Everyone loves receiving and giving gift cards for special occasions. They reduce the stress of worrying if the recipient will like the jeans or shirt you bought them. They eliminate the fake smile and “I could always use a new pair of jeans” routine from the person receiving the gift. However, be aware of the risks and hidden costs when using your gift card.

Consumer benefits

Gift cards are becoming more popular every year. There are generally three different types of cards: business gift cards, restaurant gift cards, and general purpose gift cards. Store-specific gift cards are intended for in-store use and typically come with fewer hidden fees. Some stores like Old Navy and Banana Republic have become partners and allow their customers to use the gift card at both stores. Restaurant gift cards are very similar to business specific gift cards. steam gift cards They allow you to enjoy a nice dinner as a gift. Just make sure you tip the server the same percentage as if you were paying the entire bill. General purpose gift cards offer the consumer a wider range of uses for the card. These types of cards are usually Visa, MasterCard or American Express and can be used anywhere these major credit cards are accepted. Flexibility is the main benefit of using the multipurpose card. You can fill up your tank, go out to eat, buy concert tickets or whatever else you want to do with it.

Consumer cons

Many general purpose cards have fees attached to them. According to the article The Lowdown on Gift Cards on Bankrate.com, some gift card programs will issue you another card when your card expires. These replacement cards range from $5.95 to $10. If you order the card online or by phone, you will be charged a shipping and handling fee of $4.95 to $8.95 and a service fee of $3.95 to $11.95. Some gift cards will charge you a monthly maintenance fee if you have any balance left on your card after six months or a year. If you have any remaining balance after this period, a monthly fee of $2-$3 will be charged.

If your gift card is lost or stolen, good luck! Some retailers will not replace a missing gift card. Other retailers like Macy’s and Bloomingdales are more relaxed and will issue you a new card if you can show a receipt for your most recent purchase. Some general purpose cards will cancel the missing card and issue a new one for a fee of $5.95 to $10.

So make sure you keep your card in a safe place, use it before it expires, and buy direct from the merchandiser and you’ll avoid most of those fees.

Retailers

Gift card sales in the United States have exploded from $1 billion in 1995 to an estimated $70 billion in 2006, according to the Retailers Just Love Them article on CBC News Online. As of 2004, 68 percent of all major retailers have offered some form of gift card. Now that it’s 2006, the number is probably even larger. Coffee giant Starbucks has estimated that 10 percent of all its sales come from gift cards.

Another reason retailers love gift cards is that consumers pay less attention to sales and tend to spend more than is on the card. Retailers are finding that consumers spend the entire amount on the card and only have a small balance of $2 or $3 left on it. Chances are, shoppers will never use the card again, and this works to the retailer’s advantage.

Another benefit for retailers is that not only do they have the holiday rush and then prepare for the holiday returns, they actually get a double rush. Since consumers give away gift cards as Christmas gifts, after the holiday, the gift card holder usually rushes straight to the mall to issue their cards. This leads to a significant reduction in returned goods.

There are a few downsides for retailers. Gift cards can cost the retailer anywhere from 50 cents to $3 per card, depending on how many are ordered. Added to this are implementation costs of up to 50,000 US dollars. The implementation costs cover all start-up fees related to gift card creation and tracking.

Exchange of gift cards

Recently, Internet companies have created websites that allow people to sell or trade unwanted gift cards. EBay followed suit and now has more than 7,500 gift cards listed for sale or auction. This can be a good idea when you receive a gift card for a specific store and you don’t like anything in that store. You can exchange these cards for other cards or even cash on these sites. Sites like SwapAGift.com and CardAvenue.com are good sites that offer this service. You can even buy gift cards at a discounted price at CardAvenue.com. For example, you can buy a $25 Office Depot card for $17; this is another way of saving.

Gift cards can make giving gifts easier

What can someone do who is wondering what to get that person on their gift list who seems to have everything? After much careful thought and deliberation, how can they still not be closer to the idea of what to gift that individual with? Regardless of taste, lifestyle, gender, or interests, the right gift card can be the perfect gift for almost anyone who has the opportunity to shop online or in a store. Receiving a card can ensure the recipient gets the exact surprise gift they want, and often for something they might not otherwise have bought for themselves, easily making it one of the best gifts available. Some might argue that giving gift cards seems like an impersonal or thoughtless gift, but it’s actually a practical idea for many reasons.

It’s an easy way to gift someone when you just can’t find the perfect gift based on what you know about their tastes, interests, or needs. Lifestyle gift cards can be combined with any other offer when shopping online or in department stores, allowing gift card recipients to save them for upcoming sales or special offers and make the most of the amount on the card. You can add another amount, which can make giving more gifts or surprise gifts in the future an even easier task.

A gift card can be a great alternative to giving cash as it can be personalized for the person receiving it. The selection of lifestyle gift cards at most major retailers is large enough to be tailored to the recipient and their interests. This gifting option is available for everything from restaurants to movies, salons, and just about any department store. These gifts are not thoughtless gifts if the giver takes the time to figure out which is the best.

As hard as it may be for some to admit that gift cards are often more welcome than traditional gifts, nearly fifty billion dollars worth of gifts are returned or exchanged during the holiday season alone. This does not take into account the numerous gifts for birthdays and special occasions, which most likely face a similar fate. Presenting such gifts can be less stressful and stress-free for both the giver and the gift card recipient, making the intention for the gift a much happier event.

It’s true that time is precious and all too often we don’t have enough of it. Buying gift cards saves gift givers a lot of time and energy that would have to be expended both in shopping and in thinking about the perfect gift. Gift cards are easy to buy and can very often be bought from larger retail outlets without having to travel further to buy one. They can be bought at the last minute for an impromptu party or special occasion and easily sent long distances by post or card.

Forgoing the practice of steam gift cards for free giving is certainly not the way to go. If someone comes across something while shopping that they think would be the perfect gift for a loved one, then they should definitely buy it for their next special occasion. Even today, giving presents creates a special bond between the giver and the recipient. However, giving lifestyle gift cards, specifically chosen to suit a person’s personal lifestyle, interests and tastes, can often be seen as just as thoughtful and fun as a traditionally wrapped gift.