5 On Your Side

When a Gift Card Isn't a Gift

Posted November 12, 2007

A recent survey shows how popular gift cars are: Six out of 10 shoppers said they plan to buy one this holiday season. But Consumer Reports warns that unredeemed gift cards are easy money for retailers and lost money for consumers.

Gift card buyers will likely put $35 billion into retailers' cash registers this holiday season. Gift cards are easy to buy; they're online, in drug and grocery stores, as well as in retail stores and shopping malls. Even banks offer gift cards.

Consumer Reports, however, is so concerned about the pitfalls of gift cards that the group paid for a full-page ad in Tuesday's New York Times. The ad warns that gift cards often do not end up as gifts, going unused and wasting buyers' money.

Their recent survey backs up that warning: More than 25 percent of those who received gifts cards a year ago still have not used at least one of them. Consumers listed their biggest reasons for not using them: no time to shop, not finding what they wanted at stores, and simply forgetting about the cards.

"This year, approximately $8 billion in gift cards will never be used," Amanda Walker with Consumer Reports said.

"They may be lost, or they may expire before they're cashed. But ultimately, it's money in the bank for the businesses that issue them."

If you are certain that someone on your list will use a gift card, your next move is to shop carefully. Many cards have expiration dates and added fees, particularly bank-issued cards.

"Take the I-Card Gift Card. A $25 maintenance fee is automatically deducted after six months and again every six months thereafter," Walker said.

Some bank-issued cards, including some from American Express and Visa, carry purchase fees of anywhere from $2 to $10.

Walker added another warning: "You can't assume bank-issued gift cards are universally accepted, as the issuers will often have you believe."

Another consideration is whether the gift card can be replaced if it is lost or stolen. Some cards cannot be, while proof of purchase must be provided for others. Also read the fine print to see if the card has an expiration date.

If you do buy a gift card this holiday season, check the terms and conditions, so your gift card does not become a worthless piece of plastic. Or, just cash – it never expires, and you can spend it anywhere.


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  • JennyT Nov 14, 2007

    I am doing the gift card this thing for the nieces and nephews -- they like having money to spend. My life simplified, and everybody wins!

  • udoowutchyalike Nov 14, 2007

    When do you ever see an expiration date on cash?? For these companies who issue them, although they are out to make a buck, should be ashamed for issuing an expiration date on something my family member or friend paid with cash. I think I did hear though that our Governor or State Rep or someone in gov't is working on getting that changed for NC. Until that is the case I like to boycott gift cards. Cash is a much better gift, you can use it anywhere and it never expires.

  • olive91988 Nov 14, 2007

    I got a gift card from my husband's grandmother one year to a department store. I went the following week to purchase something from there and found there was an odd amount on the card, something like $18.23. No one goes out and buys a card for such an odd amount. That gift card was "regifted" to me obviously. She had been given it and either used part of it or fees started coming off prior to her giving it to me. Felt pretty scummy if want to know the truth. At least, if a real gift is "regifted" it is still new. My card was 'used'.

  • drh3102 Nov 14, 2007

    This is a huge problem. 8 Billion dollars worth of gift cards will go unsed this year? I can help. When you get a gift card send it to me. I will put it to good use! Thank you,

  • Space Mountain Nov 14, 2007

    I'd rather have cash instead of a gift card, but I still like gift cards. If the people that get them are dumb enough to not use them, that's their problem. This warning is silly.

    Speaking of cash and gifts, I think gift registries for weddings and babies are stupid. It would be much better and easier just to give money. Some people don't follow the registries anyway, and then you end up taking back gifts or getting stuff you don't want.

  • wp Nov 14, 2007

    I love gift cards. They're just easy to use. My family and friends know the places I shop, so it's never been a problem for me. And they always include their receipt with the gift card in case there is a problem.

  • thefensk Nov 14, 2007

    Well, I still prefer cash anyway. A gift card doesn't have that nice flutter when you shake the seasonal card open, and as such it doesn't give you that momentary rush of "oooo, money!" Even a check taps that feeling. A gift card just plops out. "Oh, a gift card."

  • HP Nov 13, 2007

    Here we go again!! Steve Crisp "Mr know it all", now it's "Mr I have everything".
    It must be nice to spend 99% of your time in the places you mentioned & the other 1% in the bed. Don't we all wish we knew all you know & have all that you have & live the life you do. I thought perfection didn't exist & here you are............
    You don't need a gift card or anything else for that matter. Someone get this man a halo.

  • HUSKYLOVE Nov 13, 2007

    You have to watch the "MALL Gift Certificates" too! Streets at Southpoint start deducting $2 per month after a certain period of time passes. Not being a mall person, and really not liking most of the stores there, by the time I found something I wanted, the gift card had lost a third of it's value!

  • owlady Nov 13, 2007

    I hear your point Animal Lover, but let's not confuse the intended gift of money with a fruit cake... ;-)