Special offer

Flushing $8 BILLION Down the Toilet This Holiday

By
Real Estate Agent with REMAX Distinctive Real Estate, Inc. VA 0225060562

I typically put together a handmade basket of "goodies" for my clients after they close on their home.  I figure it's something they will use and even if they've forgotten about me long after it's gone, it's something they can enjoy right after their purchase.  On occasion, I've considered getting a gift card.  But am I throwing my hard-earned money away?

 Considered a great "green" gift, gift cards have become the the top gift choice for the hard to shop for recipient - especially during the holidays.  Advertising Age reports, "Once regarded as an option for the lazy, inconsiderate or time-starved, gift cards are expected to reach $100 billion in sales this season." 

This year BizReport commissioned Deloitte to conduct an Annual Holiday Survey.  They found that 69% of holiday shoppers are expected to purchase gift cards, up from 66% the previous year.  "Clearly we want them," said Stacy Janiak, Deloitte's U.S. retail leader. "They're the No. 1 gift because people want to receive them."

Hmmmmm, do we want to receive them or do we want to give them?  That is the question.  It would appear if such a large number of recipients are not redeeming them then perhaps they are not what we all want.

In an effort to educate consumers, Consumer Reports took out a full page ad in the New York Times this Tuesday.

"We've gotten a lot of complaints from readers recently about them, and it's clear that an enormous amount of money is going to waste here," says Greg Daugherty, the magazine's executive editor.

With a whopping estimated $8 billion worth of gift cards given last holiday season still not redeemed, could it be the wrong gift?  It would appear so.  

Consumer Reports surveyed gift card recipients and the results showed that 27 percent have not used one or more of the cards they received last year. The reasons vary:

  • 58 percent didn't have time
  • 35 percent couldn't find anything they wanted to buy
  • 32 percent forgot about the card
  • 4 percent tried to redeem the cards too late - they had expired
  • 3 percent said the cards were lost

The financial-services research firm TowerGroup estimated that of the $80 billion spent on gift cards in 2006, roughly $8 billion were never redeemed - "a bigger impact on consumers," Tower notes, "than the combined total of both debit- and credit-card fraud."   This same group estimates that $100 billion will be spent on gift cards for 2008.

Retailers contend that the unused cards are not automatically credited to the institutions issuing the cards. "In most states, if a gift card is not used within a few years it is considered unclaimed property, and the retailer must give that money to the state. "

"It's not leftover money that most retailers can put in their pocket," says Ellen Davis of the National Retail Federation.

Consumer Reports sees this as a clear advantage to the retailer because they can invest the money spent on the gift card until it's used to buy something. "It's not a good thing for consumers regardless of where the money happens to be on the accounting ledger," says Daugherty. "It's a winning proposition for stores all around, but not for consumers."

Clearly, Consumer Reports sees bank issued gift cards as the most costly to consumers. "The terms and conditions of bank-issued cards vary widely, even among those with the same credit-card logo. That makes it difficult for card givers and recipients to know exactly what they're getting. Compounding the problem is that it's not always clear where to look for information--on the card, on the packaging, or on the issuer's Web site."  Consumer Reports

Do we have so much dispensable income that we can afford to throw our money away?  Well, I certainly don't!  Think long and hard before you spend your hard earned money on a gift card this holiday season.  It could end up sitting at the bottom of someone's old purse or worse - in a stranger's pocket!  It might have been a better idea to give cash.  Green goes with EVERYTHING!

Additional Source:  MSNBC.com "Look this gift horse in the mouth"

Target Gift Cards - have no fees and do not expire - ever. Thank you - Debbie Cook! Updated

Irene Morales Ward, Northern Virginia Real Estate

Posted by

  Irene Morales Ward

Realtor, e-Pro

703-732-8364 Cell

IreneWardRemax@gmail.com

Personal Website

Search the MLS for Listings

Like me on Facebook!

Follow me on Twitter!

Licensed in Virginia

Serving Arlington, Alexandria, Fairfax, Loudoun, Prince William, Stafford, Fauquier and Spotsylvania Counties

 and Fredericksburg, Falls Church, Fairfax and Manassas Cities and Surrounding areas

I’m NEVER too busy for your referrals!

 RE/MAX Distinctive

1307 Dolley Madison Blvd

McLean, VA 22101

LEGAL DISCLAIMERS: Any communication provided to you regarding specific mortgage products is for informational purposes only and should not be relied upon by you.  Neither REMAX Distinctive Real Estate, Inc. nor Irene Morales Ward, Realtor® are mortgage lenders and so you should contact the entity providing the specific mortgage product(s) directly to learn more about its mortgage products and your eligibility for such products.

