When Gift Cards Go Bad POSTED: 11/25/2008 2:15:48 PM

Gift cards make popular gifts in many respects. For people that are hard to shop for, a gift card provides the freedom for them to select their own present, and save the shopper many stressed out hours in the mall. And, for relatives and friends who live far away, gift cards are a fantastic way to save on shipping costs, and still send your holiday or birthday presents.

While gift cards are amazingly popular, and are the second and third most desired gift of women and men, respectively, there are some potential pitfalls that both givers and receivers should know about. In 2007, Americans spent over $26 billion dollars on gift cards over the holiday season alone, but as much as $8 billion dollars spent on gift cards annually will never be redeemed. So, why aren’t people spending their gift cards?

One reason is that some people are just as inconvenienced by the thought of going shopping and finding something to buy with their gift card as the person who opted to buy them a gift card in the first place. If you dread spending hours in the shopping mall looking for the right gift, what makes you think that the person you are buying the gift card for will feel any differently. It makes sense to think that it is easier to shop for ourselves than for others, since we know our own wants and needs, but many people, especially men, report postponing using their gift cards because they don’t want to go shopping. In this case, choosing a gift card from a specific type of store will help, such as a book or sporting goods store, where the recipient can narrow down their options before they leave the house.

Another reason that some people don’t use their gift cards is because they think that they are saving money for the person who gave them the card. It is important for people to understand that gift cards are pre-paid, and that the money has already been spent. For the receiver, a gift card is the same as cash in hand, and not spending it will not save the giver any money. Unlike a check, gift cards have already been processed and the money has already changed hands. To not spend the gift card is the same as giving money to the company or retailer.

When you give a gift card, you might want to consider running over these facts with the recipient, to make sure that they make the most of your gift. If there are any special services, such as online shopping that might make spending the card more comfortable and convenient, you might include this kind of information with your gift. Some retailers have catalogues that explain how shoppers can make purchases online, and pay with their gift cards. Make sure that you include the gift receipt with your card, so the recipient can verify the purchase information if it becomes necessary.

Gift cards can make great gifts, providing that people have the information that they need to get the most of their card. Choose stores that are popular and versatile, so that the recipient has some options, and consider including the store’s catalogue or website address so that the person you give it to can browse their options and get excited about spending their gift card money.