gift card will be good five years after the date of purchase.' This will alleviate many of the concerns regarding cards expiring before the recipient has a chance to use it.
The Federal Reserve will also ensure merchants fully disclose any fees charged while prohibiting some fees altogether, such as dormancy fees except in specific and limited circumstances. Education and reading the fine print are key to getting the most out of this gift.
Gift Cards Popular Among Younger Generation
According to Philly.com, December 8, 2009, "Plastic is fantastic: More folks want gift cards for Christmas," a National Retail Federation (NRF) survey found that over 63% of 25-33 year olds prefer to receive gift cards. Yet the biggest reason people don't give them is that they appear too impersonal.
Statistics also show that millions of dollars worth of unwanted gifts are discarded each year. The cards at least allow people to purchase something worthwhile to them. The cards can be personalized with a name or picture placed on them and can be combined with a small personal gift to dispel the feeling of indifference.
Facts About Gift Cards
According to CreditCards.com, November 30, 2009, gift cards are a $50 billion industry.
Consumer Reports, December 2007 reports that:
- 8-10% of cards go unused;
- that translates to $8 billion into the pockets of retailers;
- the most common reasons they are not used: no time to shop (58%) and couldn't find anything to buy (35%);
- 33% of people redeem cards in the first month after receiving;
Tips About Gift Cards from the Federal Trade Commission
The Federal Trade Commission advises recipients to:
- Only buy cards from trusted sources.
- Read the fine print for fees and restrictions before buying.
- Keep the receipt in case it's lost or stolen.
- Don't wait around to use the card
As the old adage goes, it is the thought that counts. Put a little thought into which type of card to purchase and no doubt the beneficiary will be appreciative.
Lorah Delaney - Lorah is a native of Vancouver, British Columbia. She has a degree in Physical Education from the University of British Columbia and a ...
