Panic: Are Consumers Scared To Buy Gift Cards?

Earlier this year when the Sharper Image declared bankruptcy, they briefly stopped accepting gift certificates. Eventually, they did start accepting them again — but with the requirement that consumers buy twice the face value of the card. This, it seems, has caused a fair amount of panic among consumers. Chain emails are circulating warning shoppers not to buy gift cards from various retailers — claiming that they are going out of business. But are they?

The panic comes from the danger that a company might declare Chapter 7 bankruptcy — which means they are being liquidated. Under Chapter 7 bankruptcy, there is a chance that a consumer holding a gift card can be considered an “unsecured creditor” — placing them nearly last on the list to get their money back.

The Sharper Image debacle alerted consumers to this possibility — and the after effects of this panic are still with us. Thankfully, retailers seem to have learned from this experience and many companies that are entering bankruptcy are taking steps to ensure that they are able to continue selling and redeeming gift cards.

Snopes gives a rundown of some current bankrupt companies and what they are doing in regards to gift cards.

So are gift cards safe? Well, they’re exactly as safe as they always were — but it wouldn’t be a bad idea to buy gift cards only from companies that are financially secure.

(Photo: The Joy Of The Mundane )

Comments

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  1. dorianh49 says:

    I’m only scared to buy Burger King gift cards. That king dude is freaky!

  2. ExtraCelestial says:

    I think people not buying gift cards is a good thing. Maybe now companies will get rid of all the ridiculous fees and value docking in an effort to push their sales.

    • MooseOfReason says:

      @TinkishDelight: I don’t know. If you’re going to wait 12 months (a year) to use your gift card, you deserve to have $1.95 taken away every month after that.

      • DarkKnightShyamalan says:

        @MooseOfReason: Really? So the store should be allowed to charge you interest on the money you’re loaning them?

        • madanthony says:

          @DarkKnightShyamalan:

          While I’m not thrilled with the fees, I understand why stores do it, and it’s not just because they are evil. AFAIK, companies aren’t allowed to book the revenue they get from selling gift cards until after the gift cards are redeemed. Since stores want to be able to book revenue as quickly as possible, they want people to use the cards ASAP, and charging fees for inactivity are pretty much the only way they can do that.

          • johnnya2 says:

            @madanthony: So somebody gets to collect interest on that money and pay bill with it, why should they force people to buy something before they are ready to purchase it. It is a loan to the company, which they actually are not required to pay interest on, and you think its acceptable to then charge a fee for the “honor”. Any company that charges these fees will not get my business.

        • Xerloq says:

          @DarkKnightShyamalan: Yes! And the bank can carge you interest on your savings account, and the guberment can carge you interest on the unused cash in your wallet…

          I don’t understand why anyone buys gift cards at all. Cash is King!

    • katoninetales says:

      @TinkishDelight: Some companies already don’t charge fees or expire cards. Doing research on the gift cards to see which ones do that is a good idea if one is inclined to buy them.

  3. APFPilot says:

    I’m not scared, but I won’t be buying any, why should I give companies interest free loans?

    • startertan says:

      @APFPilot: Cash is king. The nice thing about being Chinese is that you can just throw cash in a lucky money bag (houang baw) and call it a gift without the Western labeling of it being tacky.

      • XTC46 says:

        @startertan: Im not chinese, but live in hawaii (heavy asian influence) and have relatives that do this. I think its awesome, im not sure why so many people think cash gifts are bad.

        • B says:

          @xtc46: I’ve got no Asian influence in my makeup, but I think cash is a great gift. Anybody who feels that cash is a tacky gift to receive is welcome to send their cash my way. I won’t be offended.

      • Ajh says:

        @startertan: My family never considered giving cash in a nice card any tackier than a gift card.

        • startertan says:

          @Ajh: When my gf and I first started dating she kept asking what to get my parents. I told her cash but she was disgusted by the idea. So she’d get them various items that they never used. Then she’d get mad when they wouldn’t use them. Here we are almost 5 years later and when the bday and holidays come around she gives them cash. Usually she chips in with my brother and I for a large lump sum.

      • happysquid says:

        @startertan: I got one of those for Xmas one year, it was AWESOME and the bag was so pretty!

