Three Things You Should Know About Gift Cards

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Who’s the biggest fan of gift cards for special occasions like birthdays, anniversaries and Christmas?

If you guessed your spouse, children, grandchildren, co-workers, friends or business associates … you’d be wrong.

They may like them but the number one fan of gift cards is the retailers who sell them to you.

# 1 Thing You Should Know—Last year, gift card sales hit nearly $80 billion (that’s right, BILLION) and roughly ten percent of that amount, $8 BILLION was NEVER USED.

You would never knowingly pay for an item and leave the business without the product you purchased. But basically that’s what’s happens with a lot of gift cards.

It’s reported that last year Home Depot and Best Buy both added an additional $43 million to their bottom line because of unused gift cards.

# 2 Thing You Should Know—Your gift card becomes immediately worthless if the retailer files for bankruptcy. Gift cards are treated as loans to the company, not cash, so a bankrupt company can refuse to honor them.

Just ask The Sharper Image customers who lost a total of $62 million in gift cards from the retailer. Of course, you can now add Bennigans to that list.

# 3 Thing You Should Know—If you lose or misplace the card, you’re out of luck because there is no way to get a replacement. Kudos to Starbucks; they register their cards and a lost card can be replaced with only a slight fee.

Bottom line – give some thought to the recipient before you buy them a gift card. It may seem like the perfect gift but you want to be sure it’s their “fave” restaurant or they “love” to shop that department store before you bless them with a gift card.

A word or warning…when purchasing a card from a rack of cards like they offer in the grocery and pharmacies these days, choose one off the bottom of the stack. There are thieves who copy down the activation number from cards hanging on the rack and then use them to purchase goods online where it can’t be traced.