33 responses

  1. Shamontiel
    August 2, 2010

    I disagree with this one. Once you got the gift card, it was your responsibility to use it before the expiration date. Getting mad at Amazon.com is like getting mad at the coupon people for buying the product after the coupon is no good. As soon as I get a gift card, I use it before the month is out, usually sooner. Cash is cool, but I like gift cards because it makes me actually pay attention to value at a store. The only time I hate gift cards is if it’s a gift card for a place I never shop in.

  2. Money Reasons
    August 2, 2010

    My issuses with the amazon gift card are:
    1.) If I lived in Cali, the card would still be worth something even today.
    2.) Best Buy, Kohls and other gift cards don’t die on me… So why should the Amazon Gift Card. All three companies have exactly the same product, same cost, except the Amazon card has a ticking timebomb.

    For me, I guess it’s a matter of once bitten twice shy… ;)

  3. Everyday Tips
    August 2, 2010

    I used to be a victim of gift card expiration, but no more! I keep them in my purse the minute I get them. (Maybe you need a purse? :) )

    I love gift cards. It allows me to spend at places I normally wouldn’t. Since a gift card is usually a gift, I don’t feel like I need to be as responsible with it.

    Money Reasons, I just love Amazon at Christmas, you may want to reconsider your boycott. Free shipping, no dealing with crowds. It’s the best!

  4. Sandy L
    August 2, 2010

    Agreed with this one.

    Funny you have this article because just this weekend, I gave away 2 lowes gift cards to my MIL.

    I live in a smallish town, so I don’t have a lot of the stores bigger cities do. On at least 2 occasions, I got gift cards to places that were over an hour away for me. (ie, Lowe’s)

    I love Lowe’s but it’s over an hour from where I live. The last time I utilized my gift card there to buy a toilet, I came home and found it had a defect in it. So I think it cost me about $60 in gas and 5 hours of time to just buy that one thing.

  5. Budgeting in the Fun Stuff
    August 2, 2010

    I use gift cards that expire ASAP and take my time with the rest (pretty much I keep them until I may wander into the store one day).

    I’m sorry your $100 expired, but I think that I’d just feel sad, not mad. I know that most gift cards don’t expire, but if I was a store, that would tick me off. It would make me feel the same way as when somebody doesn’t cash my check and I have to keep up with that debit anyway for months and months and months…

  6. Little House
    August 2, 2010

    I live in CA, so I’ve never experienced a gift card expiring. However, I have received cards that I don’t want. Sometimes I’ve resold them on eBay, other times I’ve gone directly to the vendor and asked for the cash value (this only works if you’re persistent or you have a gift receipt along with the card). Yes, cash is king, but I don’t mind a Starbucks gift card every now and again! ;)

  7. Jin6655321
    August 2, 2010

    @Budgeting in the Fun Stuff.

    Actually, companies love it when you hold unto gift cards. You know how they say that a tax refund is just an interest free loan to the government? Well, gift cards are the same to retailers. I heard Starbucks makes millions a year just on the INTEREST off of all the unused gift card. At first I was like BS! Then I thought of all the Starbucks gift cards I’ve received and how it takes me forever to get through just a $25 one because I rarely go there anymore and… Yeah, I can believe it.

    Gift cards are considered loans and gift card holders are considered unsecured creditors. So, if you hold a gift card to a company that declared bankruptcy, you might be screwed. If you have any Blockbuster gift card kicking around somewhere, now would be the time to use it.

    Oh, and let’s not forget that gift cards are very susceptible to scam.

    For one, some crooks goes to places like grocery stores or Target where they have gift cards displayed on the floor. They will write down the numbers of the gift cards on top, knowing those will be the first ones taken. Then, they just wait a few days, goes on line to check the gift card balance, and if there is one, voila! Someone bought it! They have the number! It’s time for some free on-line purchase!

    Another scam: You hand a cashier a VISA/AM EX gift card (the most EVIL gift card of all!!!). The cashier correctly informs you that unless you know the exact amount of balance, the card might get denied, would you like for him to call and check the balance for you? Oh, yes please (good customer service,right?)! He calls and tells you that there’s $13.87 left on the card when, in actuality, there’s $18.87. It was a $100 card, you’ve been shopping all day, it sounds about right. He charges $13.87, leaving a $5 balance then offers to toss it for you since it’s now empty. Except of course, he doesn’t; he keeps it.

