Christian Financial Advice and Biblical Stewardship

5 Reasons to Avoid Gift Cards

  • 2008 17 Dec
5 Reasons to Avoid Gift Cards

I recently did some research on gift cards for my weekly TV segment on the FOX morning show in Nashville, and I ran across a curious piece of data:  This year there will be approximately 20 percent more people giving gift cards than there will be people wanting to get them! That stat struck me, and I wondered why.  Then it occurred to me:  Maybe people give gift cards because they’re easy — and require little effort. While the giver finds giving gift cards easier, some recipients don’t like them because they can be a real pain.

Let me share a few things to consider before selecting a gift card this season:

1. Unlike the old-fashioned gift certificates, gift cards may leave you with a wasted balance. Do you remember the old gift certificate that your grandmother gave you for $20 for merchandize at the toy store? If you bought something for $18, they gave you the remaining $2 back in change. But, with a $20 gift card it doesn’t usually work that way. If you spend $18 of its value you’re simply left with a $2 credit. Many of these $2 credits never get spent — thus leaving retailers millions of dollars in “free” money. Or, consider this scenario: you find yourself trying to “use up” the remaining $2 by buying something for $8 that you really don’t need. 

2. Beware of bankrupt retailers. As the economy worsens, many retailers will close their stores. If you get a gift card from a retailer that closes, you’ll most likely be out of luck. There aren’t a lot of laws protecting consumers in this area. If you are given a gift card, consider using it quickly. The week after Christmas is usually a great time to find bargains. For a list of retailers to avoid purchasing gift cards from, check out Ellie Kay's recent article Gift Card Warning!

3. Some gift cards have expiration dates. Even if a store is not going out of business, some gift cards may expire after a certain date. While many store cards do not have expiration dates, according to you may find that the Visa or Master Card you give expires within a year or two. And some may begin charging a monthly service fee after a year or two, which leads into point #4...

4. Some gift cards charge fees. Once again, many store cards don’t. But often the Visa, Master Card, and Mall cards do. These fees (frequently $3-$5 per card) can add up in a hurry.

5. Think about giving gift cards for essentials. So you still want to give gift cards for Christmas? With more people losing their jobs, consider giving “practical” gift cards. Give a gift card for groceries, gas, or even to help pay utilities.

Steve Diggs
presents the No Debt No Sweat! Christian Money Management Seminar at churches and other venues nationwide. Visit Steve on the Web at or call 615-834-3063. The author of several books, today Steve serves as a minister for the Antioch Church of Christ in Nashville. For 25 years he was President of the Franklin Group, Inc. Steve and Bonnie have four children whom they have home schooled. The family lives in Brentwood, Tennessee.

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