Number of the Week: Billions in Gift Cards Go Unspent

  • It amazes me that gift cards are ever purchased by anyone. The only possible benefit is to the vendor, in every scenario, and this should be obvious:

    - If you spend less than the card amount and don't use the rest, the vendor wins.

    - If you spend more than the card amount, the vendor wins.

    - If you somehow spend the exact amount on the card, the vendor still wins because they made you buy something at their store instead of a competitor's. Also, the card amount influenced the decision of what to buy, which wouldn't have happened when using cash.

    It is also not only an unimaginative gift but a bad gift, because:

    - You are compelling the recipient to shop at a particular store (a store that may not have what he or she really wants).

    - You are probably compelling him or her to spend money that wouldn't have been spent otherwise, because the card may not cover everything (in this way, it's like a tax). And if more money isn't spent, the "gift" is worth even less than it was supposed to be.

    - You are stating pretty clearly what you think the person is worth. If I receive something nice, I might not think "this is worth $5", but when I am given a gift card I feel "oh, they think I'm only worth spending $5 on".

    It would be nice if people would just identify gift cards as a massive scam and start giving real gifts again (or at least get over the apparent stigma carried with gifts of cash).