NPR: Christmas Gift Cards a Bad Deal for Consumers?

Christmas Gift Cards a Bad Deal for Consumers?

Ah, gift cards ... Just thinking of them brings back all the happy Christmas memories I have of being too lazy to think about that really personal gift I could get someone close to me, panicking at the last second and buying a nice, shiny gift card instead. And I know I'm not the only one. The National Retail Federation predicts that there will be a 6 percent increase in gift card sales this holiday season, meaning that shoppers will spend about $26.3 billion on them.

The Chicago Tribune actually describes that as a "sober 6 percent" because gift card sales went up by a whopping 34 percent last year. However, Consumer Reports' executive editor also says more people are complaining to his magazine about the cards, concerned about lost cards and expiration dates.

This week, Consumer Reports launched a public education campaign aimed at warning shoppers about gift card pitfalls. It started with a full-page ad in The New York Times that read: "Dear Shopper, Last year, shoppers like you were out $8 billion because of unused, lost, or expired gift cards. Easy money for retailers. Lost money for you. Yours truly, Consumer Reports."

The consumer advocacy group's research shows 27 percent of people who received gift cards last year haven't used them yet, the Detroit Free Press reports. And all that unspent money can really pile up: After last year's holiday season, Nordstrom recorded $8 million in income from gift cards unused for five years or more.

The rules on how long you have to use a gift card vary from store to store and state to state. (Here's a chart that details the rules in each state.) Consumer Reports advises using gift cards quickly if you get them.

So does knowing that a sizable number of people never actually use their gift cards change your mind about buying them?

10:07 AM ET | 11-14-2007 | permalink

Comments (Send a comment)

It is great news for the environment and economy that gift cards aren't being used. People are buying less junk that takes energy and resources to produce and ship, and less stuff ends up in the land fills ultimately (except the gift card itself, of course - but it is small relatively speaking).

For companies, this is practically pure profit and thereby good for the economy overall.

Sent by Edward P. Gackston, III | 11:48 AM ET | 11-14-2007

It seems the retailers are going to profit no natter what. As gift-givers, we can do our very best to get our loved ones things that they will like, but it is sort of out of our hands beyond the actual exchange, and while it is unfortunate that $8 million will go to waste because people don't cash in their gifts cards on time, it won't stop me from giving them. At least it gives the recipient a choice in the matter, and we were going to spend the money anyway. Because conversely, I think we have all been in the situation of receiving physical gifts that end up in the garage or Goodwill and go unused by us in the same way. I have received some truly hideous clothing and jewelry from relatives, and while they are well-intended and thoughtful, they are wasted on me. Gift cards can be seen as having not much thought put into their purchase, but I would argue that it is respectful of unique and unpredictable tastes -- or at least that's how I can defend it when I'm scrambling on Christmas Eve.

Sent by Marin | 11:55 AM ET | 11-14-2007

I think that it is the sign of an apathetic lifestyle to give gift cards as presents. Certainly there are individuals who are incredibly, and unfairly hard to shop for, but even then you can share something awesome with them.

For instance. Rather than a $20 dollar gift card, give someone the gift of Mike Judge's "Idiocracy" on DVD. You'll also be doing your society a service.

Sent by Jody Sol | 1:07 PM ET | 11-14-2007

I am usually a person who believes in moving forward, however, at this time, moving backwards may be the thing to do. Back to when the holidays were celebrated more simply. What with the recalls on toys and goods made in China and the "lost" money spent on gift cards, perhaps its time to buy a loved one or friend a good book to read or cook or bake them a special food that they enjoy. Too "old fashion" for you? (I told you I was thinking backwards). What about a donation to a favorite charity in the name of your loved one or friend? This surely sounds like the ultimate gift at this time of year since we have an over-abundance of everything. Some thoughts to ponder.

Sent by Diane Palma | 1:21 PM ET | 11-14-2007

For the people that have unused, lost gift cards, thank you! I now know just how much my gift to you really mattered to anyway. (I'm glad I didn't get you that ????, you asked for.)

I used to think, "Give the store my money now, so YOU can decide latter (if ever) what you want" was a bad idea. I now see it differently.

Sent by Harold | 2:19 PM ET | 11-14-2007

I used to be one of those people who bought into the whole give gift cards because cash/checks is tacky. That is until I read the fine print.

Unless the person you are giving the gift to is irresponsible to the point that you must direct where they spend such a present and you really must give to them, give cash. It doesn't expire, there are no service charges and it can be spent everywhere.

Sent by liz | 3:28 PM ET | 11-14-2007

Gift card rules are almost as bad as air mileage rules. None of this is designed to serve people only corporations. Never buy Aveda gift cards. They are the absolute worst!

Sent by G | 11:34 AM ET | 11-17-2007

Gift Cards received for the same store from different friends allow someone to buy a larger needed or desired item in place of several smaller appreciated but not needed items. On the down side, one must choose carefully as we once received a gift card for a restaurant with a great brunch reputation and it went out of business shortly after Christmas!

Sent by J Brinson | 9:28 AM ET | 12-06-2007

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