Gift Card Pitfalls for Frugal Pigs

What is Wrong with Gift Cards?

Gift cards seem great. They are convenient because they are easy to wrap and seem to be the perfect gift for the person who has everything. Rather than imposing your own gift choice, why not allow your friend to shop for themselves?

So what are the problems with gift cards?

You are still imposing a choice on your friend if you give a store or restaurant gift card. You may be giving a card to a place where the recipient never shops.

And if you are giving small face value cards, they may actually force your friend to spend a lot more money to use them! Studies suggest that most people who use gift cards actually spend more than the value of them! And in the old days, stores would actually give back change in the form of cash. But now the value is left on the card. So even if your friend uses $21 on a $25 restuarant card, they will have to return to that eatery and spend more in order to use up the remaining $4. No wonder stores and restaurants love gift cards!

Lots of people forget to use them. How many times have you cleaned out a drawer and found 5 year old gift cards that are no longer valid. Many cards impose inactivity fees after a short time, and then expire the cards after more time has passed. Studies suggest that many people do not get the full value of their gift.

But Gift Cards are Such Convenient Gifts!

I agree that these little pieces of plastic can be very convenient gifts. Try to use some thought when you purchase them though. A gift card to a restaurant where you know your friend eats, or a store where everybody shops, can be a thoughtful gift.

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