Why gift cards work.

My friend and former fellow MSN Money columnist Liz Weston really, really dislikes gift cards. She despairs of a world in which a shopper grabs a dozen plastic rectangles from the supermarket’s “gift card mall” and does a mental butt dance: Woo hoo! I’m all done my holiday shopping!

That image bothers me, too. Gift-giving should not come down to, “How fast can I get this over with?

Yes, I know you’re busy. So are a lot of people. But must generosity be reduced to a time trial?

That said, I think that gift cards can make good presents. It’s the intention that matters.

I love looking for the perfect gift, whether it comes from a rummage sale or a department store. But I also realize that a teen-aged niece might prefer to buy her own clothes, books or music.

It might feel a little impersonal to hand over $20 worth of scrip to iTunes or Old Navy. But I’d feel worse if I gave her a sweater she would never wear.

Learning to write a thank-you note for a gift you were less than thrilled to receive is a useful life skill. But I’d rather give something I know would be used.

Bonus: She could get a lot more bang for the (albeit plastic) buck by using that card at the post-holiday clearance sales.

Besides, hardly anyone writes thank-you notes these days.


Frugal gift cards

Gift cards can be had at a discount. Companies like Cardpool, Plastic Jungle and Swap A Gift sell gift cards at discounts of 3% to 50%. This creates an additional layer of savings on top of discounted prices and/or coupons. Some of those resellers can be accessed through cash-back shopping sites like Mr Rebates, DollarDig and Ebates.

I’ve gotten cheap (or free!) gift cards in other ways, too, including:

  • As blog giveaway prizes
  • Through other online incentives. For example, I recently took part in a live chat and won (among other things) a $100 Target gift card and a $25 prepaid Visa. Both came in handy for my holiday shopping, including my midnight Black Friday jaunt.
  • From rewards credit cards and also from rewards programs like My Coke Rewards and Swagbucks.
  • From social buying sites like Groupon and LivingSocial. For example, recently I spent $5 for a $10 Subway card and took a friend out to lunch. Again: Groupon and Living Social can both be accessed from some cash-back sites (see above) for an additional discount.

And yes, I’ve even gotten gift cards as actual presents. My dad sends me one every Christmas. Does that bother me? Not particularly. We both get what we want: He gets out of wondering what I’d like and then boxing it up and mailing it, and I get to buy at my leisure.

To some people that feels impossibly impersonal. Why not just send a check and be done with it? I can’t explain why, but to me a gift card feels more like a present and less like a cash equivalent. That’s silly, since it’s the same as mailing me $50.


Gift cards = someone else pays

In fact, a check would be more secure. Once deposited it can’t be lost or stolen, whereas both could happen to an unused or partially used gift card. I’m generally pretty careful, but if I got mugged again the gift cards would be used by some rogue, or dumped in the nearest trashcan along with my stripped-of-cash wallet.

All that makes sense. But sometimes my brain doesn’t. This is one of those times: To me, a gift card just feels better than cash.

Maybe that’s because if I got a $50 check I’d deposit it. That’s what you do with checks. A $50 gift card, on the other hand, means my next however-many trips to Walgreens (this year’s choice) are covered.

I could get lots of free-after-rebate items and donate them, or even use some myself. I could treat myself to a bag of chips (on sale, of course), or buy cold medicine and not feel irritated at the price. After all, someone else is buying.

If gift cards bother you, don’t give them. And if receiving them bothers you? Check out Gift Card Exchange Day on Dec. 26, during which card resellers promise to pay top rates.

Or just send them to me. I promise not to be irritated. Heck, I’ll even write a thank-you note. By hand.

468 ad


  1. I LOVE receiving giftcards…especially now that they’ve invoked the new rules about expiring.

    However, I don’t like getting VISA/MC g/cs as they impose a fee. I can earn giftcards from my Chase Freedom Account at discount prices…i.e. $80 gc for $60. Not bad. Recently I won a $365 gc to a grocery store near us. I LOVED the freedom of not having to hand over cash, nor write down the transaction in my checkbook.

    The one downfall to giving them as gifts is the number factor. Some people don’t want you to know how much they spend on gifts (including me).

    All in all, I, too, would LOVE to receive a gift card for Christmas…then I could shop at my leisure when the stores are empty!

