The Pros and Cons of Gift Cards

*Originally published on 5/18/10




You'd be hard pressed to find a store that doesn't offer gift cards. Electronics stores, book stores, even grocery stores and restaurants all offer gift cards. If you have a family member who is hard to shop for, they make for a quick and convenient shopping experience. The question becomes how well do they work as gifts? They have proven popular so there is some merit to the idea, but there is also some criticism about how well they work as gifts.

The major criticism is that they are a bit impersonal, akin to giving cash to someone as a present. One episode of the old Dilbert animated series had a scene where Dilbert was having trouble coming up with a gift idea for a relative. A coworker suggests gift cards and explains the concept. He comments that they are actually worse than cash since the receiver is limited to using the card at just the one store as opposed to having free reign.

As someone who has received both money and gift cards as gifts, I have to lean in favor of gift cards. Cash and checks are nice, don't get me wrong, but a gift card feels more like you're getting something for free when you buy it. You could argue that the item you purchased is still paid with money given from the person, but when you deposit or cash the check, it's easy to consider it as another deposit. With gift cards, you don't end up handing any cash over unless the item's price is greater than the balance on the card.

Another perk of the gift card is that, depending on how much is on it, you can put it to use multiple times. A lot of times, when I get a gift card, I'll purposely try to leave about ten dollars on it to save for the next trip to the store so that I can get a discount on a later purchase.

Still, there is some merit to the "impersonal" argument. The whole idea of gifts is that there is thought behind it and gift cards don't require a lot of thought.

If you are planning to give someone a gift card as a gift, try to think what would most please the person who will be receiving the card. "Warehouse" style stores like Best Buy and Wal-mart gift cards are great as they offer quite a bit of versatility. With the wide selection of products available, a person would be hard pressed not to find something to buy with the card.

If the receiver is a big online shopper, a lot of stores allow gift cards to be used for online purchases as well. If you want to play it safe, you can always get the person an Amazon gift card. As that site sells dang near everything, the only problem will be that the person won't know what to spend the card on as there are so many options presented before him. I can also attest first hand that browsing Amazon and picking up an item or two knowing that it won't show up on your credit card statement later is a great experience. As Amazon prices tend to be cheaper, that also allows the receiver to, as the old saying goes, get more bang for his or her buck.

If you are aware of a person's hobby, but aren't aware of the receiver's inventory, a gift card is a great option. Going back to the Best Buy example, a movie buff will often have a sizable library and it's difficult for relatives in other areas to be aware of what is and isn't in the person's collection. A gift card will allow the person to browse the shelves and pick out a product that he or she knows is something new to them.

Gift cards are great if you live far away from the person in question. It's true that buying the gift online allows you to ship it to them, but gift cards allow you to send a card and just slip the gift card inside and ship it off in the envelope. It reduces the postal service's workload, it's quicker and it minimizes the chance of some complication in transport.

At the end of the day, gift cards make good gifts, but not great ones. If you really are at a loss as to what to get the person, you can get them one. On the other hand, you could just as easily ask the person if you don't know what to get them. They have their downsides, but they are also a great convenience and offer the receiver a chance to splurge on something they may have had to put off buying for some time.