    Another popular scam: You tell a cashier you want to buy a $25 gift card. No problem he says and how will you be paying? Cash! Awesome. Here’s your $25 gift card… but it’s not really $25, it’s $24. The cashier pockets the extra dollar. If it’s a place like Starbucks with a lot of GC purchases, that extra dollar can really add up.

    So, when buying gift cards, never pick up the ones that are displayed throughout the store, grab the ones by the check out. Pay for gift cards with a debit/credit card and always check your receipt to make sure it’s the correct amount. Honest mistakes do happen, sometimes, “Fifteen dollars” sounds a lot like “Fifty dollars”. And, when redeeming a gift card, always ask for the gift card back and always check the balance yourself.

  8. Jin6655321
    August 2, 2010

    That being said…

    I do like gift cards. If I get cash I always feel obligated to do something responsible with it, like put it in savings or use it to pay some bills. But, if I get a gift card (to a place that doesn’t sell grocery or household necessities) it’s a fun way to splurge for free.

  9. Evan
    August 2, 2010

    I understand why people give gift cards (1) There is a higher likelihood that you’ll buy a gift vs. just paying bills and (2) Giving cash just feels weird unless it is in a wedding/graduation situation.

  10. Money Reasons
    August 2, 2010

    @Sandy L
    lol, I don’t mind receiving gift cards, but I prefer cash :)

    Your case is another great reason we should give cash instead of gift cards!

  11. Money Reasons
    August 2, 2010

    @Budgeting in the Fun Stuff
    The Amazon card was my first gift card. And since I heard it was the same as cash, I didn’t realize that it had an expiration date like eggs from the grocery store… unless you live in California :( Who would have guess that plastic was perishable? ;)

    As for not using the card, it’s pure profit for them. Them being either the store or the card issuer.

    Back then I was younger and $100 was a lot to me, now not so much (or not quite as much)… Since it was a lot, I was going to use the card to buy something big, perhaps a computer (they were more expensive then). I was very sad and disappointed that it expired (of course, unless I lived in Cali)!!!

    Being a bit older now, I’d make sure I read the small print on such a gift.

  12. Money Reasons
    August 2, 2010

    @Little House
    Starbucks and restaurant cards are a bit different for me too! I know that I will use them instantly.

    I love getting restaurant gift cards, but even then I would love to get cash even more!!!

    I especially like the Starbucks cards because sometime I won’t spend cash to buy a Starbucks latte (yep, lattes are my poison), so having the gift card foreces me to enjoy the beverage!!!

    But for those type of cards, I specifically request them from relative for holiday occassions.

  13. Money Reasons
    August 2, 2010

    Wow, you identified some additional great reasons!

    Thanks for the great additions to my initial post! I hadn’t even heard of those scams or concerns!!!

    Hmmm, I did have someone tell me my balance on a card was empty and that the would toss it for me… It now makes me wonder!

  14. Money Reasons
    August 2, 2010

    I agree and realize both of those reasons you’ve identified. And I’m one of those types that would do something responsible with the money.

    Perhaps a good compromise would be to put it in a card with the request that the money be spend on a restaurant or a certain purpose? I know that wouldn’t work for everybody, but if they need the cash that badly, perhaps they should spend it the way they choose?

    I specifically ask for Starbucks cards and a certain chinese restaurant card, just because I know I’ll forget and use the money for bills or savings…

  15. Money Reasons
    August 2, 2010

    @Everyday Tips
    Purse, hey you mean an European Man Handbag, right!!! :)

    Yeah, I guess Amazon learned their lesson, I’ve punished them enough! I bet they will be sighing a sign of relief knowing that I’m willing to shop at their site again. (lol)

    I usually shop at ebay, but I have searched Amazons site for things. I’m sure, eventually I will break down and swallow my pride and buy something at Amazon someday… ;)

  16. Jennifer Barry
    August 2, 2010

    I prefer cash too because gift cards require another step. It’s also awkward on a restaurant card for example, when you have enough left for about half an entree, and it’s a special trip to go back and use the rest. We often end up giving the cards away because we don’t like the food or the store is too far away like Sandy mentioned.

