Gift cards or cash, which one makes a better gift?
Historically, a gift card is my gift of choice, both to give and to receive.
However, a couple of recent situations have made me question whether a gift card is automatically the best option.
This past summer, as I was sweeping my room, I swept up what I assumed was an old gift card. On impulse, before I tossed it, I called to check the balance. To my surprise, it was fully loaded. It had been lying who knows where for who knows how long! If I had thrown it out, it would have been, literally, money in the bank for the company that issued it.
When I want to give someone a gift of their own choosing, I automatically reach for a gift card.
However, I’ve been pondering, is giving a gift card really a better choice than giving cash?
Cash or gift cards, which makes the better gift?
There are advantages and disadvantages to both gift cards and cash.
Gift Cards
What are the advantages of giving a gift card?
Most of us automatically opt for giving a gift card. There are some definite advantages to giving gift cards.
Purchasing a gift card is easy and convenient.
Assuming you know from where the recipient would like to have a gift card, picking one up is usually quick and easy.
A gift card helps ensure the gift remains a gift.
If the intent is to give a gift instead of paying for an everyday expense, a gift card helps ensure that happens.
I say helps because there are sites that allow you to sell, and buy, unwanted gift cards at a reduced rate.
Buying something for yourself on someone else’s dime is a treat.
It’s a special treat to go shopping or to a restaurant knowing there will not be a hit to your own budget.
What are the disadvantages of giving a gift card?
Gift cards are a popular choice in gift giving. Unfortunately, the disadvantages are rarely considered.
A gift card imposes limits.
A gift card can be used only at the retailer for which it was purchased.
Despite your best intentions, the card may not match the likes of the recipient.
A gift card may remain unused.
According to a quick online search, the average American has one unused gift card.
There is a total of 23 BILLION DOLLARS (read that number again!) of unused gift cards in circulation.
If a gift card is tucked away and forgotten, you have given a gift to the company and not the person for which it was intended.
Lost gift cards are difficult to replace.
Unless detailed purchase information can be provided, chances are you are not going to be able to replace a lost gift card.
True story: A friend of mine was saving for a Disney vacation by purchasing Disney gift cards. She accidentally threw away a five-hundred-dollar card with no way to provide verification of the purchase.
Despite what you think, gift cards are not a good option for mailing.
Mailing a gift card is no different than mailing cash.
Mail goes missing every day and if a gift card is lost or stolen, see above.
True Story: Our oldest daughter mailed a gift card to her cousin for a baby shower. The card never made it to her cousin, and she had no way to recoup the funds.
Many gift cards will expire or lose their value.
Many gift cards come with an expiration date.
While some states have laws against gift cards and gift certificates expiring, there are no laws against imposing service charges on unused balances after a period of time.
If the company goes bankrupt before the gift card is used, sorry about your luck.
You can get in line with what will probably be a long line of creditors. If you recoup any money, it will probably be very little.
While this is more unlikely with a large retail store, it is more likely with a small local establishment.
Hint: Don’t save gift cards for a rainy day. Use them asap.
Some gift cards charge a fee to purchase.
No words on this one.
If you want to give someone money, just do it. Don’t pay extra to give them money on a gift card.
The receiver will likely have to register the card as well.
Give some serious thought to the disadvantages of giving a gift card.
Cash as a gift
What are the advantages to giving cash?
Like a gift card, cash is easy and convenient to give.
Giving cash requires only a trip to the bank or ATM to get the gift.
A check is even more convenient, at least for the giver.
If you don’t keep a check register make sure to check your bank account to make sure the check has been cashed.
Consider this: It was several years before my coworker realized her nephew had never cashed the checks she mailed for Christmas and birthdays.
Cash is universal.
Cash can be spent when and where the recipient wishes, making it a truly special treat.
Gifts of cash can be combined.
Multiple gifts of cash can be combined to make a purchase that wouldn’t have otherwise been affordable.
There is no expiration date with cash.
Cash can be tucked away with no pressure to spend based on a looming expiration date or impending service charges.
Gifts of cash can help cushion a financial challenge.
Although it may not have been the intent of the giver, a gift of cash is a blessing to someone struggling financially.
What are the disadvantages of giving cash?
It’s easy to spend cash on everyday expenses.
Cash as a gift can very easily become just cash for everyday expenses.
Cash should not be mailed.
Although there may be a shot of replacing a lost gift card, cash that goes missing will stay missing.
Don’t take the chance.
Again, if you want to mail cash, write a check.
There are some limited times where cash is probably not appropriate.
There are times a gift of cash might not be appropriate.
If someone has a history of making bad decisions in using money, a gift of cash may not be the best choice.
Gift cards or cash, which one makes the better gift?
Both gift cards and gifts of cash have distinct advantages and disadvantages.
Whether one is better than the other will depend on the occasion and the individuals involved.
According to Brian, cash is king. Going forward, I will lean toward giving cash and not gift cards.
I envision in my mind an envelope that states, “your choice”.
Which, if I guess correctly, will make my family very, very happy!
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