If you are considering the purchase of gift cards this holiday, you may want to stop and think twice.
We have seen more and more companies closing their doors and going out of business. The prognosis is that more retailers and restaurants will be going out of business due to the strain of the economy. If this happens, then what happens to your unredeemed gift cards? Right now, your gift cards becomes void, when the company goes belly up!
There are currently no government regulations on how defunct companies must handle unredeemed gift cards.
So, a gift card to a loved one may be a risky choice.
I am attaching a link to consumer advocate, Clark Howard's website.
This holiday season be cautious with your hard earned cash!
As a footnote, if you do choose gift cards, be careful, some cost money to purchase (which I think is ridiculous). And some begin to lose value after a certain period of time.
This article is authored by Sandy Shores, Melbourne FL REALTOR.
It is the exclusive property of, and may not be used without the written permission of Sandy Shores, Brevard County, Florida Space Coast. All information is believed to be accurate, but is not warranted. Copyright 2008.
that for you
Sandy
If one likes giving the gift card (less hassle thinking of what to buy), the alternative is to give a gift card from the Mall itself, and the card can be used at any store still in business at the mall. Right?
I do give a few gift cards to my daughter each year, knowing I can't really buy clothes for her. I guess I need to maybe just give her cash to buy clothes with this year. I'd hate to spend the money of a gift card just to have the store in her area close. Most of the Circuit City stores in Georgia are closing. I guess with the economy you never know who's doors will be closing next.
Give a cash card that is good anywhere, like an american Express cash card or a Visa debit card rather than a store specific card.
Just as an aside - I wonder if the "economy" isn't as much to blame as it is the fact that many areas are OVERSATURATED with stores and restaurants.
I've seen several places go out of business that I never even set foot in - because I didn't need to. I have no reason to go to Smokey Bones when there's at Texas Roadhouse right there that I like. (Actually I've never been to either of them but just used that as an example.) I also wonder how much of it is due to poor management, poor customer service, poor store / restaurant appearance...
I know if the movie theater near me goes under, everyone will find ways to blame George Bush and the war in Iraq for it - but frankly, I refuse to go there because it's a dump. LOL
Sorry, this is off topic; I was struck by the line in your post "more retailers and restaurants will be going out of business due to the strain of the economy."
The restaurants are suffering too and may be out of business in the near future. Be careful of restaurant gift cards as well.
Personally, I feel gift cards are very unpersonal anyway. When giving a gift card, people feel more obligated to give more so it doesn't seem like such a small amount, but it's usually easier to find a gift for less. Many people will give $20 gift cards to kids, however, there are hundreds of toys under $10 and that could have saved some money with making the gift personal.
when you're shipping presents cross country, it's a lot cheaper to send gift cards, even if you have to spend more - the last time I sent a box of stuff to my brother in seattle, it ended up costing me over $30 just to send the box.
Hi there,
So true, last year I got burned on three of them.
Sandy,
Not funny but the fact that I was going to post about the same thing is funny.
Ann
Sandy - I had already bought your gift card but the business has already folded. Sorry. Guess next year I will send some fish. :-D
It is toubling that businesses are folding in this economy. This is a good warning.
Hi Pacita - Good thought to buy a mall gift card. The only problem that I have run into with them is that the last time I went to buy one at our local mall, they wanted to charge me $2.00 and they start losing value after a specific period of time.
Hi Tammy, Yes the Circuit City store is closing in our area, too. I think we're probably going to need to be very careful this year!
Hi Karen, I agree that in some areas there is an oversaturation of stores and restaurants. And, I also agree that both can go under for a multitude of different reasons - poor service, poor management, poor location, running out of funds, etc. - good point!
Hi Linda, Agreed, we must be cautious of restaurant cards.
Donna, I never really thought of it that way-that people spend more on a gift card because it seems like a small amount - but if you're a budget shopper you can find many gifts for less money. Thanks for the input and a different perspective on it!
Hi Karen, I would imagine that shipping costs could get quite expensive - so true!
Lynda, Ouch - I hate to hear that you got burned on 3 gift cards last year! That's not good at all!
Hi Miss Ann, Well, I guess you were going to post on the same topic, because great minds think alike - LOL! I don't think that we can stop reminding consumers about this. Go ahead and write your post. Or, wait a week and write. Everyone doesn't read all the same info. Take care!
Fred, Well that saddens me. I was expecting that gift card from you. Don't worry about it, just go out and get me something else - that will be fine. I will even understand if it arrives a couple of days late. I'll forgive you!
Sandy,
Yes, great minds think alike..... I thought it was very funny.
Ann
This is scary. I usually buy gift cards for my pre-teen cousins since they go from being all about Joe Jonas one minute to Hannah Montana the next, and they love to go shopping with 'their own money.' I guess I can get them a Visa pre-paid debit or an AmEx gift card or maybe I will just have to get up to PA and take them shopping myself.
It is ridiculous that gift cards start to lose money after a period of time. A lot of gift cards never even get redeemed so they make money on those anyway. 'Tis the season!
Hey Jenn, It is ridiculous - sorry to be the bearer of bad news. But, it is something we must be aware of! Like you mentioned - I am hearing that people are shifting to prepaid debit cards. I really don't know anything about them. Best of luck in figuring out what to do! Take care!