 

 

Keith Neeley
ReMax New Horizons - Orange, VA
RE/MAX New Horizons
They are a great marketing idea however, Selling air in $25 increments.  Brilliant.
Nov 15, 2007 12:39 AM
Kelly Sibilsky
Licensed Through Referral Connection, LTD. - Lake Zurich, IL

I think gift cards are simply just like any other gift...some gifts end up in the back of a closet never to be used again no matter how thoughtful. I personally like getting gift cards, because I will use it to treat myself...while "real" money will probably end up as my kid's lunch money! It's amazing how many go unredeemed, though. Thanks for sharing.

Nov 15, 2007 12:41 AM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

If anyone wants to get rid of the gift cards that have not expired, they can send them to me.  I love gift cards and I use them.  I just try to use anything that will expire as soon as possible.  Even if there is not something I want at a particular store, then I can use it to purchase a gift for someone else.  I am surprised by the numbers that don't use them.

Nov 15, 2007 12:45 AM
Irene Morales Ward
REMAX Distinctive Real Estate, Inc. - Stafford, VA
Realtor - e-Pro - Northern Virginia Real Estate

Adam - I heard about it yesterday and thought I'd do a little more research.  Amazing, isn't it?  $100 BILLION dollars in sales?  If they are saying that 27% don't use them that the math is easy...It's possible $27 BILLION will go unused this year!!!!  CRAZY!

Chris - I wouldn't laugh at you!  How do you think I got the idea? :-)

Nov 15, 2007 12:46 AM
Irene Morales Ward
REMAX Distinctive Real Estate, Inc. - Stafford, VA
Realtor - e-Pro - Northern Virginia Real Estate

Debbie - Clearly there are advantages to the retailer's card over the bank cards.  It's great that Target cards never expire!  I'll research it and add that as an update to my post - you'll get credit, of course!

Keith - "Selling air!"  Love it!

Kelly - You're obviously in the majority.  But as the giver, it's important to know your recipient's needs/wants - as with any gift you give.  It's supposed to be about them - not making it "easy" for the giver.

Joan - Very funny!  I'm not a "shopper" and a gift card then becomes a chore for me.  I'm part of the 27% who might just forget it's in my purse! FYI....for anyone thinking about buying me a nice Christmas gift this year - no gift cards please! LOL

Nov 15, 2007 12:54 AM
Sandy Nelson
Riley Jackson Real Estate Inc. - Olympia, WA
your Olympia area Realtor

Irene, your post really mad me think. While gift cards are convenient to give, what a waste if they're not used. I myself have a few unused gift cards laying around the house. Now if there could only be a program that would automatically gift any unused portion of a gift card to charity, one could feel much better about the whole thing.

Sandy

Nov 15, 2007 01:27 AM
Irene Morales Ward
REMAX Distinctive Real Estate, Inc. - Stafford, VA
Realtor - e-Pro - Northern Virginia Real Estate
Sandy - Highly unlikely given the unknown amounts.  Target, for example, while they don't have any fees or expiration dates, is benefiting by using those funds to invest in something else until they are redeemed.  They are making money hand over fist that way.  It's using your money to make more money...for as long as that card isn't used.  Makes you think, huh?
Nov 15, 2007 01:35 AM
Dawn DeGroff
Fredericksburg Realty, Inc - Fredericksburg, VA
Irene - I agree...I dont really like the gift card idea very much.  With as many kids as we have, it is a chore to go to all the stores just so they can search for whatever it is they don't need or want.  I told my mother in law to please send either a gift or check.  I'll never forget the Christmas on of my daughters got a $50 gift card to Claires...we spent a looooong time picking things out of the 25 for $5 bin.  Never again!
Nov 15, 2007 02:06 AM
Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital
While I've used gift card and gift certificates that people have given me, I can't bring myself to give them to family members or to clients.  I had heard that a lot went unused, but I hadn't realized how much!  
Nov 15, 2007 02:16 AM
Irene Morales Ward
REMAX Distinctive Real Estate, Inc. - Stafford, VA
Realtor - e-Pro - Northern Virginia Real Estate
Dawn - My condolences! 5 minutes inside Claire's with a preteen is cruel and unusual punishment!! My heart goes out to you. Your mother-in-law must have been mad at you that year! LOL Patricia - I agree, I think it's a no-brainer gift. My older kids ask for CASH....again, green and it goes with everything!
Nov 15, 2007 06:07 AM
M A
Boston, MA

Hi Irene,

I like getting gift cards rather than a gift that I may or may not use.  I know that I have a bunch of cards lying around that have a few dollars left on them, but I did buy something with the rest of it that I either use (or ate).  I also get my cards from a local charity that earns anywhere from 5% to 15% on each card they sell.

