Post Holiday Shopping and Impact of Gift Cards

I hope every person that received a holiday gift card redeems it for every cent it was worth. Someone cared enough to give a cash equivalent gift for their friend or family member to use in the best way they needed. Merchant gift cards are paid for in advance by the purchaser. Any amount that is not redeemed or is value reduced by time is a free dollar into the merchant’s pockets.

Gift cards are a great convenience if they are given for a store where the recipient frequently shops. They are easier to use than checks, safer to mail than cash, and pack more value than an unwanted or unneeded gift. Merchants benefit the most. Gift cards put money in the merchant coffers, require recipients to shop in their stores, and if unused are free money. Retailers hope gift cards do not get used.

Some drawbacks are reduction in value imposed by the merchant. A prime example would be a gift card reduced in value because it was not used within 30 days. Wait too long and the $100 gift card may be worth only $90, Wait longer and it is worth less.

The recipient is limited to new purchases up to the balance of the card. If you spend it all it is fine, but if you don’t, there is no cash returned on the balance. The balance may be applied to another purchase the next time the customer is in the store.

Some merchant check-out personnel are reluctant to reveal the balance, if any, when the card is used for purchases. If funds are still available on the gift card, it is not uncommon for the recipient to be unaware and not use the card for its full value. Gift cards may only be redeemed at the same store or chain of stores.

Walmart customers have been slower than usual to redeem gift cards. Gift cards were used to purchase more grocery items and gasoline. I looked at the merchandise Walmart had in stock for the holiday season. Given a Walmart gift card and no choice about where I could use it, I would buy food or gasoline. If I had money for other than survival items after making that decision, then I would buy at a store with better merchandise.