In praise of gift cards

To gift card or not to gift card? Everyone has an opinion about that. But research suggests that those pieces of plastic can in fact make the perfect gift.

Bob at ChristianPF found the information in Kiplinger’s magazine: University of Pennsylvania economics professor Joel Waldfogel estimates that Americans waste billions each year buying holiday presents that are underappreciated by the recipients.

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Waldfogel, the author of “Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays,” said, “When I buy for myself, I spend $100 only if I see something that’s worth at least $100 to me. But if I buy gifts for other people, how do I know what they would have spent for them?”

He added that “surveys that I’ve conducted over the years show that recipients value gifts at about 20% less than what was spent. That’s about $13 billion a year wasted.”

• Video: The cost of gift cards

What can you do? Actually, gifts are fine for little kids and people you know really well, but for others, buy gift cards, Waldfogel suggests. And, while you’re at it, says Waldfogel and also Cameron Huddleston at Kiplinger, you can give a charitable gift card that allows the recipient to select which organizations will benefit. We love this idea.

Several sources for charitable gift cards are:

• Network for Good.
• Charity Navigator.
• TisBest.
• Charity Choice.

Praise for gift cards can be found elsewhere, including Studenomics. Gift cards are last on the Studenomist’s list of eight “Christmas gift ideas that don’t suck.” (“Liquor store gift card” is No. 4. He’s a college student. What did you expect?)

He said a gift card to a person’s favorite store is always appreciated. “This is usually an excellent copout when you have no clue what to get a person,” the Studenomist said. “Hey, at least you figured out what store to get the gift from. You deserve points for that.”

Keep in mind that an MSN Money article describes 13 ways to buy gift cards for less than face value.

Bob at ChristianPF admits that he gives gift cards occasionally, although he’s partial to more personal giving. He adds, “… I love the thrill of trying to pick out the perfect gift, and while the process might not always be as efficient as giving gift cards, I don’t think it will ever go out of style.”

What do you think? Are gift cards appropriate or do their drawbacks -- they get lost, they're not used up, they're so impersonal (for more negatives, see below) -- outweigh the benefits? And do you also love the charitable gift card idea?

Related reading:

• Gift cards are not gifts
• Why gift cards are such a bad idea
• Trade in those unwanted gift cards
• Free gift cards -- yes, really!