  2. Gift cards aren’t my favorite because I always forget to use them. But they are very easy to regift!

  3. As a wedding gift, we received a $50 gift card to a business we never heard of. We thought it was a regift – tacky tacky tackyz crate and barrel, macys, or even target we would understand (where we registered). Just bring a card if you don’t have the funds. We are so focused on material goods now that we don’t focus on the nonmaterial like emotion, relationships, and shared experiences.

    • Donna Freedman

      @Sun: Perhaps the giver wanted to introduce you to a new business? Or maybe it was a re-gift, and this was the only thing the giver could afford? Some people feel really bad about not being able to give presents when they’re invited to a special occasion.
      Or maybe it was just what seemed to you a bizarre and/or tacky gesture. It happens. It’s great that you registered at several places, but that doesn’t mean you can force people to shop there. Just remember this phrase when writing the thank-you note: “We were so pleased that you were able to share our special day, and so touched by your kind gift.”
      Thanks for reading, and for leaving a comment.

  4. I hate shopping for gifts and everyone who knows me knows this. I am also not in the least bit sentimental. I can show love. concern and thoughtfulness to the people in my life by spending time with them, helping them out etc. I have absolutely no qualms about giving gift cards or to the younger relaties cash. For those who prefer I make a donation to charity on their behalf. I hate comercialism and acculumating stuff. I hate waste. Apart from gifts of food items, sweets and alcohol I don’t buy gifts. Also I request that people don’t waste their money by buying me gifts.

    • Donna Freedman

      @Ash: Will you send me a gift card? Or cash? 🙂
      Thanks for reading.

  5. lostAnnfound

    I send cash to my niece & nephew who live about 1200 miles away. That way they can use it at a big-chair department type store or locally if they prefer. I buy gifts for the rest of the nieces and nephews, but it is getting more difficult at they get older to get something I know they want/need/would use. I can see where a gift card would be more beneficial in some cases.

    • Donna Freedman

      @lostAnnfound: I send cash as well as gift cards, depending on the situation. Sometimes I send cash during the year if I’ve paid my bills and still have some left over. The folks to whom I send it are always able to find a use for that $20 bill or $30 check. No one ever returns that kind of gift, if you know what I mean.
      Re “which gift to buy,” the wish-list idea at Amazon and other stores (virtual and real) is fiendishly clever, i.e., you will probably shop there because you know what your recipients want. Sure makes it easier.

  6. Oy! This whole argument about cash and gift cards. Are there really people who DO NOT want cash? Wha? I’ll bore you with two stories about Christmas (and birthday) money as gifts.

    My husband’s parents are in their early 80s and his mother is in declining health, hence, they do not go shopping (also, we live 2,000 miles away from them). My son was born 7 years ago and my in-laws send us money each year at Christmas and birthdays. My S-I-L found out about this and apparently started chiding my M-I-L for sending cash, telling her that was tacky. Fortunately, my M-I-L asked me about it. She asked me what we preferred. I told her that yes, indeed, cash was preferred and for two reasons. I would feel awful knowing that the two of them were out combing stores trying to find the perfect gift and then going to the trouble of mailing them. And second, my son does not get the boatload of gifts that their cash amount would buy him. A majority of that cash goes for buying clothes and shoes and other things to maintain a child. I told her all of this and she felt much better.

    The second story is my mother. She, too, lives in the same state as my parents-in-law and so her gifts involve shopping and shipping. My mother likes to buy gifts on the cheap and it shows. Every year for my entire life up until about 8 years ago I would get clothes I didn’t really care for and some other tchotchkes. In order to not hurt her feelings I always wore the clothes and found something to do with the other stuff. My younger sister never did this. She never hesitated to take back anything and everything my mother got her. The final straw was about 8 years ago when she sent a sweater that unravelled at the neckline the moment I tried it on (no kidding) and a sweater/shirt combo that was too small for my husband. Not to mention that every gift smells like cigarette smoke. This time I sent it back with a very loving note telling her she should make sure to get her money back. We’ve gotten only cash since then. I think she prefers this as she has arthritis and fibromyalgia and shopping makes her feel, physically, worse.

    And last, we do indeed send handwritten thank you notes, including my son.

    p.s., thank you for this moment of therapy.

  7. I love getting gift cards. I just wish I could convince my family that I really DO want gc’s to the grocery store and gas station. It would definitely help; I’m not good at budgeting in the toiletry type items into my grocery budget.

