Three Reasons to Avoid Gift Cards This Season
Submitted by Randy on Tue, 11/11/2008 - 16:42.
Tagged: Basics
• Personal Finance
Gift cards are more popular than ever. In 2007, it's estimated that $97 billion of them were purchased. And the reason for their popularity is simple: Of those that purchased gift cards, 85 percent wanted the recipient to be able to select their gift and over half had did know what to buy.
But there are several downsides:
- Expiration – Some cards expire or are subject to administrative feeds after a set period of time – usually 18 months. This directly erodes the recipient’s purchasing power over time.
- Inflation – Unlike cash, which can earn interest while sitting in a savings account, gift cards do not accrue interest over time. This means that inflation will slowly eat away at the purchasing potential of gift cards if not used immediately.
- Risk of Bankruptcy – If the issuing retailer files for bankruptcy, then it’s likely that the gift cards they issued will lose their value. This happened within the last couple of days for holders of Circuit City gift-cards. And happened last year with Sharper Image gift cards. In the case of the later, Sharper Image wrote off about $62 million worth of gift cards. Ouch.
There is a simple way to avoid all of these potential pitfalls, however. Simply give cash in lieu of a gift card.
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Hi Randy, I'm emailing you
Hi Randy,
I'm emailing you in regards to an email I sent to you last month about a partnership, have you had a chance to think about it?
If you have any questions or would more information, please advise me and we can go from there.
Kind Regards,
Andrew Knight
Judging from your IP...
Check your email.
Avoid Gift Cards post
It is probably a wise decision to really be careful on your spending, especially now, as the world is predicted to be in a deeper financial mess the next few years.
Elisheva Wiriaatmadja
http://www.myloansconsolidated.com