It is interesting that the December 6, 2010 Fortune Magazine has a feature on Gift Cards and what all the costs are. They estimate that the total value of cards to be about $73 billion with 10 percent of that coming from kiosks at non-related stores. Six percent of the cards go unused which is more than $4 billion.
Click here for the post on Gift Cards on Fortune.CNN.com and details as to Where the money goes and where the cards are used.
Amazon.com is throwing around an idea that may even make the Gift Card obsolete. If you purchased a gift item (not a gift card), they would contact the recipient (presumably via e-mail) and notify them that someone purchased that item for them. Amazon.com would then give the receiver an option to accept the present or exchange it (store credit) for something else that Amazon.com sells. The article says that it is a patented process.
Click here for the Associated Press article that explains more about their idea.
Pros and Cons (off the the top of my head) of giving gift cards include:
- The time a giver spends looking for, buying, wrapping, and shipping presents is saved
- Amounts are disclosed and pre-determined
- Gift cards are easy to ship/mail and gift because of compact size
- Decreases environmental waste that occurs with packing, wrapping and shipping presents
- Items in the mail can get lost unless you spend extra cost it takes to send via Certified mail and/or Insure the items
- Limited to the specific store (I would not get a Visa or MasterCard gift card because of the huge fees)
- Fairly liquid market on eBay but usually do not get 100 percent value
- Receivers can take advantage of holiday sales to "stretch" their dollar
- Multiple gift cards from the same retailer can be lumped together to buy an item of larger value
- The receiver shifts their time from waiting in the return line, to picking out their item
- Recipients may have been contemplating what they want anyway
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