  8. I’m a college student, so I love love love getting gift cards and/or cash. Doesn’t matter to me! As long as its something I’m likely to use or where there is a store close by, and that I can get something there with the money on the card. For example, $10 at Starbucks or Subway can get me one or two subs or two or three drinks, but $10 at Best Buy, unless I’m saving up for something REALLY specific, doesn’t really do much because I can’t really buy something there with that amount.

    Also, with my siblings, we all exchange presents with one another, and we’ve said no gift cards because it would feel pretty impersonal and we know each other well and we all need tons of things.

    I don’t give gift cards often, but if I’m really out of ideas for a friend or gift exchange then I’ll stick to the Starbucks or Tim Hortons card because almost everybody I know goes there once in a while.

    • Donna Freedman

      @Marie: I bought a $10 Subway card for $5 from a daily deal site, because my hostess likes to eat there. Thus I was able to take us both to lunch pretty cheaply. A week later a bunch of Subway coupons ran in the paper, so we’ll likely go back.
      If you see any Subway/Hortons coupons with long expiration dates, maybe package them with the gift cards to stretch the present even further? It could lead to being invited out for a sandwich or for doughnuts and coffee. 😛
      Thanks for reading, and for leaving a comment.

  9. I think gift cards are an ideal solution for people you don’t see often, because you might have no idea what they actually need, want, or would use. I scored a big hit this year by sending an Olive Garden/Red Lobster gift card to my aunt & uncle (who are bearing 99% of the burden of looking after my grandma) after auntie casually referred to their “favorite restaurant” that someone else had taken her to for her birthday. I plan to send them another one for Christmas.

    I routinely pay my cat-sitter in Visa gift cards … because he confessed that cash disappears in a flash. 🙂

  10. “It’s the gift that keeps on giving, Clark.” Gotta love cousin Eddy. You could also use the gift card when it is “all used up” to scrape dishes.

  11. Ro in San Diego

    I love gift cards! I especially like when Albertson’s runs promotions on them. I bought a bunch of gasoline cards, airline gift cards, and Amazon.com cards this past summer and spent a bunch of money but I got a whole bunch of free groceries as an incentive!

    So, when my son went off to grad school in July and kept my checking account almost empty we had the gift cards to: purchase airfare for his friend who helped him drive 2,000 miles to his new school in Illinois from California, a gift card to buy all his books for the coming semester (used from Amazon.com) and I had plenty of gift cards to keep my car gassed up until my expenses normalized in October.

    To me gift cards for things we frequently use (groceries, gas, Amazon.com for student books) can be used as an emergency fund of sorts.

  12. I too am a fan of the gift cards. DD1 gets me gift cards for the “toys for big boys store”…aka Home Depot. Saves her time and I’m always sure to share what her card bought. I love buying the discounted gift cards from my CC companies for gifts as well as our own use. It sure makes that trip to Chili’s less painful when you throw down a $25 gift card reducing the total bill to $6.

  13. Christine W

    It’s all in how you present the gift card. I often will take, for example, a Starbucks gift card, put it in a mug filled with chocolates, and wrap it up in cellophane. Or a gift card to a cooking store can be tied up with a few wooden spoons. It shows you put some thought and creativity into the gift.

  14. My parents are quite adamant about wanting gift cards for restaurants for Christmas. They enjoy eating out, they don’t need anything (in fact, they are trying to get rid of stuff), and oddly enough it helps them with weight control. Really–they eat half and take the rest home and have it for dinner the next day. They have nice nights out and don’t have to cook or do the dishes. So they love them.

    I love getting gift cards as well, if they are for things I’ll use (Amazon, Barnes & Noble, a restaurant, etc.). My mother will sneak one in as a gift because she’s tired of telling me to spend the money she’d give me on myself–I would often stash it in savings, LOL. If I get a gift card, I have to spend it on myself (or I’m more likely to) and I will really enjoy it. If it’s to a restaurant, I can treat a friend and have a lovely night out (or I can have two nights out by my lonesome but I’m a little more social than that). If it’s to a bookstore, I can indulge in my book addiction. If it’s to a clothing store, I will have to spend it on myself and get a couple of nice things to wear (I am horrible about buying new clothes).

