Be Knowledgeable about Gift Cards

Posted by on February 5, 2012

According to the National Retail Federation, the 2011 holiday season marked the fifth year in a row that gift cards ranked #1 on Americans’ wish lists. The gift card business is lucrative indeed, bringing in almost $28 billion in revenue in the last holiday season alone. That’s up substantially from the $17.24 billion spent in all of 2003 on the cards.

There’s no doubt, we’re buying more gift cards and spending more on them. But, in my view, although they’re easy to buy, they’re kind of a cop-out in most gift giving situations. Before you dive into the gift card kiosk at your local supermarket, consider this: some recipients will never use their gift card, and the majority of them will spend more than the gift card amount … some present, huh?

Then there are the rules to consider before purchasing a gift card. Most gift cards, especially bank-issued cards, come with a set of rules. The federal legislation that went into effect in March 2010 that provides consumer protections for credit cards also impacted gift cards. Generally speaking, a gift card must be valid for at least 5 years from the date of issuance, no fees are allowed for the first 12 months. Some states have stricter laws, which remain in effect. To find out your state’s gift card law, click here. (You will be connected to a summary provided by consumerunion.org.

If you do choose to give gift cards, make it a wise decision. Gift cards do have their place, as a business referral gift or as part of a more personal, practical present for a housewarming or wedding. Keep gift cards in your back pocket, so to speak, the next time you’re faced with a gift giving dilemma. Do your best to find a personal gift if the occasion calls for it.