The holiday mood and cheer is already in our midst and people are starting to troop stores for their Christmas shopping. One gift idea that is staging yet another come back this time of year is the gift card. Gift cards traditionally rank high in the wish list of Americans. According to a survey conducted by the National Retail Federation, gift cards are the top gift ideas for Americans this year. Close to 55% of adults said that they would like to receive gift cards as presents this holiday season.
The novelty of gift cards is that people do not need to worry about picking the wrong present since recipients can very well spend them on items that they prefer and want. So both the gift-giver and the receiver emerge as winners in the end.
There are a few downsides to gift cards and one according to critics is that it lacks "personal" touch. It may seem that people who buy gift cards do not exert a lot of effort in finding the perfect gift for their intended recipient and just opt for convenience. Another drawback is penalty fees. If a gift card is not spent within a prescribed period of time, it can be voided or an amount may deducted from its original face value. In reality, a lot of gift cards go unspent as people misplace them or just forget to spend the cards.
New legislation, however, has imposed restrictions on some gift card policies such as expiry dates and late fees. The proposed bills, which would take effect on February 2010, forbid companies from voiding gift cards that are less than 5 years old. Businesses are also not allowed to charge penalty fees for gift cards that have remained unspent for under a year.
Industry experts, however, caution consumers of the potential hazards and risks of gift cards. An economics professor, Sue Lynn Sasser, advises people to just buy gift cards that are sold over the counter by store personnel. She said that shoppers should be cautious about purchasing off the racks since the bar codes in gift cards sold in these sections can be tampered or duplicated. She also recommends reading the terms such as inactivity or balance inquiry fees.
Stores see gift cards as highly profitable products since many go unspent. Sasser advices people to spend gift cards right away and to not put off using them.
Some innovative companies have put some spin into their gift cards. Target for example has a gift card that is enjoying immense popularity from customers. It is a gift card that doubles as a remote control that is used to manipulate a toy mouse in a shopping cart.