I know alot of people that don't like them... but please... buy me some!!!

:-)

Nov 15, 2007 11:07 PM
M A
Boston, MA

Hi Irene,

I like getting gift cards rather than a gift that I may or may not use.  I know that I have a bunch of cards lying around that have a few dollars left on them, but I did buy something with the rest of it that I either use (or ate).  I also get my cards from a local charity that earns anywhere from 5% to 15% on each card they sell.

I know alot of people that don't like them... but please... buy me some!!!

:-)

Nov 15, 2007 11:08 PM
Irene Morales Ward
REMAX Distinctive Real Estate, Inc. - Stafford, VA
Realtor - e-Pro - Northern Virginia Real Estate
Martin - My husband gets a $100 gift card every year from his parents for his birthday to Outback Steakhouse...one of his favorite restaurants. With 5 kids, that is spent before dessert! But my mother-in-law knows that's his favorite and in fact, still asks every year if she should get it again. I would think restaurant coupons are more likely to be used because let's face it....American's LOVE to eat - especially when someone else is cooking!! LOL
Nov 15, 2007 11:35 PM
Allen C. Wright
RealtyU - Aliso Viejo, CA
NS, AHS, REPS

It is a fact that as a society we have become lazy ... it is just easier ... I do not live near any of my fdamily and going home at the end of the year is next to impossible.

The only gift cards I purchase are STARBUCKS ... It would be interesting to know what cards get the least amount of usage.

For the kids I purchase Movie Passes ... it is a great gift that must be SHARED ... another lost concept.

Nov 16, 2007 05:38 AM
Josette Skilling
Keller Williams Capital Properties - Bethesda, MD
I try if I'm going to do a gift card to make it be for something I know they are going to use.   Unless it's for a spa someting I can't say as I've let a dollar go to waste on mine :)
Nov 16, 2007 07:03 AM
Jennifer Hartwick
Crane and Crane Real Estate - Columbia, MO

I know that we have bought gift cards for Southwest Airlines for my mom.  Then I've heard her comment on how she has to figure out the best way to use them. I'm sure some of those go to waste.  Great post, and very true! 

I'm going to look in my wallet and see how many gift cards I have and haven't used!

Nov 16, 2007 08:06 AM
Irene Morales Ward
REMAX Distinctive Real Estate, Inc. - Stafford, VA
Realtor - e-Pro - Northern Virginia Real Estate
Allen - Everyone's taste is different. It seems the holidays have become less about giving the person something that you know means something special to them and more about just getting them anything! The movie pass always seems like a good gift. Who doesn't like going to the movies? Josette - With teens, it's so much easier. They're not afraid to say "Hey, I could really use an iTunes card or a Gas card for my car." But adults (at least this applies to me) feel embarassed to say what they'd like. Personally, I don't really want a gift in a box. Your company is my gift!:-) I'm WAY past the "stuff" stage. I'm all about the people. The older I get, the more precious time and moments together have become. Jennifer - What a generous gift! If you've heard her make that comment I think that was her very, very subtle and tactful way of saying, "I love you but maybe this is not for me." I could be wrong, though. Maybe she was just really excited and was thinking out loud about planning her next trip! Gather your old gift cards and plan a day out...you've probably got money left on a restaurant, a video store, and a retail store. Dinner, a movie, and a new outfit!
Nov 16, 2007 08:23 AM
Dionne Morgan
Realty World Solano Realty - Vallejo, CA
Broker REALTOR ,GRI, e-PRO
If those are the facts. you made your point. I often run across gift certificates I have purchased and never given out or gift certificates I have put away, never to remember. Thanks for the statistically info.
Nov 16, 2007 04:50 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel
Thanks for the information. I try to find out where they usually shop , before buying gift cards. This way I know they will use it .
Nov 25, 2007 11:04 PM
Irene Morales Ward
REMAX Distinctive Real Estate, Inc. - Stafford, VA
Realtor - e-Pro - Northern Virginia Real Estate
Gita - As it gets closer to the holiday, my kids are all putting in their "orders" and surprisingly, the older ones all want cash.  I miss the days of being able to shop for an actual gift!
Nov 25, 2007 11:22 PM