The Case Against Buying Gift Cards

As the holiday season approaches, many people are thinking about what they can buy their loved ones as a gift. According to consumerreports.org, gift cards ranked second in popularity as a gift item in 2006. Best Buy reports that it made a forty-three million dollar profit just from people forgetting to use their gift cards before the expiration date.

According to a survey by the Consumer Reports National Research Center, only 27% of adults that had received gift cards during the 2006 holiday season used them before the expiration date (usually 1 year). The most widespread reported reason for this was:

1. they didn’t have time to shop
   
2. they couldn’t find anything to buy

The credit-card gift cards are a step better, they allow you to purchase almost anything you could with a card. However they too have their drawbacks, as not only could people use them, but also there is a two to ten dollar fee when getting one.

I guess the most important drawback of a gift card is this: “What happens if the store/company that issued the gift card goes bankrupt?” This is not uncommon, as even in Idaho there are multiple examples:

• Sharper Image did not honor its gift cards, but imposed a new rule after it went bankrupt that people could use the gift cards if they spent twice the value of the card on a single transaction.

• Bombay Co., which closed 388 stores including one at the Boise Towne Square Mall, redeemed only 1/4 of each gift card’s value

• Other local examples include: 8th Street Wine Co., Zutto Japanese Restaurant, Franco Latino

In conclusion, one must agree that buying gift cards is a risky venture, and something one should consider very carefully before doing this holiday season.