For the first time in six years, holiday shoppers will spend less on gift cards, according to the latest National Retail Federation Gift Card Spending Survey.
Maybe they know something you and I don’t know: that gift cards can come with a significant “down” side.
Understanding these gift card pitfalls is important if you want to retain the full value of your purchase.
Don’t lose your card
Treat gift cards like cash. During the holidays, it’s easy to misplace gift cards that are buried in papers and envelopes. One friend told me her boss had given her a $100 gift card to a swanky retailer.
“I had tossed the holiday greeting card not remembering the gift card was still in there,” she says. “By the time I had realized the gift card was MIA, the trash had been picked up. I felt so guilty.” Her advice: “As soon as you get a gift card, put it in a safe place. Better yet, put a rubber band around the cards to keep them together and organized.”
Be aware of gift card liabilities
Most people toss a redeemed gift card after a purchase. Not so fast, advises a friend. She said that she purchased a coat and later realized that it wasn’t what she wanted.
“I went back to the retailer for a refund and afterwards learned the store clerk had applied the credit to that gift card I no longer had. In essence, I lost $150,” she laments. Lesson learned: If you use a gift card for a purchase you are not sure you will keep, hold on to the gift card just in case.
Check the physical integrity of the gift card
Make sure the pin number is not rubbed off, and make sure expiration dates permit ample time for use. Also, make sure the magnetic strip on the back remains intact. If that is damaged, a store may not be able to use it.
A service fee is often required to purchase a Mastercard, Visa or American Express gift card. It may not seem like a notable surcharge, but purchasing several can add up. An idea: Pick a store or restaurant gift card instead. Taking note of terms, conditions and fees can make this holiday gift option less of a hassle.
A card might be the wrong gift
A new study by the Center for Generational Kinetics and Gift Card Impressions reveals that 70 percent of Americans felt it would be more meaningful to receive a digital gift card versus a traditional plastic gift card if the digital gift card was personalized. But this “click and go” option may not be a one size fits all. For recipients who aren’t Internet savvy, or who may not be familiar with this concept, it may not be the best fit. They may forget to print and use or not know how to use it as a smartphone application.
Don’t write the epitaph for gift cards just yet. Although holiday shoppers will spend slightly less on average ($153 vs. $172 last year), they’re still spending a boatload on cards.
Total gift card spending is expected to reach $25.9 billion, and 59 percent of shoppers said that they would like to receive a gift card, making them the most requested gift item nine years in a row.