    • ludwigk says:

      @APFPilot: Gift cards do not equate to interest free loans for businesses. They can’t even book the sales profits until you spend the gift card. This is due to the way receivables are accounted for, something to do with exchanging a good or service and gift cards not counting

      Gift card purchases are effectively translating your dollars in to a proprietary currency that can only be spent at one vendor, nothing more. No free loans for the company, no inflated sales numbers, just the ‘attachment’ and the return trips you’ll make to use the GC, and the small probability that you’ll lose it. Then, in 2 years or so, that turns into pure profit.

      • XTC46 says:

        @ludwigk: It depends on the company and their accounting practices. A sold giftcard is a liability for the company, not an asset, becasue they still owe someone something. But it does give them cash on hand, so it is essentially a loan, and not only is it interest free, they make money on the loan, becasue the value of what they give back is less than what they took. (since they are selling the item for profit)

        Also, the 2 years rule is not valid everywhere. In hawaii, giftcards cannot expire. The wark around for that however is to charge a monthly or annual fee to maitian the card after 2 years, eventually the balance is 0 and its essentially invalid.

      • Landru says:

        @ludwigk: The money sits somewhere and makes interest. Who gets that interest? And I’m sure there are tons of gift cards that are left with a balance after buying items of lesser value. That money goes somewhere.

    • sleze69 says:

      @APFPilot: Yeah, scared is a bad word. Aware that it is too risky? Yes. I won’t be buying any.

  4. Ash78 ain't got time to bleed says:

    Gift cards SUCK. Surely everyone around here knows better.

    1. A gift card forces you to go to a particular store after the store has already taken someone’s money (hooray, cash conversion cycle!)
    2. Using one usually means you spend more than face value…either in the first visit, or in a subsequent visit (hooray, incremental revenue!)
    3. Many of them reduce in value or completely expire over time (hooray, obsolescence)

    Gift cards benefit the store a lot, but the consumer NONE. And these recent hoax “store closure” emails going around aren’t helping matters.

    • Outrun1986 says:

      @The Name’s Ash78, Housewares: I’ve really never heard of a store-branded gift card reducing in value, except if you buy one of those pre-paid Amex or Visa cards and I am not sure of the purpose of those since they cost money to buy and your essentially giving money anyways. I live in NY state so we may have gift card laws that prevent a card from reducing in value, laws do vary by state.

      The one thing they do is make you spend more at the store, you will almost always spend a dollar or 2 more than the amount of the gift card, if your just trying to buy something. Most people spend a lot more than that. Its really hard to spend EXACTLY 25$ at a store. Retailers love this because they have almost always secured a few dollars extra at least on every gift card they sell, they get people into the store and spending even more that way.

      The only thing I would say is safe is to give a gift card to a grocery store, mostly everyone is in need of food at some point and I think the tendency to overspend with these is less as you would just be using it to pay the weekly grocery bill.

      • howie_in_az says:

        @Outrun1986: Some companies say that if you don’t use your gift card within a certain period of time they will begin charging a “maintenance fee”. So not only are they potentially earning interest on the money used to purchase the gift card, but somehow they get away with charging fees on the gift card. That’s double-dipping, one of the many reasons I stay away from gift cards.

        • gStein_*|bringing starpipe back|* says:

          @howie_in_az: the reasoning behind charging maintenance fees is so they don’t have to keep these gift cards on their books ad infinum…
          many people lose gift cards, so a retailer wants to be abl eto call that “profit” at some point, and not have to wait forever for it to be spent.
          even though i understand the reasoning, and empathize with the retailer, i agree that it still sucks.

      • Kimaroo - 100% Pure Natural Kitteh says:

        @Outrun1986: I happen to know that if my husband received a gift card to a grocery store then he would buy a cart full of candy/cake/junk food.. and beer.

        Weekly groceries? HA!

  5. randomangela47 says:

    I hate gift cards. If you want to be all impersonal and give me some form of cash, at least let me spend it where I want.

  6. dorianh49 says:

    Slightly offtopic, but I noticed that this story was tagged with both “Chapter 7″ and “Chapter 11″. My question is, what if 7-11 goes bankrupt? Do they file Chapter 7, Chapter 11, or both?

  7. lowercase says:

    I’m not a gift card fan in general, unless they’re for small amounts at a place where I spend more than that (like Lowe’s, for example). But on a typical $50 gift card, I inevitably wind up leaving like 2 bucks on there and forgetting about it, effectively wasting somebody’s money.

