Tuesday, November 18, 2008

Gift Cards Are Now an Even Worse Idea

Yesterday NPR broadcast that, with businesses folding right and left, gift cards are not the the way to go this year. By the time your recipient gets around to using that card, the business might no longer be accepting gift cards (yes, they can do that) or could be gone completely.

Bob and I received a Circuit City gift card quite a while ago, but never got around to using it. Last month I heard that Circuit City was going to be closing 20% of its stores in an attempt to avoid bankruptcy and I knew what I had to do: within days we were at a Circuit City in Skokie. It sat across the street from an empty Bennigan's, giving the street the feel of a horror movie, halfway through. There were more employees in that Circuit City than there were customers and I almost felt bad that we weren't there to spend real money. (Actually, I think we did spend about $50 over the value of the card, which was $200 so I guess we did need a few things.)

This experience reminded me of an important gift card approach: when you get a gift card, use it as soon as possible. I have lost gift cards in the past and I rarely feel more irritated than when I've lost free money. But also, now gift cards often lose value over time. They can lose a flat dollar amount or a percentage of their value every year. For those two reasons alone, why would you hold on to a gift card? Spend it on anything!

But now we have an even more compelling reason to spend gift cards immediately, or better yet, to not deal with them at all: the store could fold up completely and then what do you have? A bookmark that cost someone $25 or $100 or more.

NPR relayed the story of an employee who took her annual bonus in the form of a $1,500 gift card which she planned to use to buy her boyfriend a telescope. But then she put off that purchase. And put it off, and put it off. That gift card was for Sharper Image. Yeah. Now she's got nothing but a handful of plastic and the very strong wish that she'd used that gift card immediately.

I could rant all day about how gift cards must be used immediately (use it on anything, whether you need it or not. You can exchange it later), but I know that human nature is to procrastinate on this kind of thing. Why should I get myself down to The Body Shop for a bunch of overwhelmingly fragranced products I don't even want? Or even if it's a store I like, say Victoria's Secret, what's the rush? Victoria's Secret isn't going anywhere.

This is why my pitch today isn't to those of who get gift cards; it's to those who give them. Don't give them. These days gift cards make even less sense than they did before. Between the cards getting lost, losing value or just becoming useless after the business disappears, it doesn't make much sense to give them. Too many businesses are disappearing, seemingly over night. Think of everyone who was holding gift cards for Mervyn's, Linens n Things, Sharper Image, Bennigan's and Whitehall Jewelers when they all bit it.

But there are a couple of reasons that people will still buy gift cards and I realize they probably outweigh all the reasons not to: gift cards are convenient and get you out of having to come up with a real gift. And maybe that's all right since purchasing a gift card is becoming the same as making a donation to the store. In this retail season, that counts as an act of Christmas charity that isn't all bad.

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