Gift cards: Not so lame anymore
The struggling economy did much to boost the popularity of gift cards, once a last-minute go-to present. For recipients, the cards became licenses to spend on luxuries they had denied themselves.
This post comes from Christine DiGangi at Credit.com.
There are a lot of reasons for that, starting with the idea that holiday sales will be slightly higher than they were last year, according to the National Retail Federation. The NRF forecasts holiday sales will grow by 3.9% in 2013. In its holiday shopping survey, the NRF determined the average consumer will spend $163.16 on gift cards, a 4% increase from last year.
But the shift in gift-card spending is more than a shift in spending — it was accompanied by a change in attitude.
"For some years, gift cards were kind of a strange gift to give, a strange gift to accept," says Trae Bodge, senior editor of RetailMeNot.com’s Real Deal blog. "People knew how much others spent on them, and gift cards were considered an impersonal alternative to time spent on thoughtful shopping." Then the economy tanked, Bodge says. "People lost the ability to shop for themselves. Gift cards gave them permission to do so."
A RetailMeNot survey from last holiday season found 86% of Americans would be excited to receive a gift card. The NRF’s survey from this year said 60% would like to get gift cards, and it’s the seventh year in a row gift cards have been among the NRF’s list of the most desired gifts.
"Gift cards have become the preferred choice during the past few years," says Nimish Thakkar, founder of comparison shopping site DontSpendMore.com. "They are versatile instruments that allow the recipient to invest in a present that would be more suitable to her or his immediate needs."
Popular, but still problematic
In many consumers' eyes, gift cards have transitioned from an impersonal shopping shortcut to an opportunity to treat yourself to a favorite store or restaurant. (Department store and restaurant gift cards are the most commonly purchased around the holidays, according to the NRF survey.)
"What I think is interesting about gift cards is they are popular, but a lot of people don’t use them," Bodge said. It's a common catch: Consumers get cards for their favorite stores but forget to bring them out shopping or don’t remember they have them in their wallets. Sometimes people receive cards to stores they don’t frequent, and that money sits unused.
In that situation, technology helps. A handful of gift card exchange services have popped up, on which people can sell or trade unwanted gift cards -- you lose some value of the card, but it may be worth it to get cash or a card you’ll actually use. Some of Bodge’s favorites for buying and organizing include Gift Card Rescue, Plastic Jungle and Gyft.
Even so, it can be a pain to deal with a gift card for a store you don’t like. Some like to give prepaid debit cards as an alternative to gift cards, but they’re not the same thing. Prepaid cards can come with many fees, and the purchaser often has to pay to activate the card. They’re certainly a useful tool, but it’s important the gift giver and receiver understand how prepaid cards work.
If a gift card sounds like a good idea, but you’re not sure which retailer to choose, there are some general options that will likely be well-received.
"Quite often you feel this pressure to give someone the right gift," Bodge said. "You know they love to shop, but unless you’re really sure what they like, go with a big box store."
More from Credit.com:
Personally, I prefer that my family skip giving presents all together, but if they are going to get me something, please make it a gift card. I cannot tell you how many gifts are packed away in my closet or have been donated to the goodwill. Unfortunately, my in laws do not understand what I like and that I did not want the pornographic tea cups from Korea, the ugly wreath, or the wooden blocks that spell out "yours" and "mine".
Gift cards are awesome! What are the worst gifts you have received?
I have always liked gift cards.
They are always the right size and the right color.
We have never forgotten to cash them in.
My husband's family got to where they would each hand every other sibling a gift card for the same denomination. And, what's the point? If you're going to give your brother a gift card for $50 and he's going to hand you one for $50 why don't you just not swap gifts?
Gift cards are an excellent solution to giving a gift, because it removes a lot of the hassle, is cheaper to send if the recipient is far away (much cheaper than mailing a big box!), and if there is a family, the parents and older kids can have gift cards while the younger ones get the toy, again reducing the amount of cost to mail...and there's no whining about how "auntie" is out of touch with what is wanted for the occasion a gift is needed, or got "ugly clothes" for the receiver.
When it comes down to it, gift cards are just as good as a check; have about the same amount of danger in being mailed if done right; and are the perfect solution for giving a gift to a family member who lives far away when the giver is on a budget.
I would just like to get a Christmas gift sometime, even a birthday gift would be nice. Some of you are lucky to get something instead of nothing. Yet a lot of people complain.
One thing that has always concerned me. It hasn't yet happened to me, but I'm sure one day it will. It seems relatively simple to feel that a gift card is in an envelope with a greeting card. We certainly wouldn't think of sending cash in the mail inside of a card. Although years ago, that is what our grandmas & aunties would do. But a gift card is really no different. Anyone got any ideas on how to send one safely?? Maybe in a small box...
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