Handing out gift cards is very popular during the holidays; however, it may not be the best idea during a recession. It seems shoppers are catching on to this idea. According to a report by TowerGroup, sales are projected to drop by 9 percent in 2008.
But why do experts recommend shoppers shy away from this gift idea during difficult economic times? Here are a few reasons:
• Gift cards typically don’t go on sale. Unlike merchandise, it’s not easy to find a gift card on sale. So if you’re more price-conscious this season, it’s a good idea to pick out some thoughtful items on your own.
• It’s cheaper to send cash or checks. Unless you find tax-free gift cards online with free shipping, you are more than likely going to have to spend a few extra bucks for your card. In times where penny pinching is essential, it might be better to just send cash or a check.
• Retailers are going out of business. For those retailers filing for bankruptcy, card funds may not be redeemable – a risk probably not worth taking.
• A card expires, money doesn’t. You can bet that if you hand someone cash, it will be spent. However, gift cards get lost, stolen, or sometimes expire – a potential waste of money that a price-conscious shopper may want to avoid.
If your goal is to get the most bang for your buck this holiday season, you might want to try other alternatives to gift cards like clothes, jewelry or even a gift basket. You may find that your loved ones actually appreciate their gifts more knowing that you put thought into what they might like.
