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Lansing's Advice Column

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Dear IMO,

For Christmas this year my wife and I are going to buy gift cards for the children and grandchildren.  It’s a change from previous years where we normally went out and bought gifts for everyone. Though we were able to exchange most of the gifts in person, we had to mail some of them out of state.  It is a real challenge trying to figure out what people want/need, sizes, colors, brand names, and all the rest.  We like to see a tree that has lots of presents under it, but it can be quite a hassle to purchase, wrap, and present the whole family with presents.  And that doesn’t take into account the disappointments with what was in the package.  What’s your take on gift cards?  Is it the easy way out? 

Bill

Dear Bill,

Each year shoppers across this great land of ours buy billions of dollars in gift cards during the Christmas season.  It is estimated that this year shoppers will buy nearly $25 billion in gift cards.  Yes, 25 billion dollars! The gift card is a great idea.  It takes all the pressure off you and your wife, and allows the recipients to get what they really like.  In some cases, they actually purchase something they need or have wanted for a very long time, but have had some reservation about buying it.

Overall, it can be fun to get them but there are some problems.  Most of us open the cards, express our joy and gladness for the gift card, and then stash them in our dresser drawers, envelopes, or in secret compartments in our wallets.  There they remain for all eternity or until someone steals our wallet and becomes the beneficiary of those unused cards along with the cash and credit cards.   

In 2006, stores reported over 8 billion dollars in unused gift cards.  Best Buy Company alone reported a record $43 million gain in fiscal 2006 from unused gift cards from the previous two years.  That’s quite a profit for them and a real loss for us. 

There is good news as some gift cards get spent faster than others.  Supermarkets and gas stations have close to 100 per cent redemption rates.   So if you want to see your cards put to good use, you might want to diversify your gift cards by giving each family member a practical one that can be used for food or gas and a fun one geared toward the less than practical.   Perhaps you can all get together in the summer and have a “show-n-tell” where each family member shows what they purchased with their gift card.  This will guarantee that everyone will have used their cards, almost.    

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