    But especially now, it doesn’t seem like a great idea, because it seems like there’s less of a warning right now before a company is suddenly in the tank.

    • Ash78 ain't got time to bleed says:

      @lowercase: Yeah, I don’t mind the one’s to Lowe’s really, but it’s almost like the gift-giver is saying “I am aware that you shop at this establishment”

      But I’ll add to my list above, this one:

      4. You make a return and every store is different on how they divy up which portion of the return goes on the card and which goes back to you. Some prorate the items evenly, others go “card first, cash second,” but most just wing it. Sometimes you can ask nicely to have it all refunded to you, but most places act like you’re trying to scam them or something.

      I never understood why you can’t return gift cards for money.

    • ludwigk says:

      @lowercase: I would bet that there is research to show that people shop less critically with gift cards, meaning a higher probability of buying higher margin items and items not on sale, due to some psychological affect of the GC being an abstraction of money. If you have $50, that can be a meal, or rent money, or car payment, resulting in many competing forms of utility. But a $50 GC, has restricted value, and different behaviors associated with it.

      @The Name’s Ash78, Housewares: In California, and some other places, there are recent laws that gift cards below a certain value can be redeemed for cash. In California, its CA SB 250:

      “This bill would allow any gift certificate with a cash value of less than $10 to be redeemed in cash…”

      • chuckv says:

        @ludwigk: I usually sell gift cards on ebay. I’d rather have $20 in paypal which I can spend as I see fit than $25 in itunes, when I purchase music from Amazon.

  8. HRHKingFridayXX says:

    I’m not scared about retailers going under (which, yeah, is a concern). Its more about how retailers are going to have to jack up prices in the new year to make up for the mark downs taken this quarter. Also, I can buy more “stuff” with all of the deals going on now.

  9. waystland says:

    in Alberta, they made it against the law to take fees off if you buy a 50.00 card then it will always be worth 50.00!!!

  10. Dryfus Ranon says:

    Gave the wife CC gift card in summer and told her to buen it. Had $11 remaining and I got her a CD. No gift cards for me or to me. Was thinking of gas cards but Im sure theres some fee associated with them. Will slip in US Treasury bills in place of gift cards and if they are intent on getting a gift card the recipient can go buy one. Cant forget Sharper Image and $60 million, pfft!

  11. Whiskey Tango Foxtrot says:

    I must be one of the few who *enjoy* getting gift cards. I’m an extremely hard person to shop for, not because I want things that are outrageously priced, or difficult to find, but because I simply don’t know what I want! I don’t want/need anything this holiday season, and gift cards give me the opportunity to take my time and get something I really want or need – sometimes weeks or months after Christmas. If people are worried about buying gift cards for certain shops, visit your local mall. All the malls around here offer gift cards that can be used in any of the stores in the mall!

    • RevRagnarok says:

      @Neecy: You’re like me. Every year, grandma gives me a $100 check. I try to document what I did with it and let her know. Don’t need a formal Thank You letter, but usually an email at least. “These are the air compressor accessories I bought at Harbor Freight with my check, Gram!!!”

    • nerdychaz says:

      @Neecy:I am notoriously hard to shop for, for the same reasons. I asked everybody for Amazon.com gift cards this year.

    • HogwartsAlum says:

      @Neecy:

      Yeah, I always like to get Barnes and Noble cards. They told me at the store that they NEVER expire.

    • frugalgirl says:

      @Neecy: You aren’t the only one, I like getting them becuase I can be picky on my own time instead of driving someone crazy buying me a gift.

  12. Git Em SteveDave loves this guy->★ says:

    I decided this year to go with cash. If someone wants to think it’s impersonal, let them. It makes very good sense, especially given the times. I was going to do check, but that makes someone goto the bank. I think most of us when we were kids loved getting that $20 in the envelope and didn’t think any less of someone. So rather than making someone waste the gas to goto the store/bank, let them have something they can put right in their pocket and splurge with. It also helps me balance my checkbook more as there isn’t checks floating around waiting to be cashed.

    As for my delivery, after getting some great responses in a previous post, I think I am going to try my hand at Oragami, and see if I can make some Holiday themed folds.

