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Save Your Money -- Give Cash not Gift Cards

Kim Griffiths -- While gift cards have become a convenient and normal part of gift giving, be aware of expiration dates, user fees, service charges, and other restrictions that may end up costing you more than you realize.

Best Buy reported a $43 million gain in revenue in 2006 due to unused gift cards. This is just one example of why you should save your money and give cash, not gift cards.

Gift cards have really started to become a normal part of gift giving. Whether it's a bridal shower, wedding present, birthday for him, birthday for her, a graduation present, or an anniversary, there's a gift card for that.

There are now complete gift card kiosks at stores where you can buy gift cards from nearly every large retailer, prepaid calling cards, etc. making gift giving an impulse purchase. Drug stores, grocery stores, gas stations, and even locally owned beauty salons now offer gift cards. Record sales of gift cards continue to top the charts more and more each holiday season. At least if you receive an American Express, Visa, or MasterCard gift card you can use these almost anywhere. But, if you buy a gift card to a Home Depot, Best Buy, or Target, you don't have that flexibility.

As a recipient of these gift cards, we are excited about the prospect of what we will purchase. But, retailers are counting on you forgetting about the gift. These small plastic gifts accumulate in wallets, drawers, or are unintentionally thrown away when the party is over.

Retailers are banking the profits. Millions of dollars go unused every year padding the revenue of these retailers.

Some interesting usage trends:

-- Grocery store and gasoline gift cards are used the most but cards from retailers are often forgotten.

-- When a card is used, the buyer typically buys more than the card is worth making up the difference in cash.

-- It is estimated that 6-10% of gift cards will go unused.

If you don't know what to buy someone for a gift, cash is still a one-size-fits-all welcomed gift. And, best of all, cash doesn't have an expiration date, user fee, and service charges like most gift cards are now doing.

Be creative with the gift of cash, consider going to the bank and asking for $2 bills or the entire gift in singles. A new one hundred dollar bill or fifty dollar bill also makes a large impact. If you are having to mail the gift, be sure to send a check instead of cash. If it's misplaced you at least can stop payment on the check.

When you are a recipient of cash, it is a nice gesture to let the person who gave you the gift know what you bought. They want to know that you spent the money for something you wouldn't normally buy.

For example, if you are a newly married couple and receive cash from someone, send a thank you card that says their $100 gift went to pay for the champagne toast, or the honeymoon dinner. It's nice to make the gift tangible so that the giver knows they contributed to your happiness.

If you aren't going to use a gift card that you received, regift it. At least let someone use the money instead of allowing the gift card to expire. Many charities can now transfer unused cash from gift cards that you may donate. Whatever you do, don't let these gift cards go unspent.

About One Paycheck at a Time, Inc. One Paycheck at a Time Inc. is the leading source for sensible debt reduction solutions. Its products include the One Paycheck at a Time paperback (ISBN: 1591133327), as well as an ebook format, and the eTools program. The author of the book and president of the company, Kimberly A. Griffiths, has been through the vicious cycle of debt herself and has made it her personal goal to share her experience to help others. More information can be found about the company and its products at

© 2007 Kimberly A. Griffiths

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