Gift cards are a great way to give someone a present they'll never have to exchange. The person receiving the card can use it to get exactly what they want, and the giver doesn't have to drive all over town looking for the perfect present.
Gift Card Basics
For most retailers, gift cards have replaced traditional paper gift certificates. Their durability and the ease with which they can be carried in a wallet make paper certificates obsolete.
These cards are also an easy way to give presents to long-distance friends and relatives, since they can be slipped into a regular envelope and sent across the globe. Since not all stores are nationwide, the sender has to make sure that the person receiving the card can use it at a store in their area.
Charities have been able to cash in on the gift card craze as well. Organizations like women's shelters accept donations of cards to local stores that they can use to purchase needed items. Unlike a donation of cash, the benefactor has a better idea of how the gift will be used and the charity can request cards from a certain store that they can use to make a large purchase. Retailers also like to give gift card donations since they know the purchase will be used in their own store.
Using Gift Cards
Many major retailers and online sites now sell gift cards. These small, plastic cards look just like credit cards, but without the interest rate. Instead of being linked to a bank account or line of credit, the value of the card is paid in advance, just like a prepaid credit card. As they are used, the amount on the card is automatically deducted until there is no balance left. Some cards allow you to add to their balance, giving you the freedom to shop at a favorite store without cash or credit cards.
The downside of using these card is that they can't be replaced. There's usually no signature required on the back or any place to list the carrier's name so if the card is misplaced or stolen, it's gone for good.
Where to Purchase
Most large retailers and restaurants now offer gift cards to their customers, which can usually be bought in the store or through its website. Stores offering this easy gift idea include:
- Barnes and Noble
- Sears
- Target
- Toys R Us
- Circuit City
- Pet Smart
- Borders
- Red Lobster
- Outback Steakhouse
- Olive Garden
- Walmart
- JCPenney
- Gap
- Old Navy
- Kmart
- BlockBuster
- Linens and Things
- Bath and Body Works
Many local retailers like grocery stores, florists, and gifts shops also offer this gift-giving option.
Bank-backed Cards
Financial institutions and large banks have recently gotten into the gift card game. Companies like Visa, American Express, Discover Card, and Bank of America offer cards that can be used at almost any retailer that accepts credit cards and at ATMs. This lets the customer decide where they want to spend the money instead of being tied to just one store.
Drawbacks
Unfortunately, not all cards are so easy to use. Some cards come with expiration dates or transaction fees. The following tips can prevent you from losing money when you purchase or use a gift card:
- Ask about fees. Common costs include transaction and inactivity fees. Always ask the salesperson if your card has any fees associated with it.
- Read the small print. Even after talking with the retail associate, carefully look over the back of the card and any printed material. Pass along any literature to the gift receiver so they are aware of the terms.
- Find out if it expires. Ideally, your card should never expire, but it should at least have a shelf life of a year or two.
- Determine where it can be used. Some gift cards can be used at retail locations and online, while some are restricted to one or the other. Make sure you, and the person using the card, understand its limitations.
