Gift Cards, Use ‘Em Or Lose ‘Em?

Gift card scare
Gift card scare

Gift cards are almost the perfect gift.  You get to set your own limit, you don’t have to spent an endless amount of time looking for the right thing, no one has to be disappointed in what they get because they can get whatever they want.  You actually did go out and get something.  Seems like a win-win situation, everybody is happy.  The popularity of gift cards usually increases as the holiday season comes around, but this year their popularity is being called into question.  A new issue has arisen that is making people rethink their gift card buying ideas because of recent economic times. 

A recent email has been circulating to people around American warning them about buying and receiving gift cards this holiday season.  The email alerts people that due to our country’s recently economic downfall, some of our more popular stores could be going out of business after the holidays.  And if you’re one of those who would normally buy a gift card or be in the receiving end, be careful because if you do not use the gift card in a timely fashion, you won’t be able to after these stores close their doors for good.  Also, this email is listing some big name stores to scare up more consumer fear.  Among the stores mentioned as possible casualties in our economic recession are Home Depot, Ann Taylor, the Gap, Talbots. 

The bad news is, this email does have some truth to it.  As much as it may seem like it, gift cards aren’t cold hard cash.  They usually come with an expiration date, but the date isn’t the only thing you have to worry about expiring, nowadays you have to worry about the store expiring as well.  For example, electronics store Sharper Image went out of business earlier this year.  Many people with gift cards who did not get there in time before they closed down, lost the value on their cards.  Gift cards usually require you to use the cards where they are acquired.  And those stores usually would like it done in a timely fashion.  They are essentially a cash loan taken out from the store.  They cannot count that amount as profit until it is redeemed or expired.  The unfortunate thing for us is that type of loss accounts for $8 billion of gain for retailers.

The good news though, most of the business the email scare names have nothing to worry about.  Of course there are some names you should be concerned with, such as Circuit City and the recent bankruptcy they announced.  But similar to how their troubles have been widely reported, any other noteworthy store that would fear problems due to recession we’ll likely to hear about it in ample enough time to get off our gift cards so that they won’t burn a hole in our wallets.

Not for nothin’, but if you want to be wise about it, don’t be lazy about it.  If you want to give someone a gift so bad, would there be much trouble in actually find something he or she likes?  I’m not saying gift cards aren’t warranted and are the easy way out, but just be careful with chain emails.  And if all else fails, feel free to check with the store.

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