The Gift, of Gift Cards?

Greetings! 

As the holiday season approaches, I know many of us are seeking convenient (read: last minute) gifts for our loved ones. Gift cards often emerge as a popular solution, offering recipients the flexibility to choose what they truly desire. However, I wanted to draw our collective attention to a few significant drawbacks to purchasing gift cards. 

1) Unredeemed Balances: A Growing Concern 

A substantial portion of gift cards go unused each year, leading to significant financial waste. Recent reports indicate that Americans are holding approximately $27 billion in unused gift cards, averaging $244 per person. This figure has risen from previous years, highlighting a growing issue. The amount of gift cards I have in my drawer that have about $2.68 on them and will officially never be used…yep…point made. 

2) Retailer Bankruptcies: The Risk of Worthless Cards 

Although certainly not a massive risk with many popular retailers, the consumer landscape is and always will be unpredictable, and the unfortunate reality is that some retailers may face financial difficulties or even bankruptcy. In such cases, gift cards can become worthless, leaving recipients unable to redeem their value. For instance, when TGI Friday's faced bankruptcy, there was $50 million in unclaimed gift cards that potentially became valueless. And that’s why I prefer Chili’s…:) 

3) Expiration Dates and Fees: Diminishing Value Over Time 

While many jurisdictions have implemented regulations to protect consumers, some gift cards still come with expiration dates or inactivity fees that can erode their value over time. At the very least, read the fine print to make sure that this is a limitless card with no restrictions of hidden fees. 

4) Fraud and Scams: An Increasing Threat 

Finally, gift cards have become a target for fraudsters. Scams involving tampered cards or stolen codes are on the rise, leading to financial losses for unsuspecting consumers. The Federal Trade Commission reported $217 million lost to gift card fraud, underscoring the growing threat. (How many of us have gotten that email or message asking us if we could just go buy our boss an Apple gift card?) 

While gift cards may seem like a convenient option during the holiday season, just remember that first and foremost, the odds of our ever getting our “exact” dollar value are minimal at best. 

Wishing you all a joyful and relaxing holiday season, and truly appreciate your being here. Lots for which we can be grateful. 

Best, 

Tyler