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Gift Cards - The Dark Truth

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Gift cards are not a new concept - it's been around for a very long time.  Undoubtedly, over the past you have received such a card or purchased one for a friend or relative.  Are you aware that you've been feeding the machine?  If not, read on :)
Every year it happens - at least twice per person.  You sit there, and contemplate what to buy a person for his or her birthday, or for Christmas.  "Ah!" you exclaim.  "I'll just get them a gift card, then they can buy whatever they want or need!"

Sound familiar?

While your intentions are all good, and the recipient of your gift will appreciate it all the same - you've just contributed for one of the biggest marketing scams of all time.  What you've just done, is given money to a business without them giving you a product in return.  Now that they have this money, they can do something with it - like invest it, or put it in a bank account where it can earn interest.  What potentially could also happen is that in a day, a month, or several months down the line, they are going to have to give a product to a person who presents this gift card to them.  But it won't be at a loss for the merchant.

What they're ACTUALLY banking on is for one of the following to happen:
 
  • You lose the card or
  • You spend less than the card is worth, and then allow it to expire or
  • You don't spend any money on it and allow it to expire.
In every one of these cases, the merchant wins.  We never win.

It is in fact the most ingenious idea ever thought up.  This is why everybody is doing it.

Don't get me wrong - I'm not saying you should not support gift cards - by all means, do.  Just consider who you are buying the gift card for, and how likely that person is going to use it.  For me, you can buy me a Nandos gift card any time - I can guarantee it will get used.  I love chicken.  I have had aunts buy me gift cards for stationery shops.  Why?  Because they weren't thinking!  I'm a computer nerd, I use a computer all the time.  When do I ever need to write?  I HAVE PENS for goodness sake!  That's good money just wasted because I didn't have a need for stationery when they gave me the card, and when I finally decided that I need to buy stationery - of course I don't have that gift card with me.  You're not going to see me obtain a wallet that can cope with 20 different cards "just in case" I need it.

If you're going to buy somebody a gift card, be sure that you know that there is a higher than average chance that they will use it.  I'm a computer nerd - so - how about an Amazon card?  Yes!  I'll use that thanks very much.  You can pretty much buy any computer part you want through there.  You've just bought the right gift.

Always read the fine print!  Some cards are only valid for 6 months.  Some for a year - and some can be even for longer.  Each company has their own set of terms and conditions, and they vary from "nice" to "horrible". You might find that some cards do not give change - and I don't mean that in the physical sense.  Before I continue, you should be aware that I've never seen a gift card that actually gives you real money in return.  I'm not saying that they don't exist - I've just not seen them.  As I was saying, some cards don't give change - so if for example you have a card for £20 (that's twenty pounds sterling for people who don't know what a £ is), and you only want an item that costs £14.99 - then you could be wasting some money.  Naturally, none of us like wasting money - so what do we do?  We buy TWO of them, and end up giving the company even MORE money!

What alternatives do you have?  Well, you could always give somebody hard currency.  What's wrong with that?  Don't you remember back when you were a kid and you got given £5 in an envelope that you could spend at the school tuck shop?  It made you jump for joy!  People always like money.  You probably think "what's the point, they're going to give me money back", but remember that Christmas is a time for giving.  You should be giving gifts to people and not expect anything in return.  I've also never had a situation where I've gifted money to somebody and they had by coincidence given me the same gift in return.

More alternatives?  Sure - donate to a good cause.  If you have a dotty aunt that loves cats and you want to give her more than just a cat calendar - then donate some money in their name to your local cattery.  "There we go Aunt Joan - we've given money to a cat house" and see the smile on their face when she realizes that it's being used for good cause.  Let's not forget all the starving children in the world - everybody loves kids.  Why not send off a huge donation to Unicef or a similar charity, and in your Christmas cards write "No presents this year - instead we donated £100 to XYZ charity".  I can guarantee you that won't get any scowling (except perhaps from your kids).

So to sum up... Gift cards aren't inherently evil - but know that they exist to try to make some other people richer and richer.  If you want to buy gift cards for people, KNOW the person you're buying it for, and be sure that the person has a high chance of using the card to its fullest.

Don't throw your money away.
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