    • Outrun1986 says:

      @Git Em SteveDave loves this guy->★: I LOVED getting cash as a kid, I think its one of those forgotten joys around the holiday season for kids. Unless your family is like mine where we give kids cash. Parents buy kids so much crap they don’t even know what to play with first so ultimately half the toys end up sitting in the corner and remain there the rest of the year. Usually after all the toys are tossed aside and the gift cards are spent the kid still has the cash too or is saving it for something special etc..

      My younger cousins also love getting cash, although they are old enough to appreciate the value of it and are just coming out of the buy me every toy on the shelf stage. So its kind of a timeless tradition in my family, I am sure getting money for Christmas will never get old.

    • Marshfield says:

      @Git Em SteveDave loves this guy->★: It’s especially nice when the bills are new and crisp.

      we found some nice enclosing cards to put cash in, too, like “santa dollars” on the outside with some little tabs to hold the loot.

      I made the kids give them back so I could re-use them. Once they stripped out the cash they were happy to return them.

      • Git Em SteveDave loves this guy->★ says:

        @Marshfield: Since it’s for family, I go with individual cards that I pick out. I have enough problem picking those out, so actual gifts are seizure inducing. My aunt gave me one one year where when you open it, Santa hands you the bill/check, and that was awesome, but a little too ol’ timey looking for me. I have to visit my bank morrow to cash a check and am going to ask for some new bills. I need them to ensure the folds are correct!

        @Outrun1986: Every year, my Nan would have a little plastic bank where she would walk by and put a dollar in it, some change, etc.. By my Brithday(June) and Christmas(Dec), it was packed full of fundage, and I KNOW she was thinking of me when she put the money in there.

  13. snoop-blog says:

    I buy people nice socks. They don’t brake my budget and not too many people spring for expensive ones. And you can NEVER have too many socks.

    I like to buy the thicker ones because nothing is more annoying to me than having cold feet. Because once they are cold, they never get warm.

    • HRHKingFridayXX says:

      @snoop-blog: Nice one! Tho I am particular about my socks (only like the ankle length athletic type). I think its a great present for kids though. Maybe try slippers for the adults?

    • Outrun1986 says:

      @snoop-blog: I am pretty particular about this too, I prefer thinner socks because thick ones are too bulky and make shoes feel tight. I never have a problem with cold feet. Probably a better idea for a kids gift, maybe buy a couple sizes for those quickly growing feet so parents don’t have to purchase them when they are outgrown.

    • Git Em SteveDave loves this guy->★ says:

      @snoop-blog: I’m a length and color miser when it comes to socks. Mid calf and solid colors, as well as 90%> cotton. I actually mark all the socks from each bag with a different mark, or slightly dye them, so it’s easier to sort them, tell them apart. I’m very OCD for a slob. :)

      • snoop-blog says:

        @Git Em SteveDave loves this guy->★: @Outrun1986: @HRHKingFridayXX: Well I acutally do buy house slippers for adults, and I too am a nazi about my sock (I have to have nike full calf black) but that is only because I have to wear black colored socks with my suit to work and I can’t stand the little thin silky feeling ones, they make my feet sweat and provide little protection/comfort with dress shoes. Anymore, white socks just seem like tighty whiteys… they are for kids. Non literally, that’s just what I think when I see them. No grown adult should ever wear tighty whiteys in my opinion.

        But anyway the socks I usually buy people are more like house socks. like slippers and socks put together. It really depends on the person tho, outdoor workers usually get thicker warmer socks.

        Btw- seeing how were talking about socks (weird I know) but anyhow “Ping” namebrand socks are probably the best I have ever had. Although someone told me they are golfers socks, I like the way they are really thick on the bottoms but not the top of the foot or the calf.

        You know, I never realized until now how people are particular about their socks. Still I always get compliments the year later. It’s like they didn’t realize how awesome of a gift socks are until they wear them. I don’t get quite the excitement as they are opened but later down the road they realize I knew what I was doing.

        I’ve try to buy gifts that people use everyday but don’t splurge on. Say if you know of an office worker who uses pens everyday but doesn’t have a nice one. Sure initially they may not think much of your nice ink pen but after they use it a while they will usually grow quite attached to it. Or hate it, one or the other.

        Sorry if I’m long winded today.

        • HRHKingFridayXX says:

          @snoop-blog: Haha! I always get pings for Mr. Friday, even though he rarely plays golf.

          I have a weird great aunt that always sends weird socks. Every year I donate them to a local womens shelter along with everything else I need to weed out of my closet. So, I guess some good can come of it.

