Channel 19

Todd Dills

Looking a gift card in the mouth

| November 27, 2007

The increasing tendency of shoppers to give gift cards as Christmas presents — or, as some cynics would argue, iinstead of Christmas presents — is hurting trucking, as Bob Costello, the American Trucking Associations’ chief economist, noted in October in this eTrucker story

The fall bump in demand related to holiday spending has greatly dissipated, said Costello, who argues that the rise in popularity of gift cards has pushed more purchasing into January and February at the expense of November and December.

According to this National Retail Federation survey, 57 percent of Americans this year have gift cards on their shopping lists. In another survey, however, 91 percent of gift-card givers said they’d prefer to receive an actual present themselves, thanks just the same.

To add insult to injury, 10 percent of the gift cards sold in 2006 — $8 billion of the $80 billion total — went unspent, reports iParade magazine in its Nov. 25 issue.

While that $8 billion includes some cards that are thrown into a drawer and never seen again, most of the sum is the aggregate result of the small amounts left unspent on each card — since most people don’t think using, say, that remaining $1.75 is worth another purchase, or another trip to the store. (There ought to be a word for such leftover amounts, the plastic version of loose change.)

Other reasons to think twice before giving gift cards, according to iParade:
LIThanks to inflation, the buying value of the card is generally less when activated than when purchased.
LIMany gift cards carry hidden fees, expiration dates or restrictions. (My wife, for example, vainly tried for months to use a Famous Coffee Shop gift card, only to be told at each Famous Coffee Shop location, “>Sorry, our franchisee doesn’t honor those cards.”)
LIMost retailers won’t replace a lost gift card.
LIIf a recipient doesn’t enjoy shopping in the first place, she won’t enjoy it any more with a gift card. She’d rather you just bought her something.
br Parade might have added another point against gift cards:
LIThey’re unfair to truckers!