In what seems to be an annual holiday event, Liz Pulliam Weston expresses her dislike of gift cards. This year though, there's cause for her celebration, as one study predicts that consumers will purchase $4 billion less in gift cards this year than they did last year. This is a decrease of over 4%.
After reading her list of reasons not to get gift cards, I'm becoming less of a fan of them myself (unless I can get them for free, of course). I didn't know, for example, that some retailers won't let you split purchases with gift cards. This means that if you have $3 left on your card, and the cheapest item in the store is $4, you're out of luck. That would tick me off royally. I don't think I'd shop there again if they pulled that.
Cash doesn't suffer from this problem. I mean, well, it does lose a little bit of value every day from inflation, but it doesn't expire, there aren't any fees associated with holding it, it's accepted pretty much everywhere, and can be spent (or not spent) for pretty much any reason.
Even if the gift of cash is used the typical way — for buying something the recipient wants — it encourages wise spending. It encourages post-holiday bargain hunting, shopping online, shopping eBay, shopping thrift stores, bidding at auctions, looking for deals on Craigslist. It puts a lot more power in the hands of the recipient than a gift card would.
Shopping for deals isn't the only way it can be used. It can buy necessities. It can be saved, or used to pay down debt. It can even be given away — regifted! — to someone less fortunate.
What's more, with only a small amount of effort, one can give a gift of cash that's fun. Dollar coins are fun to spend (at least I think they are). Two-dollar bills are great, especially if the recipient tries to spend them in Best Buy. Or put in just a little more effort and do some money origami.
Cash. It can be a tender gift, and it really fits the bill this holiday season.
Thanks to Well Heeled Blog for including this post in the Carnival of Personal Finance.
