Is a Gift Card the Best Option?
Approximately $97 billion worth of gift cards were sold in 2007 and although gift cards may be the most convenient gift to give, they are not as problem free as most gift givers believe. In fact, some recipients never redeem gift cards at all; by mid 2008, more than $8 billion dollars of the previous year's annual gift card sales were still unredeemed. Some recipients simply forget about using them; others try to use them after they have expired and some recipients sell or swap them for something more to their liking.
Fees, Penalties, and Legislature
Some retailers impose penalties and fees if the gift cards aren't redeemed in a specific amount of time, which can cause quite a reduction in the original gift amount. Others expire after only a few months, making them null and void altogether if not used quickly enough. Some lawmakers don't agree with these strict penalties and fees and are trying to do something about the situation. For example, Michigan has legislature pending to make gift cards last 5 years without penalties or fees. Find out more about what the state of Michigan is trying to do about the gift card situation here http://www.businessweek.com/ap/financialnews/
D91HVFR81.htm.
States take different views on the subject. While some states fight to protect consumers, other states fight to have the revenue from unused gift cards returned to them instead of the retail establishment where the gift card was first purchased. You can check the status of the law regarding gift cards in your state by going to the following website: http://www.ncsl.org/programs/banking/
giftcardsandcerts.htm
Some states, such as Arizona, mandate that companies issuing gift cards must disclose expiration dates, while other states require gift cards to have an expiration date of at least 2 years or longer. Other states, such as California, prohibit expiration dates for gift cards altogether. Surely, gift givers don't mean to impose such hardship on gift recipients; most of them are trying to ensure the recipient is able to get something he or she truly desires.
Stores can go out of business
Gift card recipients can be left holding the bag when companies that issue gift cards go out of business before the gift cards are redeemed though. This is what happened to many people who were given Sharper Image gift cards before the company filed for bankruptcy in early 2008. If you are still holding a Sharper Image gift card, you may have to file a claim in Federal Bankruptcy Court to rectify the situation. You can find out more about the Sharper Image gift card situation and what you can do about it here http://blogs.mercurynews.com/consumeractionline/
2008/06/13/sharper-image-gift-cards/
The best thing to do, of course, if you are the recipient of a gift card is to use it as soon as possible. That way, you can avoid any fees or penalties and you won't be stuck with a worthless piece of plastic if the company goes out of business altogether.
Gift Card Crimes and Fraud
For a myriad of reasons, it's just better to spend the time and effort required to purchase a gift that you know the recipient will like. Even when companies honor their gift cards without a hitch and there are no fees or penalties involved, there is still the increasing threat of gift card crime and fraud to be concerned about. The very technology that has made it so convenient to give gift cards to others also makes it possible and increasingly easier for the unscrupulous to fraudulently redeem them before the recipient can. Not only does this happen online; it happens in stores as well. Sadly, in at least 13% of the cases, according to one study, store employees were involved in the fraud.
Wrap it up Instead
As you can see, giving gift cards can be risky and stressful for both the recipient and the gift giver when things go wrong. Besides, who doesn't like opening up a brightly wrapped present with ribbons and bows? Most people love the anticipation of wondering what is contained in the mystery box; however, gift cards have gone a long way toward eliminating that delicious anticipation. While they can be extremely convenient in some situations, have we become so lazy that we don't even try to figure out what the gift recipient would like and opt for a gift card instead?
The fact that $97 billion dollars was spent on gift cards in 2007 speaks volumes about our gift giving habits. Yet, the very gift you meant to give your loved one could very well end up in the state's treasury instead. Sure, it may take a little more time and effort to find and purchase just the right gift. But with all the risk involved, it just makes sense to put forth the effort. Besides, the look on the gift recipient's face when he or she opens what they have been hoping for is priceless!
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