At first glance, a gift card seem like the perfect present. You don't have to worry about getting your friend or family member something she can't use - with plastic, she can buy whatever she wants. Or can she?
Research shows that, if your gift recipient procrastinates, you could be giving more holiday cheer to retailers than your loved one.
On the one hand, things might seem to be looking up. New credit card laws will also apply to gift cards, limiting fees that can be placed on cards inactive for less than a year and preventing funds from expiring on certain cards within five years. On the other hand, that only addresses one party - the gift recipient. But if the card gets lost, forgotten or otherwise goes unused, either fully or partially, where does that leave you, the gift giver, who could probably use some of that money back?
It's something the retail industry refers to as breakage, the amount of money that goes unspent on credit cards. And it's big business, according to the NY Times. Best Buy, for example, recently disclosed that it made $38 million in the last fiscal year. Home Depot made a close $37 million. Some money comes from misplaced cards; some comes after consumers spend most of the cards, but are left with small change -- $5 or less - that they never know how to spend. Some comes after stores go out of business - the executives probably think of it as a parting gift. Either way, it means that already cash-strapped shoppers are putting millions of dollars into the hands of big box stores.
Word to the wise: If you're looking for last-minute Christmas gifts, you might want to consider value as much as convenience. And I'm not necessarily talking about monetary value. If you can spare it and feel comfortable doing it, consider giving cash. Unlike a gift card, you know it will never go unspent. But if that feels awkward - or unaffordable - why not give something homemade, like food? Or something thoughtful, like a nicely framed photo of you and the gift recipient? Or, instead of a certificate to a restaurant, why not offer to take your friend out to lunch? Let your imagination run wild here - the way people did before the so-called convenience of plastic.
The old adage still rings true - it's the thought that counts. Something memorable - even if it's less expensive - is worth more than a card that could become lost among dozens of other cards in the average wallet. Now, if you can't afford to even think about giving presents this year, if financial stress is cutting into your enjoyment of the holiday season, maybe it's time to start thinking about giving yourself a gift. The gift of financial freedom. At DebtStoppers, we can help determine whether a bankruptcy plan is your ticket out of debt and the hassles that come with it. Got questions or concerns? We'll address them for free when you sign up for a complimentary one-on-one debt analysis with a Chicago bankruptcy attorney.