    In the past, I was also a victim of a card that started deducting fees after a few months. The value literally rotted away.

  17. Budgeting in the Fun Stuff
    August 2, 2010

    1) If companies loved it when customers hold on to their cards, why did they have expiration dates? I assumed it was so they could clear their “holding for purchase” accounts of the cards that probably won’t get used.

    2) Yes, if a company goes out of business, you are out of luck. Luckily, you can spend them at the Going-Out-Of-Business sales. :-)

    3) All of my gift cards had numbers under an area I had to scratch off (except for emailed certificates from Amazon). How would scammers be able to get that number without scratching off the gray stuff?

    4) Being told the wrong amount happens on lotto tickets too. Just check you own balance using the cell phone you probably have, right?

    5) Every gift card is activated at check out, so the employees can’t pocket the cash. Otherwise, they’d come up short at the register unless I am misunderstanding you. Are you saying they just put $24 on the card? If so, the receipt would show you that…

    So, I’d agree with “Pay for gift cards with a debit/credit card and always check your receipt to make sure it’s the correct amount. Honest mistakes do happen, sometimes, “Fifteen dollars” sounds a lot like “Fifty dollars”. And, when redeeming a gift card, always ask for the gift card back and always check the balance yourself.”

  18. Money Reasons
    August 2, 2010

    @Jennifer Barry
    I’ve been in the scenario too. I had a bookstore Gift card that was eating away 5% every month. So it would never go to zero, but it had the potential to become almost zero.

    For that particular one, I used it fairly quickly. I think I may of loss 5% of the value because I used it in 2 months instead of 1.

  19. Squirrelers
    August 2, 2010

    I have been luck enough to avoid having gift cards lose value or expire, and honestly that’s been with the help of some good old fashioned luck. I do think its a good idea to use these as soon as possible after receipt, to prevent not only reduction in value, but also to protect against insolvency of the business or one’s own risk of losing a card.

  20. Money Reasons
    August 2, 2010

    Yep, I’ve learned my lesson!

    I prefer cash over gift cards… but I do have 2 restaurant gift cards, and 1 Starbucks gift card in my wallet right now! Ironic, huh… :)

  21. Jin6655321
    August 3, 2010

    @ Budget in the Fun Stuff

    Based on my experience as a retail manager…

    1) It’s kind of like this: Let’s say I give you $100 in exchange for an IOU that says you will provide 1 day of room and board sometime in the future. It could be tomorrow, it could be a few months. You put it in a special account, just to make sure you have money for extra groceries, but, being a PF blogger, I bet it would be an interest bearing account… :) So, not only did you make money by me staying in your home, but you also made money off the interest you earned with my $100. Awesome, right! Now, think of that $100 as several million dollars and you can see why companies want you to hold unto GCs. As for the expiration date it’s probably so they can purge their database every once in awhile.

    2) If a company is going out of business then chances are very good that they’ve already declared bankruptcy. At that point, GC holders are considered unsecured creditor and GCs will not be honored. The reason is that when a retailer starts liquidation they usually sell all their stock to a third party liquidation company that’s totally independent of the failing retailer. The building is the same, the staff is probably the same, but it’s no longer XYZ Mart. The liquidator sets their own price and you are now dealing with a whole new company. Just as Target doesn’t honor Walmart GCs, the liquidator will not honor XYZ Mart GCs unless XYZ Mart offers to back it up, which they rarely do because they don’t have the money, they’ve already sold all their merch (to the liquidator) and what do they care about pissing off their customers now? If, after paying their landlord, supplier, etc there’s any money left, they might reimburse you for a portion of the amount… if you file claim. However, that’s pretty unlikely. If you ever receive GCs to Blockbuster, Radio Shack, or Borders, I would spend it ASAP.

    3) You know, now that you mention it, I don’t really know what that scratch off portion is for… You never need it to make a purchase in store… Maybe you need it on-line? I think I once helped a customer make a purchase on-line but I can’t remember if they needed that part of the GC #. Now that I think about it, if I were a thief, I probably wouldn’t want to use my address to have anything sent to me. I would go to the store, tell them that I lost the GC, but I have the GC number, and ask them to transfer the amount to a new card and spend that in store.

