Do people really prefer gift cards?

Gift cards have never been so popular. What does that say about us and thoughtful gift-giving?

By Karen Datko Dec 7, 2011 4:04PM

The National Retail Federation says that 57.7% of people surveyed -- the most ever -- said they'd like to get a gift card this year.


Gift cards exceed the popularity of clothing and accessories (chosen by 50%), and electronics and other gadgets (35.4%). 


That made us wonder: Do recipients of holiday cheer really prefer to pick out their own presents? Have gift cards thankfully ended the age-old dilemma of receiving something you don't like or want?


Or wouldn't you really rather receive a gift that was lovingly picked out with you in mind? Have gift cards made us lazy and thoughtless holiday shoppers? (Inadvertently adding weight to that point of view, the National Retail Federation, noting other shopping trends this season, said, "Crafts and fabric stores will benefit from those looking to make personal and thoughtful gifts (17.5% vs. 16.1% in 2010)." We added the emphasis.)


Count us in the camp that thinks gift cards are an easy out. But in fairness, let's take a look at both sides.


Why gift cards are great gifts

They're better than cash. If you have debt and you get a gift of cash, the responsible course would be to pay down your debt. A gift card is a more fun alternative. "When the gift card is obviously chosen with my likes and tastes in mind, it is as good a gift as any I receive. Because the ability to shop guilt-free is a very big gift for me right now," "Paidtwice" at I've Paid For This Twice Already has written on the subject.


They've improved. It took federal regulation last year to abolish short expiration dates and onerous fees, making gift cards more attractive. Any expiration date -- they must be good for at least five years -- and fees must be clearly disclosed. You may be charged a monthly fee if the card hasn't been used for a year. For store cards, often you're not.


They're easy, particularly e-gift cards. Could this be one of the reasons why a third of people have nearly wrapped up their holiday shopping this year? Post continues below.

Why they're not great gifts

The reasons gift cards are not perfect gifts are the very reasons why issuers love them.


You'll spend more than what's on the card. That's particularly true with gift cards offered as a bonus with specific purchases (Brad Tuttle of Time mentioned an Ikea sofa promotion with a 15% rebate in the form of a gift card) or in place of cash (think Wal-Mart's holiday price match guarantee, Tuttle says).


They keep you coming back. Tuttle wrote, "Typically, bonus gift cards like the one from Ikea cannot be used on the spot, thus guaranteeing the customer must make a repeat visit to buy something else."


You won't spend every dime on the card. For instance, I received a bank-issued gift card and have not kept track of how much I've spent. Now I'll have to call the special number to find out, and if there's not much left on the card, will I ever get around to it? The bank hopes not.


In fact, MSN Money columnist Liz Weston says:

About 7% of the amount spent on gift cards isn't redeemed each year, which means Americans are sitting on about $30 billion in unused gift cards, according to the gift card exchange site Plastic Jungle. Now that's a waste.

They're often still complicated. My gift card came with a user agreement that looks like the kind you get with a credit card. Fun times. While my card doesn't expire for five years and has no fees in the first 12 months, that's not true of all gift cards.


Candice Choi of The Associated Press wrote:

For example, the gift cards many retailers offer either as incentives or rebates with big purchases are exempt from the rules. You may also be considering redeeming your credit card rewards for gift cards to pass out during the holidays. But those gift cards aren't subject to the new regulations either.

They can be lost or stolen. Make sure you keep the receipt or at least know the card number and, if possible, register the card with the issuer. You may be able to get a replacement with any balance that hasn't been used up by the crook who took it.


Their value could disappear if the store goes belly up.


Still, people love these impersonal bits of plastic. (For those who do, many merchants are participating in Gift Card Weekend Jan. 6-8 with special deals.)


Could one reason be that cash-strapped Americans appreciate being able to buy what they need -- as well as want -- when they receive gift cards? Your Target gift card can pay for the toilet paper as well as a little something special for you -- and no one will be the wiser.


According to Gift Card Granny's calculations, the most requested gift cards for 2011 are Wal-Mart, Target, Amazon, Walgreens and Shell. Yes, Shell.


