Now that the holiday season has passed, shoppers are noticing their wallets are a bit lighter and their checking accounts a bit emptier. A fair amount of that money was lost to a popular gift option: gift cards. A survey by the National Retail Federation showed that 75 percent of shoppers bought gift cards for the 2004 holiday season, spending $17 billion.
They're convenient, safe and often more welcome than another one of Grandma's hand-knitted Christmas sweaters. But are gift cards really all they're stacked up to be, or are the hidden costs higher than the benefits?
People often fail to notice that, unlike Grandma's hand-knit holiday sweaters, gift cards can have expiration dates, extra fees, and lose value over time. For that reason, gift card recipients should take care to use the cards before the expiration dates.
According to the Motley Fool (fool.com), an online finance and investing advice site, "roughly 10 percent of all gift cards are never redeemed." Many Tufts students admit to forgetting to redeem gift cards, and the companies that issue these gift cards ultimately profit from this consumer trend.
In fact, gift cards have become the central issue in recent lawsuits because of the policies that accompany them. According to the Detroit News, several lawsuits claim that "Simon Property Group Inc., the nation's largest shopping mall owner, sells cards that allegedly violate state laws in Massachusetts, Connecticut, New Hampshire and Georgia."
"A Simon gift card with a $25 face value is worth only $12.50 after the 11th month," Massachusetts Attorney General Tom Reilly said in the same article.
Rising legal matters concerning gift cards demonstrate the increased presence of the gift card industry, whose revenue is projected to reach $89 billion
by 2007, as reported by TowerGroup, a research firm owned by MasterCard International.
Consumer Reports Money Adviser magazine released a list of stores with the best gift card policies. These include Best Buy, Costco, Gap, Nordstrom, Starbucks and Target. Gift cards from these retailers never expire, are rechargeable, and come with no extra fees - in short, they're a shopper's dream.
But even these "dream" cards can be nightmare gifts, as some students find them to be impersonal. "I do think that gift cards are too impersonal," freshman Lauren Kari said. "However, I also think that they are still a great gift. Plus, there's the bonus of buying whatever I want."
For freshman Alana Ackerman, there is simply no substitute for a nicely wrapped gift. "I would rather get a real gift, because it makes me feel like the person knows me better and actually put some time and thought into it," she said.
Some students' opinions on gift cards vary depending on who the gift-giver is. In the case of out-of-state relatives, a gift card is more than welcome as a holiday
present. "I don't think it was too impersonal, considering that I got it from my aunt who lives in California," freshman Shannon Connelly said. "I would rather she give me a gift card than a real gift that I didn't like and possibly couldn't return."
"If it's my grandma, who doesn't know me that well, I think it's personal enough," sophomore Katie Chun said. "But compared to my sister or a friend who might know me really well, I would consider it too impersonal. I'd prefer a real gift from those close to me."
Freshman Kiki Samko prefers "a real gift," but said that "gift cards are nice too, especially if you know that the person doesn't really know your tastes, or your sizes."
Gift cards also come with a few physical disadvantages: "Gift cards restrict where one can spend the money," freshman Julian Lopez said.
There is now a solution for that problem. Online services such as CertificateSwap.com, CardAvenue.com and SwapAGift.com allow members to buy, sell and trade gift cards for countless major retailers. Think of it as virtual regifting; nobody has to know.
Of course, there are also students who find gift cards to be the perfect size, style and color. "If you pick the right store, then it is a solid gift," freshman Adam Silverberg said. "It's better to receive a gift card than a baby-blue collared shirt from your aunt that you are never going to wear."