    Then again, I’m very unromantic and unsentimental about these things. Though honestly, if I had my druthers, I’d get nothing because Christmas gifts should be for kids.

  15. Hmm – my mother has actually asked for a Tim Horton’s gift card (Donna, I figure as a world traveller, you must have hit one in the states or Canada!) so she doesn’t have to dig for change or bring it along after her morning walk. And my nieces have asked for Wal-Mart gift cards – they get so much at Christmas that they’d prefer to have the choice to get something later. I’m also asking for a few. I freely admit it’s not as satisfying as a material gift to give or get, but I don’t see anything wrong in respecting someone’s wishes.

  16. Gift-card…, what an invention or just another coupon only this time you get pay for it at discount.

  17. Agatha Silverdragon

    When it comes to gift cards vs cash I must confess I’d rather give a gift card. After all I wanted to give the recipient something to enjoy that they may not necessarily purchase due to financial restraints. My DB and SIL don’t eat out very often and frequently on the very cheap; I give them gift cards to sit-down restaurants and they love them.

    Personally I would rather recieve a gift card than cash. A check goes into my checking account, becomes part of a whole, and, more than likely, spent on the water bill. Thanking someone for the lovely set of napkins you got at Bed, Bath, and Beyond comes a lot easier.

  18. I’m with Ash. I despise shopping and would rather clean public toilets than go to a mall. What little I buy for myself is done online or at a couple of thrift stores I visit at off-hours. For holidays and birthdays, it’s either homemade foodstuffs or gift cards for places I know the person likes.

  19. Hubby and I give our two adult daughters and son-in-laws gift cards individually because then we know they will spend the money on something they want instead of just paying the electric bill. Neither of my daughters spend much money on clothes and they are always happy to get a gift card to a high end department store so they can splurge on something they might not normally buy. I can’t be sure they aren’t buying socks for the grandkids or a waffle iron but hey, it’s their gift card and they can spend it any way they want. Both SILs have complex fields of interest (architecture and physics) and I wouldn’t have a clue what they are coveting. Their wifes tell me what companies to buy from and I happily comply. The result is that they all get what they want and nothing is wasted. I do buy actual gifts for the granddaughters but only after having received a list of desired objects from their parents. I am a minimalist at heart and prefer to never receive a physical gift, ever. Gift cards to invitations to restaurants or Starbucks are appreciated but unsolicited gifts usually are quickly dropped off at Goodwill.

  20. I like gift-cards. For example, my nephew is 6 feet 6 inches tall and 16 years old. I would never pick clothes out for him. So I get him a gift card and he can pick his own clothes. And one of my sons is a clothes horse, I would never pick clothes for him… He wants to know if pants make his butt look too big….. can’t shop for him..

  21. These are all good reasons for gift cards, I still like the gift ( just my choice).

    • Donna Freedman

      @Carrie: I like gifts, too. You should see what I’m giving my hostess this year. But since she reads the site, I’m not telling. 🙁
      Gift cards are just another string in the fiddle. For some people they work great; for others, well, get ’em the gifts.
      Thanks for reading, and for leaving a comment.

  22. I love getting gift cards. I don’t need any more stuff in my house so I have insisted on not getting any gifts this year. In the past my husband would get me a book store gift card and I was happy with that. It may not have been personal but it was exactly what most of my money would be spent on anyway.

    Gift cards are a big seller where I work. Many people will be receiving grocery gift cards, a very practical choice. Sadly some purchasers have asked if there is any way to ensure that the money is spent on groceries and not alcohol. One shopper already used her gift card from her grandma on cigars and rolling papers!

  23. I would never tell anyone, but I do hope I get grocery gift cards. I just cannot afford to buy meat. This would be a great gift.

    • Donna Freedman

      @Sharon: I send grocery gift cards to a relative from time to time, because they can be used for food or for gasoline. I think they’re a great gift, too. Hope Santa brings you some.
      Thanks for reading, and for leaving a comment.

  24. One of my coworkers has several grandchildren. To save herself time and hassle — and to save her grandkids any disappointment — she gives all gift cards. She loves them, but she also hates guessing what to get them. And, this way, they get themselves exactly what they want.

    People should remember that sometimes actually using the gift card is fun in and of itself. You get to look at all the cool stuff you could get, then whittle it down to one or two really choice items. Or, alternately, you can use it to defray the cost of something you could never afford otherwise.

