Money doesn't actually talk. We do.

Seven Reasons Why It’s Rude to Give Gift Cards

With the usual batch of holiday-shopping roundups this month comes an emerging subcategory: The Drawbacks-to-Gift-Cards story.

USA Today’s is a typical example, dutifully noting gift-card fees, expiration dates and other fine print. Consumer Reports has a bang-up feature. They even bought an ad (at right) in the New York Times to tout their scribblings on the subject.

In the category of tax dollars well spent, meanwhile, is the annual survey of the gift-card landscape that the Montgomery County, Md. Office of Consumer Protection puts out this time each year.

Here’s the question that no one’s asking, though: If gift cards cause so many problems, why are we still giving them at all? And what does it say about us givers that we just blithely ignore all of the drawbacks?

So let’s just put it out there, shall we? It’s rude to give gift cards.

Here’s why:

1) Gift Cards Are Easy to Lose: People don’t want them bulking up their wallets, but where do they put them instead? And once they find the right place, how do they remember where they put them?

2) Gift Cards Expire: It’s one thing to give a gift that has an obvious expiration date. People know to eat the fruit baskets quickly (and that the fruitcake can wait until next year).

But the gift cards that American Express, Discover, MasterCard, and Visa have created can start losing a value bit by bit after a year or so. Bloomingdale’s and Macy’s gift cards have the same problem.

Why would we give someone something like that when Consumer Reports’ survey notes that 27% of people who got gift cards during last year’s holiday season had not used one or more of them yet?

3) Recipients Have to Spend Their Own Money to Extract a Gift Card’s Full Value: Think about it – If people only spend $94 of a $100 gift card, the last $6 eats away at them. But unless they find a pair of socks for $6, they’re spending their own money on our gift to get them over $100.

4) A Gift Card is a Bigger Gift to the Retailer or Card Issuer than it is to Your Sister-in-Law: Consumer Reports notes Tower Group’s big honking estimate: $8 billion dollars of unused gift card money from 2006. Less obvious is the money retailers and banks earn from the float – the money they make investing the giver’s $100 before the getter gets around to spending $94 four months later.

The banks issuing Visa and other gift cards also make money on purchase fees, merchant fees and reissuing fees. Happy holidays to them!

5) Gift Cards are Easy for the Giver but Hard for the Getter: We can order gift cards online, we don’t have to fight the Black Friday crowds and we don’t have to worry about picking out the right thing. The beneficiaries of our generosity have to store the card, check it, track it and remember to use it. Oh, and it might not work online — so they have to go fight the crowds in the stores.

6) The Fine Print Ain’t Obvious: All of us register cards and record card numbers for our beloved recipients in case they space out and throw them out, and we present them with a full explanation of fees and warnings, right? No? Of course not. That would be embarrassing. Well, then so is a gift of a gift card.

7) Gift Cards Aren’t What People Really Want: Go ahead and ask them. Wouldn’t everyone prefer cash to spend as they wish?

Ah yes, cash. Remember cash? Even easier to acquire than a gift card, comes with no terms or conditions and works anywhere. Oh, but cash is so… gauche, people say. Please. As if giving someone a piece of plastic that is worth the same amount is that much more dignified. When are we going to realize that the better gift here is the one that’s been sitting in our wallets all year long?

– Ron Lieber