Why I'll Never Be Suckered by Chrismtas Gift Cards or Store Gift Certificates Again

I've purchased gift cards before but I doubt I'll do so again, not after reading a recent report from Consumer Reports at www.consumerreports.org/cro/money/shopping/shopping-tips/gift-card-pitfalls-12-07/overview/gift-card-pitfalls-ov.htm

This report opened my eyes, especially after a frustrating personal experience. Last Christmas, my husband got a gift card for his favorite bookstore and never used it. Let me be clear - I don't blame anyone (well, maybe my husband) for this. He is a bit absent-minded and the kind friends who gave him that holiday gift card had no idea he'd never remember to use it. However, we were surprised to discover that the card lost value for every month it went unused. In less than a year, the card was worthless.

Before I read that recent study (link above), I thought my husband was that rare someone who was just too busy or forgetful to use a gift card. But according to Consumer Reports , there were eight billion dollars worth of unused gift cards in 2006! That's right: eight billion dollars.

Pretty shocking, isn't it? Imagine what could be done with eight billion dollars in terms of helping needy families and communities. Some of those extra dollars could even stay in your bank account. Amazingly, in spite of these facts, gift cards continue to remain popular.

But according to research at TowerGroup (www.towergroup.com/research/news/news.htm , the store owners and the bank card issuers are the ones who are getting the real Christmas presents in the form of your hard-earned dollars - and not giving you a single item of merchandise in return! You might as well just hand them the money and forget about getting the card. Think of it as a seasonal donation to your local merchant or bank card issuer. According to TowerGroup, one large retailer showed a $42 million dollar benefit to its income statement for unused cards! Yep, a $42 million dollar windfall.

Were you one of the many people who bought a gift card and thought they were essentially giving a cash gift for a recipient's favorite store? Last year, I certainly was and now I wonder how many of those cards never got used.