    4) I would always check my own balance or have the cashier give you the receipt after checking the balance (it always spits out a receipt) to verify. A word of warning, (unless they changed their policy recently) Visa GCs will charge you something like 25-50 cents if you check your balance over the phone, yet another reason why Visa gift cards are EVIL (it’s free to check on-line).

    5) The register wouldn’t be short if they put in that the person bought a $24 GC, they would just take a dollar from the register when you give them $25. The receipt would show that the GC only had $24 but very few ppl actually take the receipt. Most people don’t take receipts unless they anticipate a return. It’s very similar to the drive through scam where the person taking the money pads your total by like a dollar or two.

    Now in defense of GCs…

    1) Say you bought your brother a $50 sweater. When he goes to return it, it’s marked down to $25. If he doesn’t have the receipt, he will only get $25 back. A $50 GC will still be a $50 GC.

    2) Say you bought your gift at a place where you only have X amount of time to return it. Between the time it took you to give the gift to the person and for that person to decide she doesn’t like it and return it, that purchase exceeded the return time period. Now, the person is stuck with it (or, like scenario #1, they have to settle for a reduced amount). Not an issue with a gift card.

    2) If you don’t like carrying around cash but you want to try the “envelope method” of budgeting, GCs are a good alternative.

    3) Kids LOVE LOVE LOVE gift cards. If you’re shopping for a kid and you don’t know what to get, get them a gift card. Kids love carrying around cards in their wallet.

    4) If you lose cash, it’s gone. If you lose your GC you can always get the balance transferred to a new card if you have the card #.

    5) Most GCs do not have fees or expiration date, except VISA/AM EX. They really are very very EVIL.

    6) Most importantly, GCs do show a more thought than cash. And, isn’t that the point of gifts, to say you took their likes and personality into consideration?

  22. Budgeting in the Fun Stuff
    August 3, 2010


    I loved seeing both sides. You could have guest posted with that second response!

    So by checking receipts and your balance yourself, a ton of gift card problems are solved…that’s cool. I got lucky with Hollywood Video…they accepted my gift card during their going out of business sale. Yay!

    The scratch-off portions of the gift cards I have right now (Kohl’s, Bath & Body Works, CVS, and Bed, Bath, and Beyond) are for the PIN#’s of the card. It says that if I want to make online purchases, check my balance, or even transfer my balance, I need to enter the PIN#. I also have a Chili’s giftcard, but it doesn’t have a scratch-off portion.

    Thanks for the inside look! I agree with all of the benefits you listed too.

  23. Jenna
    August 3, 2010

    I haven’t ever been burned on a gift card, but I have started giving away Kiva gift certificates. They come in denominations of $25, which you invest in a microloan. In the perfect world, you get the money back in less than a year. Which you can reinvest, invest in Kiva the company or take out and spend as you please.

  24. Money Reasons
    August 3, 2010

    I’ve never heard of those before, sounds interesting! Very different concept!

  25. Ashley Jacobs
    August 4, 2010

    I totally agree with this article! I have had gift cards depreciate in value and it is such a bummer. Cash is way better!

  26. Money Reasons
    August 4, 2010

    @Ashley Jacobs
    From a frugal perspective, Cash is definitely better.

    I read enough other commenters that said either they lost value on their gift card or their cards expired after a year like the Amazon card that I had.

    So yes, I do have gift cards, but I prefer cash.

    Thanks for stopping by Ashley :)

  27. Frank @ Payday Loan
    August 8, 2010

    Thanks for the informative article

    However i must say that although I don’t always go for gift cards.I hold you responsible for waiting so long with your gift card only to find that it has expired.

    Gift cards are not evil in themselves but I stay away from them as well as credit cards and ATM cards as much as I can because of the high fees

  28. Bob
    January 18, 2011

    Card companies KNOW that gift cards often have unused balances on them- translation: Free Money! The fees are a total scam.

  29. Pam
    November 20, 2011

    I personally prefer getting cash over gift cards, too, mainly because it gives me way more freedom to do what I want with it. The downside for me though is that I probably won’t end up spending it on anything fun, I will likely just deposit it into my account and end up paying basic expenses with it. If I get a gift card, then I will actually treat myself.

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