Do you love to receive gift cards or do you think the giver was too lazy or uncaring to shop thoughtfully for you?


More on MSN Money:


Dec 8, 2011 7:50AM
I think in these times, people would like them to cushion the practical things that they really need.  Shoes for work?  Clothes or even gas is what many people have asked for lately.  Things that they can use more than a watch or a pair of earrings. 
Dec 11, 2011 7:19PM
I don't mind getting gift cards. I can shop the after Christmas sales and get even more for the money. At least I know I will get something I want. Believe me, my family has a bad habit of getting me things I would never, ever want or need.
Dec 11, 2011 10:41PM
I'm not picky. The gift cards I receive are for stores I enjoy shopping at, so when I'm just as happy receiving, say, a Barnes and Noble gift card, as I am receiving a book from Barnes and Noble. If I get the book as a present, hey, I was going to buy one anyway. If I get the gift card, I get an excuse to go waste an hour in a bookstore at my leisure. Win-win.
Dec 22, 2011 1:55PM
I strongly perfer gift cards. I know what I want or need, and I know the right sizes, colors, etc. regarding clothing. I have a few family members that think gift cards are extremely rude and insist on buying me clothes every year. Clothes I invariably have to return for store credit the week after Christmas - I have never kept one thing they've given me. As far as I am concerned, buying ill-fitting clothing that is clearly not my style is far ruder than simply giving a gift card and letitng me go buy something myself. I will be able to try it on, and know it fits perfectly, and it will be exactly what I'm looking for. Merry Christmas.
Dec 22, 2011 10:04AM
I love gift cards for my favorite places to shop.

From me:  I usually get a gift or two and then add a gift card because I may not be sure if whatever else I chose would be loved. So add a gift card to a gift that you know they will love and to me that is more thoughtful.

Merry Christmas to All.

Dec 26, 2011 5:17PM
I have never been a gift card fan, as I think it's a copout to gift giving.  But it's better than getting a gift of perfume, candles or cheap bath crap, which I can't use due to asthma.  No matter how many times you tell someone you can't use it, the more you get the stuff.   But hey, it's the "thought" that counts, right?  It would be more "thoughtful", if they'd listen.  (Not talking about "acquaintances" who have no time to worry about my ailments.  I'm talking about family members for Pete's sake.  They should "get it".)
A pair of socks don't cost as much as that stuff, and I can use those!  Or...hand me that Walmart card and I'll go buy my own.  Tongue out
Dec 24, 2011 1:11PM

I like giving (to certain people) and receiving gift cards....I realize that the sender wants me to get what I really want.

That being said, last year, about two weeks before Christmas I was in back of a lady at a checkout and she bought '14'  $50.00 gift cards all for Macy's !!! Talk about getting Xmas shopping over in a hurry !!! lol

Dec 22, 2011 8:31AM

Gift cards can be great,  but they can also show lack of thought/caring....A card to a bookstore can say 'I know you like to read,... but I haven't paid enough attention to know WHAT you like to read, or what might be on your wish list....' 

A card to an apparel always safe..we all need clothes....but not much thought involved...

With the wide variety out there, even at the kiosk at the grocery store, a person ought to be able to find a card that shows at least a a little thought.


In the end, I think gift cards are mostly best for the givers... 

Dec 11, 2011 5:13PM
Well 5437, it's obvious you don't want tea as a gift either! How many people ever heard of someone getting robbed for his gift cards! That other green paper will get you killed!
Dec 11, 2011 11:36PM
May I gently suggest to parents who want to give gift cards to their childrens bus drivers, we don't make a lot of money, and Christmas tips are appreciated more than you can possibly know.  If you must give gift cards, give ones that as good as cash, such as Visa, or MasterCard, or to a big store that we can shop at, such as Target.  Fast food, and Duncan Donuts should be avoided.  Cash is always best.  Thank  you, and please have a wonderful holiday.
Dec 7, 2011 6:38PM
I would rather have a gift, giftcards are like saying, I don't know what you want, here is some money. Not my cup of tea.
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