Good gift cards

I’ve heard the complaints that gift cards are impersonal, thoughtless presents. But I’m a huge fan of the versatile goodies and I’m far from alone.

Gift cards top the wish lists of six in 10 Americans, according to the National Retail Federation’s annual holiday survey. TowerGroup estimates gift card sales will reach $100 billion this year.

They’re convenient to purchase and easy to send, even for last minute shoppers. So what’s not to love?

For one thing, fees and expiration dates. But fewer gift cards have either these days, since new regulations have been adopted to protect consumers. Still, it’s important to read the fine print in search of inactivity fees, transaction fees, and other miscellaneous charges that eat away at gift card balances.

Know that flexibility comes with a price tag. Widely accepted gift cards with a Visa, Mastercard, or American Express logo tend to have more tricks and traps than so-called “closed loop,” or store gift cards. However, low-cost prepaid cards such as Bluebird, the newly launched Walmart and American Express joint venture, should push these costs even lower.

On a tight budget? Be aware that you may have to pay a fee to purchase and ship the cards too, so keep that in mind when deciding the gift card amount.

While retailer cards are generally fee-free and expiration dates stretch years into the future (if they have them at all), there is the risk that if a store goes out of business, the gift card will be worthless. Just ask the holders of Borders gift cards what happened when the bookstore filed for bankruptcy.

Beyond bells and whistles

I remember the wow factor of picking up a gift card with flashing lights, or one that played Jingle Bells. My sons loved the gift cards that came with a LEGO model of Bullseye, Target’s bull terrier mascot.

But now the wow has gone virtual. Gift cards can be sent via email, through texts, and on Facebook. Will recipients miss opening up their plastic gift card package? Maybe, but I’ll take the convenience factor of having my gift cards on my always-with-me smartphone any day. Plus it will eliminate the guilt I feel when I chuck a used-up gift card in the trash.

Many retailers offer eGift certificates that can be emailed to recipients with a personalized note. But there’s fine print to be read for these offers as well. For example, Sephora’s eGift Certificate can only be redeemed online. 

Plenty of start-up companies are experimenting with mobile gift cards. For example, Gyft ( is trying to recreate the gift card kiosk on your smartphone. Gyft lets you buy and send gift cards to friends using Facebook, email, or text. The app also allows users to upload physical gift cards to their phone, eliminating the frustration of misplacing plastic cards or forgetting them at home. Gyft works with dozens of popular names such as and Toys R Us.

With Giftly (, recipients get a choice of three merchants selected by the gift giver. The service requires the recipient to register a credit or debit card and use that card for the purchase. After the purchase, the card is credited the full amount of the giftly bought by the gift giver. Nifty idea, but it’s an extra hoop to jump through. There’s also a small fee at the time the gift giver makes the purchase.

Then, of course, there are daily deals such as Groupon and Living Social, which have apps that allow you to send the deals as gifts. Some might think giving a discounted dinner or massage may seem cheap, but after years of stagnating incomes in this slowconomy, I think it makes givers look mindful and resourceful, not stingy or cheap.

Finally, some restaurants and retailers will give you a gift card freebie if you spend a certain amount on gift cards during the holidays. Typically, for every $100 spent, a free $10 gift card is issued. This is a great deal, especially if you frequent a merchant regularly. Those small denomination gift cards are also great stocking stuffers or presents for teachers and other professionals on your gift list. But why not treat yourself?

Kara McGuire is a personal finance writer and a St. Paul mother of three. Send comments, questions and story ideas to