Tuesday, 17 March 2009

Why I Buy Gift Cards

They show many reasons why not to buy gift cards including the following:

They expire - This is true in some states, but not in all states. In general, I haven't seen any expire before a super tremendously long length of time - like 7 years.
They are an interest free loan to the store - True, true. However, when I bought a coffee maker for my wife last year in November and left it wrapped up in a month, it amounted to nearly the same thing. The difference is the time from when you give the gift card to when it is used. In today's spending society, I tend to think that it isn't very long time.
The store gets the money for free if the card is lost - I think it's your responsibility to not lose the gift card. Treat it like you would cash. You wouldn't get a refund from Uncle Sam if you lose that would you?
Fees? - Jim even says that stores charge fees. I have yet to experience this, so maybe I'm lucky. If I ever did, I'd probably change my mind completely about gift cards. However, first I would grab a huge stack of store fliers or credit card applications, make them into confetti, and proceed to help the store celebrate it's wonderful policy.
Despite all these wonderful reasons, I still buy gift cards. I have three main reasons for doing so:

Etiquette - Though Jim proposes that we do as the Chinese do and give money, we aren't there in the United States yet. My wife and I prefer money and many people got us cash as a wedding gift. Yet friends of our parents tended to get us gift cards or buy off the registry.
People Receive Gifts they Want - Building on the above etiquette reason, if money isn't an option, a gift card is the next best thing. How many times have you received a bad gift and thought, I'd rather have a gift card to anywhere else? This has happened to me about 6,392 times.
(I Believe) I Save Money - If you followed all those weak reasons above and are still reading, you shall be rewarded. I have a credit card that gives me 5% cash back at all grocery stores, pharmacies, and gas stations. I can buy a gift card for Best Buy, Olive Garden, iTunes for $100 and get $5 back in rewards. Since my credit card doesn't break the rewards down by transaction, I can't really see if I'm earning rewards in this way. However, I believe that the credit card company just sees that I spent $X at Safeway/CVS/Walgreens and not that I spent it on a gift card for another place.
I hope that Jim's proposal catches on in the United States. It may just be a matter time. In a ten years we may look back and think that gift cards where just an interim step.


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