    • DikembeMeiztombo says:

      @snoop-blog: Ooh. Good topic. I’d love good socks. I wear 2 pair at all times.

    • scarletvirtue says:

      @snoop-blog: I always “threaten” to buy people socks and underwear if I don’t get their Christmas lists.

      So far, no one has received socks (unless included on their list) or underwear.

      And I second the not having too many socks sentiment. Especially since they tend to get lost in the dryer.

  14. calquist says:

    I got an email from Ann Taylor saying that a spam email going around said they are closing stores and not to buy gift cards. Ann Taylor says that this is not true and gift cards from their store are the perfect gift.

    • amuro98 says:

      @calquist: Sounds like a flismy excuse to spam you. “Hi, we’re spamming you to say that that spam that we’re going out of business (which we probably sent out as well) was false, oh BTW, have you considered our gift cards this holiday? Blah blah blah.”

  15. yourbffjill says:

    I thought it was great when I got one of those Visa gift cards (although don’t you have to pay a few dollars to buy one for someone? if so, that’s lame). Anyway they are kind of a hassle to redeem so I blew the entire thing on one grocery trip and then considered the $75 I saved to be as good as cash for a few things I wanted over the next few weeks.

    Although gift cards are viewed as unimaginative by some, I prefer to both give and receive them. Every year my boyfriend’s family buys me books and CDs from Amazon for full price when I’d do just fine with the cheaper used version. I’m grateful of course, but I make the money go a little further when it’s in the form of a gift card.

    • HRHKingFridayXX says:

      @yourbffjill: In the same vein, I can usually find something for less during a pre-holiday sale. Its no coincidence that gift card heavy stores like bath and body works and best buy hold *zero* sales after the holiday season.

    • Baronzemo says:

      @yourbffjill:
      yourbffjill, actually Simon Malls(thy bought all the “Mills” Malls 5 months ago) sells those Visa gift cards at a cost of $2 for the card itself, billing it against it after a year. That’s the best deal I’ve found on those things;
      [www.simon.com]

    • happysquid says:

      @yourbffjill: The visa ones are not easy to use… you need a special redemption number that is on the receipt to activate it, and we were not presented with that. unfortunately. :( so I still have a $50 visa giftcard kicking around somewhere.

  16. Outrun1986 says:

    Not scared to buy them because of retailers going under, but because the card machines that read the cards tend to go down on the day you go to use the card and they can’t buy anything since there is no way to get the money off the card without scanning it through the reader. This tends to happen most around the holiday season. Yet if they had cash they could bypass this whole system and buy exactly what they wanted where they wanted.

    I have posted and posted about this on here, last year Toys R Us’s gift card reading machines went down on Dec. 26th. Talk about a bunch of disappointed kids and angry parents and gift givers. After hearing about that debacle I will never give another gift card. Kids love cold hard cash better than gift cards anyways, at least from my personal experience.

    • Marshfield says:

      @Outrun1986: I remember about 10 yrs ago TRU had “Geoffrey Dollars” that were their form of gift cards at the time. Those at least didn’t require scanning.

    • amuro98 says:

      @Outrun1986: Ugh, that happened to me one time at Borders. I had a Borders gift card and I couldn’t use it because the computer that handled those transactions was located across the country and was offline due to a thunderstorm. So I left the stack of books at the counter and walked out.

  17. vvvinny says:

    Anyone got a list of financially secure companies?

  18. starrion says:

    Cash.

    Works at any store.

    Dead presidents for the WIN!

  19. psyop63b says:

    Retailers must be freaking out that in 2009 they won’t get to hold onto their billions of dollars in ill-gotten, unredeemed giftcard money.

  20. corinthos says:

    I hate gift cards I usually sell them for a couple bucks less than they are worth. Especially hate it when its a store I never go to like blockbuster. I have netflix, ended up buying 50 dollars worth of overpriced movies.
    I miss the days when they were certifcates and you could buy a pack of gum and get your money back.

  21. arcticJKL says:

    I wont use gift cards until they work like gift certificates do in California.

    You can walk in to a store and cash the gift certificates in.

  22. lostalaska says:

    It’s not so much that I’m afraid to buy gift cards as I’d rather just give cash at that point and leave the option of how it’s spent up to the recipient.