    And, as some folks have observed, giving a GC helps ensure that the gift is spent on something specifically for the recipient. Cash or check gets lumped into overall totals for budgeting. But a gift card forces them to buy something nice for themselves specifically. (Or, if the store isn’t their cup of tea, it at least defrays the cost of a gift for someone else, I suppose.)

    Finally, gift cards are great to make people indulge themselves in a small way they normally wouldn’t. Logically, I know that iTunes are only a buck or so each, but I really hate spending on bits of data. Especially when they can add up so quickly. So I asked for an iTunes card this year, which I’m pretty sure my MIL is fulfilling.

  25. I live in a small town and the only national chains are Safeway and McDonalds. Don’t want a gift card to those! I’m sure I would use the Safeway one, but it wouldn’t feel like a treat. And I bought gift cards for nieces and nephews last year from two national chains, and a regional one. The regional one and Pottery Barn will not stop stop inundating me with catalogs even though I have requested it several times. I will not be doing those as gifts again, ever. And yes, I know I could use gift cards online but that seems more like a chore than a gift to me.
    I’m all about handmade Christmas, whether the giver made it or bought it from an artist/craftsperson and consumable gifts are the best. Don’t need more mass-produced junk!

    • Donna Freedman

      @Jenny: Does the Safeway sell gasoline? The Safeway cards I send to an Alaska relative get used mostly to put something in her gas tank shortly before payday.
      Or try this: Use a $50 Safeway gift card to go in and buy two $25 gift cards to those national chains for your nieces and nephews from the Safeway “gift card mall.” You don’t need to use an e-mail or physical address, so you won’t be pestered.
      Re handmade gifts: Reviews are drifting in for both the ADN moose calendars and the homemade sea-salt caramels. Universal raves. I may give up sending homemade jam and substitute caramels and/or other candies (except to a select few relatives, who will get both).

  26. I like restaurant and/or gas (station) gift cards. They result in no more “STUFF” being brought into the house. Leftovers don’t necessairly count as stuff, btw. 🙂

    • Donna Freedman

      @Kelly C: Leftovers don’t last long enough to be considered “stuff.” 😛

  27. I make my own cards from scraps of paper and material that I find. Then I make certain the person gets the top dollar that I can budget and I place it in the card with a loving thought.
    For example for my son I might right I was going to buy you such and such but I thought you might like to pick for yourself as I am not certain as to your favorites any longer. So they realize what I had my eye on for them and they get every penny I can afford and with the skills I taught them growing up they put a coupon or some points or a gift card with the cash and add some of their own and they can get the top dollar items they want ! It is a win for all. I put every penny I would have put into a card in the envelope too! So I stopped spending $5.00 for the right card at Halmark as well. They get every 1/4 of a every penny I can afford for the celebration.


  1. Underdog Or Favorite – Blog Review | Financially Consumed - [...] And Thriving explains Why Gift Cards Work. It’s difficult to argue with this [...]
  2. Straight Talk on Debt: Financial Values & the Holidays - [...] Why gift cards work. @survivngthrivng "I love looking for the perfect gift, whether it comes from a rummage sale…
  3. Christmas gifts « Grumpy rumblings of the untenured - [...] people talking about giftcards and cash… are they tacky, are they appreciated, and so on.  Here’s Donna Freedman on…
  4. Gift Card Exchange Day: A chance to fix Christmas. | Surviving and Thriving - […] Why gift cards work […]
  5. Discounted gift cards: The new coupon? | Surviving and Thriving - […] Why gift cards work […]
  6. Forget the flowers — Mom wants a massage. | Surviving and Thriving - […] to the spa day, the moms also jonesed for “weekend getaway with the whole family” (32 percent), gift cards…
  7. Giveaway: Two $25 gift cards, via Swagbucks. | Surviving and Thriving - […] time I give away a gift card the response is tremendous. And why not? Although some people think that…
  8. 13 ways to use unwanted gift cards. - Surviving and Thriving | Surviving and Thriving - […] Why gift cards work […]
  9. Winter salsa. - Surviving and Thriving | Surviving and Thriving - […] Rewards credit cards: I cashed in for a slew of gift cards and wrapped ’em up, since my family…

Leave a Reply

Your email address will not be published. Required fields are marked *