My darling loved-ones, you really do not have to get me a Christmas present. I have too much already. Really. I need to simplify. And I know that you also know that I really need nothing, because you just don’t know what to get me. And you don’t want to give me cash because you think it is in bad taste … so you decide to get me a gift card - one of those cute colourful gift cards that stare you in the face by the check-out counter that you end up staring back at while you are forced to stand in line, wondering what wonderful things I could buy for myself at this wonderful store. And, well shoot, you’re at the cashier and so there is not much time to ask questions about the cards. And frighteningly their popularity is spreading like an epidemic. Here’s a quick and nasty economic lesson:
Let me begin by asking you: did you know that merch is put by the cash register for impulse buying? Before, it wasn’t so bad when it was just a pack of gum, or a bar of chocolate, maybe a lighter or some batteries that you never seem to remember to buy anyway. However, now these gift cards are BIG TICKET impulse items, ranging from $10 to more than $250. Whatever amount you want! How much is your loved one worth? A lot to you, but unfortunately that fact means a lot more to the store …
… even more if you lose it! Sorry. Non-replacable. OK, so neither is cash - but, be very careful because a shiny slippery unfamiliar gift card is much more easy to lose than lovely worn-in well known cash - we really are a too-many-card-carrying society, and we get a bit too loose with them. I can tell you that working with the public, when clients are searching through their wallets for their necessary client card they have no less than 10 cards in their wallets, some up to 50! Stacks and piles in elastics, in daytimers, in pockets. Anyway, I digress.
Now, the stores do not tell you that from the $100 with which you buy the card they will be taking from $1.00 to $2.50 off of the card per month, for “administration purposes”. For example, if you bought the gift card in November for $100, it is only worth $98.00 in December, and then $96.00 in January, etc. And from another angle, if you kept your $100 in the bank for November it would be worth $100.30 in December, if you’re lucky. See? The store makes better interest off you than they would off the bank.
Even worse, after a year these gift cards and certificates EXPIRE. Yes, your cold hard cash that is valid Canadian currency - $100 in 5 crisp new $20 bills of good’ol canadian linen that you can touch, wash, smell, count, write notes on, and stick under your mattress for a CENTURY if you wanted - has been reduced to a simple, earth littering 2″ x 3″ colourful plastic chit of temporary value.
What are the stores thinking? “If this sweet loved-one likes the look of our cards and gives us their money, then that forces the loved-one’s loved-one to shop at OUR store. And the beauty of it? We get to keep the loved-one’s money even if the loved-one’s loved-one NEVER EVEN comes through the door! Sick. How can stores do this? Because we buy into it. And why? Because we are thinking of doing something nice for our loved-ones. And we don’t talk about it.
You see, the stores are trying to balance out their after-Christmas winter dive in the consumer graph. “Get them to spend now on nothing, for something that they collect or cash in later because it seems like its free - then they will feel like going out & spend a bit more in January and February, or they will forget altogether! Yeah! Then free money for us”. And who actually spends $20 exactly, including GST, tip, etc.? It will either be slightly more than $20 (in order to get rid of the card you will pay 5$ or 10$) or slightly less - after which you will most likely toss the card. Again, free money for them. As well, the stores can declare this money when they want, because when you buy the gift card you haven’t really bought anything yet - and so have not paid GST on it. Get it? It was a straight trade: cash for a card that is sort of like cash. Hmmm. Sort of like money laundering, but at least with money laundering a buck is still a buck. Somehow and by one way or another the gift card’s value disappears.
By our human nature we are hoarders, we collect airline miles, grocery points, gas station points, stuff, and above all- cards. And, let’s not talk about the ones that I still have - from restaurants, hardware stores, and department stores - and that I never used because I don’t usually eat there, go there, shop there. And let’s certainly not talk about the times that I do remember and attempt to use the gift certificate or card that I had placed in the kitchen drawer … and the certifcate is expired, or there is only $35 left on what was a $50 card to begin with. I would really like to know the statistics on # of cards bought and original $ value to # of cards cashed in and $ value when cashed in. I wonder what consumer group could gather that info for us. I suspect that the results would be rather eye-opening.
Don’t even get me started on the occasions of fraudulent use of these cards.
Finally, your cold hard cash could be spent ANYWHERE, even four different anywheres; whereas, the gift card or certificate is only good for that one franchise family.
Think twice about gift cards and certificates. Ask the business when the certificate is going to expire, if and how you can re-activate it, and how much the administration charge or maintenance fee is per month - before buying. And get the answer from Management. It’s for everyone’s good, except the stores that is. So again, please don’t worry about getting me a gift. But if you feel that you have to, please, please, please do not buy me a gift card.