    Plus, the last time I checked cash doesn’t expire or require you to buy 2x it’s worth to use it.

    Scared… not really, I’ve only ever bought one gift card (of sorts) and it was a 6 month subscription for World of Warcraft for a friends birthday because he didn’t have a credit card.

  23. Ein2015 says:

    I see no point buying gift cards unless they’re worth more than the money I pay for them.

    For example: if $20 purchased a $25 gift-card, I’d probably get them more often.

  24. MooseOfReason says:

    I like the Amex gift cards, and Amazon.com gift certificates.

  25. B says:

    I’m not sure how to vote. I’m not scared that the company I buy a gift card from will go bankrupt, but I am scared of getting hit by hidden fees. So I vote yes.

    • NTC-Brendan says:

      @B:
      Right there with ya B. Am I worried about Kohl’s/Nordstom’s/etc. going away? Not really. Do I hate fees and expiration dates that would not apply with cash? You bet!

      For a recent occasion I bought someone a mall-wide gift card (coin actually) to one of our nicer local malls (North Park Center). This came with no fees or charges and is able to be used at any store in the mall. Great for the mall (keep dollars in the mall) and great for us (No fees).

  26. Starfury says:

    I’m asking for cash this year. There isn’t anything I want/need that doesn’t classify as “junk/dust collector” so I’ll put the money aside to build a new PC next year sometime.

  27. Angryrider says:

    …the only Gift Card I wanna see is an Amex giftcard.
    I’d rather you give me cash, or at least a money order.

  28. Sorentso says:

    I stopped using gift cards a few years ago. I would rather give cash then go out of my way to bu a gift card. It’s an extra step that isn’t needed.

  29. edosan says:

    Scared, no. I am convinced they’re a ripoff though.

  30. moore850 says:

    It deserves to be said as often as possible: gift cards are money that’s not good except for at certain locations… regular money is good everywhere and free to give out, and it will more or less always work.

  31. krispykrink says:

    Afraid? No. But I only give them to a very select few people. Any gift of value I only give to immediate family and my best friend’s kids, everybody else gets a normal greeting card for Christmas.

    My terms for giving out a gift card are simple. 1) Person must request that I not give a gift and instead a gift card. This is usually only my girlfriend since she has a very specific item in mind and makes that request to everyone in her family so she can combine them and get a new computer. 2) I only give Amazon, Apple and iTunes gift cards, since they don’t expire (against CA law) and don’t have any fees associated with them.

  32. the lesser of two weevils says:

    I recently found a Best Buy gift card Id gotten the previous Christmas in a junk drawer. Checked and it had $80 on it. Damed if I didnt go out and spend it all that very day.

  33. Grrrrrrr, now with two buns made of bacon. says:

    There are lots of reasons NOT to buy gift-cards.

    Gift cards are nice little no-interest loans to companies if not redeemed right away…and in return, the consumer gets scammed for fees and charges! There is, of course, always the possibility that a company won’t be around or it will be in bankruptcy by the time one goes to redeem it.

    I’d rather have or give cash, or a gift-card to my local Market-Basket (’cause in this economy, eating is better than another sweater or matching bath towels).

    There seems to be this stigma that cash is a tacky gift. If, for some reason, anyone feels that way and would like to forward their tacky unwanted gift-cash to me, I’d be happy to give it a good home.

  34. Ajh says:

    I put money in a card and wrote in there, “This would have been a gift card for the bookstore, but I thought you’d like to choose how you spend it instead.”

  35. Jesse in Japan says:

    They have these really great gift cards that you can use at practically any store in America. They’re made using the finest quality paper made out of cotton and have pictures of dead presidents and Founding Fathers on them. Plus, they never expire.

  36. kwsventures says:

    Cash only. Not gift cards. No credit cards. Cash only.

  37. Bog says:

    Not afraid. Just annoyed. Gift cards kinda’ suck.

  38. STrRedWolf says:

    Apple iTunes store cards are still good. They’re in no debt and have millions in the bank, according to their last fiscal statements that they conveniently podcast.

    So? Give an iPod and some free music!

  39. humphrmi says:

    I join others. No fear. Just loathing. I still voted yes.

  40. mbz32190 says:

    I would be cautious about buying cards from smaller chains…especially with the shaky economy. I would have no problems buying gift cards to Wal-Mart, a gas station, or a major grocery chain, but other than that, nothing is looking real stable right now.

