Gift Cards: 10 Buying Tips for Considerate and Safe Shopping
Gift cards, especially digital ones, are popular for gift-giving because they are convenient, flexible, and can be purchased and given instantly (in the case of digital e-gift cards).
Gift cards have a recent history in their popularity, born from paper gift certificates. According to Smithsonian Magazine, “Neiman Marcus was the first to sell {gift} cards, but they didn’t advertise and display them. It was Blockbuster who first displayed the gift card in its stores, (apparently due to rampant counterfeiting of their paper gift certificates). The next big gift card seller was Starbucks, who in 2001 introduced cards that worked more than once.”
While sales of both plastic and digital gift cards continue to rise year over year, it’s worth noting that only 14% of Americans prefer receiving gift cards over something more personal, according to research by Vistaprint & Statista. A study by DealDrop reports gift cards are still among the three most wished-for holiday gifts in the US behind good old cash (32%) or a surprise gift (32%). While there are indeed reasons not to purchase gift cards, their popularity and convenience benefits are irrefutable, largely because of the convenience for the gift-giver.
Here are some considerate and safe buying tips when shopping for gift cards, whether the occasion is Christmas, Hanukkah, Birthday, Mother’s Day, or “just because”.
Be aware of the risks and purchase considerations for your recipient, as well as for yourself. Retailers love having that upfront money in their pockets with no guarantee the recipient will cash in - only half of gift cards are ever used. Also, gift cards are fodder for scams; since 2018, Americans have lost close to $245 million on gift card scams. Is this how you want your hard-earned dollars spent? Would cash or a Venmo be a more appropriate gift instead?
Consider the recipient’s needs more than wants. Practical gift cards from gas stations, grocery stores, and big-box discount stores like Target and Amazon are the most likely to be needed and used the quickest.
Do some research before buying American Express, Visa, and MasterCard gift cards. Many of these charge fees to use the card and require registrations for activation, even though the recipient will not be purchasing anything at their website. For example: the U.S. Bank Visa gift card requires recipients to enter their name, address, phone, email, opt in to texts, and to set up an account with their bank website just to activate the card! This is a sneaky marketing ploy to harvest and market their future products and services to your loved one. Then, they charge a $3.95 fee just to activate the card, rendering the gift card less than the face value of the gift.
Buy gift cards from trustworthy sources like a major retailer, a major retailer’s website, or the store or website of the retailer for whom you are purchasing the gift card. It's safest to buy from stores that keep gift cards behind the counter or in well-sealed packaging if they are out on racks (like in the grocery store). Watch for PIN security strips to be intact.
If you do want to roll the dice on a secondhand marketplace gift card purchase, check out this article for vetted gift card selling sites. Buying gift cards off eBay or online marketplaces like Facebook or Craigslist for large amounts of cash should be avoided because there are no guarantees the card is valid for the amount the seller claims, or that you will be safe making the purchase.
Consider the health of the gift card retailer (the store the card is for). Has the retailer been closing locations left and right or filed for bankruptcy? And while it’s nice to support local and smaller retailers, will this store or restaurant be around long enough for the gift recipients to cash in on their gift card?
Do read the fine print. Is there an expiration date on the gift card? It should be at least 5 years per the CARD Act of 2009. Check to see if there are fees each time the card is used, such as monthly maintenance or service fees, balance inquiry fees, transaction-based fees, reload fees, or ATM fees.
Include the receipt with the gift card, in case it’s lost or stolen. Before you leave the store, check the gift card receipt to make sure the amount added to the card and what you paid is correct.
Look for bonus gift card values or discount pricing specials, but only if you feel the retailer is a good fit for your gift recipient. Panera and Target notably discount their gift cards several times per year, with offers like “20% off gift cards” or “Buy a $50 gift card get a $10 gift card free” offers.
Consider a digital e-gift card as it’s easier for the recipient to add to a smartphone wallet, it won’t get lost or stolen in the mail, and it’s kinder to the environment than the PVC and plastic gift cards that end up in our landfills and sit for decades.
These 10 tips should help you be a safe and savvy gift card buyer to ensure your gift recipient is happy with your gift. If you would like more specific information on how retailer gift cards stack up, check out this article on WalletHub.