  41. graceless says:

    Why not just give cash? Go to the bank, get really crisp bills, and put them in a card. Geez, people.

  42. Barney_The Plug_ Frank says:

    The gift cards are a good deal if you purchase them at a grocery store that offers gas perks w/ purchase of food, like Giant Eagle. If you know you want go out to a certain restaurant, “free” gas perks may make it a good deal.

  43. Telekinesis123 says:

    @APFPilot:

    Exactly Circut City had 60 million in unsecured debt (gift cards) when it went under; basically everyone was screwed.

  44. whorfin says:

    I’d rather give a potentially useless gift than a gift card. At least that way, the recipient can get cash out with one step, rather than two.

    And for the nieces/nephews, greenbacks rule.

  45. Gilbert Tang, Jr. says:

    The poll neglects to cater to those of us who aren’t scared but simply don’t buy them because they’re ridiculous from not only the horrible gift standpoint, but, perhaps more importantly, from the free loan standpoint as well.

  46. majortom1029 says:

    how are those visa gift cards. Not the specific store ones but the ones that can be used as credit cards and can be refilled?

  47. Anonymous says:

    A great alternative to store gift cards are Visa gift cards. You can get them in most malls at the information desk. They do have a small surcharge but the card is a Visa card that can be used anywhere.

    • econobiker says:

      @QitarahKane: They can be a pain in the butt as you can’t spend them on items valued at more than the card without an understanding saleclerks intervention and a store system that will allow it. If you try to buy a $65 item and give a visa for $25 it will reject as not working since it doesn’t have $65 on it. You either have to pay the $40 first and then the $25 visa card or have a clerk who can process the transaction in separate chunks as long as the stores system will allow it. It kind of freaks some systems out to try and process more than one card transaction on the same sale.

      We had a $50 visa gift card which was issued by a bank as a premium for signing up for an account. We tried to use it as part of a computer purchase at a big box electronics store (Circuit City) and it rejected since we tried to use it first. We already had a gift card from the store due to a flat screen tv I had won and returned. This all confused the sales clerk. We ended up using the $50 visa somewhere else. (Conversely we had a $100 Amex gift card from someone and I used it at a local auto garage by telling the lady to run it separately from my personal debit card. She had no problem doing that.)

      This same issue is why we now have a couple of visa gift cards with less than $1 on them which we have to buy small packs gum with at a self serve register sometime soon…

  48. Meathamper says:

    I’ve got a couple of $25 iTunes gift cards I got for free, which I would have never bought myself. I’m selling them to my friends who don’t have credit cards (didn’t have the heart to tell them about Green Dot cards).

    • econobiker says:

      @I work as a meth lab technician: In my opinion the Itunes gift cards are a scam as you cannot buy email gift certificates to Itunes without being signed up on their system (and downloading their software, etc). My wife tried to buy an emailable I-tunes certificate for her grandnephew and ran up into this.

      She had to go to a store and buy the gift cards and ~*snail*~ mail them to him. The Apple/Itunes store help was totally worthless in regards to explaining this problem. Just because I don’t want Itunes doesn’t mean we don’t like high tech. In the end Itunes lost because she was ready to burn $50 on the gift and ended up getting two $15 because of the hassle plus mailing.

      Thanks, Apple, for being so NOT “green” and environmentally conscious…

    • jamar0303 says:

      @I work as a meth lab technician: Additionally, iTunes gift cards don’t carry over across countries. I prefer to buy from the Japanese store and thus when people give me US iTunes gift cards it’s worthless to me.

  49. quail says:

    Giving a gift card is like giving someone a chore. Here, take this and go spend some hours at the mall trying to find something you want. At least cash can be spent on paying down debt or put towards a vacation fund.

  50. NORMLgirl says:

    I do not recommend purchasing gift cards for restaurants or home depot at Wal Mart. A friend recently purchased 3 Chilis gift cards at Wal Mart and only 1 of them worked! She fortunately got a refund but the manager at Wal Mart said not to purchase them there any more. Apparently it had happened before.

    The only reason she found out is because one of the 3 people she had given them to told her. The second person wasn’t going to say anything. How embarrassing.

  51. CumaeanSibyl says:

    There’s a much simpler reason not to use gift cards: if you buy a sweater or socks or a DVD, it’s not as obvious how much money you spent for the present. With a gift card, they know exactly how much you spent, and can judge your gift accordingly.

    Case in point: I have an Old Navy credit card, so I get reward points, and I also get special coupons. This year I bought sweaters for a bunch of people on my list, with a 30% off coupon and a $10 reward certificate, plus the in-store sale already going on. Means I spent a whole lot less than face value on those sweaters, and no one’s got to be the wiser.

    It’s just a matter of smart shopping. I’m not at all paranoid about gift cards, but they’re about the worst idea possible because you can’t stretch your money that way.

  52. kpetree10 says:

    I always ask for cash, everything I want cost more than any one person could get for me. Plus I can use cash to pay my bills, I can’t mail Lexus or Dell a Best Buy card now can I?

    Apple is the only place I would take a gift card from because I’m planning on buying a Mac Pro.

  53. SWBLOOPERS says:

    Speaking strictly for myself, unless it’s a card I know will be used right away — within a month — I won’t buy a gift card for any reason. Period.

  54. j-o-h-n says:

    I like Lowe’s gift cards — they were giving you a free $20 one with every $100 one you bought — of course they only stayed in my hand for a few minutes before I turned right around and bought a range with them. Plus I had $35 in coupons. And 12-months interest free too. Oh, and free delivery, hookup, and hauling the old one away. I think they might be looking pretty hard to make sales…

  55. austinchu says:

    Gift cards have definitely received their fair share of criticism. In my opinion, they should have received more in the past. I think the whole gift card industry should have examined themselves a bit more closely. Companies should have been regulated, and consumers should have been educated. The question is, how much should we know about gift cards? There seems to be more laws that protect retailers than mortgages protecting lenders. Something is wrong here. The funny thing is, I work for a company that manages and tracks gift cards. We also have reseller agreements with these bankrupt retailers. We have lost thousands of dollars in inventory. We get the same amount of warning as everyone else does. In fact, I learn about it, reading the consumerist. When we learned that signature days, and sharper image filed for BK, they wouldn’t buy the cards back from us. We wanted gift card protection for ourselves. Some of our own customers were holding bankrupt retailers gift cards– which they purchased from us. We decided to allow those customers to exchange cards that were purchased from leveragecard.com for another gift card. With that said, if you hate gift cards, give cash. If you still love gift cards and you STILL really want to give them, buy them from us, and you’ll be protected. A sense of security can go a long way.

  56. ELC says:

    Gift Cards – the gift to give when you are just checking off names!

  57. sponica says:

    I LOVE gift cards. I use them when I need to go shopping, so they sit in my wallet unused for about 3 to 4 months until I use them. I had a stockpile of 300 dollars to Ann Taylor that I used to buy clearance items for clothing to wear at my job when I started.

    I just rediscovered my Eddie Bauer gift card and used it to pay for some christmas shopping. Yeah, I know, silly…but it saved me moolah.

  58. synergy says:

    I think gift cards are the stupidest things on earth. It makes people feel better about not having a real clue what to get someone without the whole “crassness” of just sticking bills in a greeting card. If someone is just going to give me money I’d rather they didn’t limit what I can do with it by giving it to me in a form where I can only use it in one place.

  59. Anonymous says:

    Back when I used iTunes, I thought it would be a good idea to get gift cards for everyone on my list….$200 worth total. Somewhere between buying them and handing them out, I lost the bag that contained them….ALL of them. After numerous calls to Apple (with unnecessarily rude CSR’s) and going back to the store where I bought them, I was told I could not get replacement cards. I had receipts, but no dice. After that, I have refused to buy gift cards for any store.

  60. Anonymous says:

    As a leader in the space, we at Blackhawk Network (largest third party distributor of gift cards and creator of Gift Card Mall) want to set the record straight. Gift cards will continue to be the preferred gift this holiday. In our study, over 70% feel that gift cards are a useful gift since the recipient can get what he/she wants and 58% of consumers still plan on buying gift cards this season. Deloitte’s Holiday Survey also found for the fifth straight year that gift cards are expected to be the top gift purchase. Regardless of the state of the economy, they provide benefits such as convenience, personal budgeting and fraud protection when buying online. In addition, the reports of the vast amount of retailers not accepting gift cards has been completely overstated and not true. They want to keep their customers during this crucial financial time.
    Thanks.