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Buying Gift Cards Advantages and Disadvantages

Updated on September 10, 2013

Buying gift cards is a simpler way of solving the problem of buying that special gift for someoneThis takes the stress out of trying to choose what the person will like and the risk of offending them. This is more prevalent when buying for distant family members. As you do not see them often you don’t know what they like or dislike, or how much the children have grown or what their interests are.

Gift cards allow you to choose from a number of different companies cards.  When dealing with long distances and different countries the suppliers of cards will differ from each area. Many companies have their own cards where people can buy their products.  You need to be aware of hidden costs and the risks involved when purchasing and using your gift card.

 

Prepaid Visa Gift Cards online

Visa gift cards can be bought online or in many stores around the world. These are great as people can often choose when and where they spend the money.   When sending gift cards internationally you need to be aware that there is a currency conversion fee of 2.5% for transactions for foreign countries.

Visa gift cards are also great to use as gifts for the traveler.  With the increased cost of fuel, it makes travel very expensive, therefore this gift would be appreciated and help enormously.

E Gift Cards

These can be bought online and are sent directly to your email inbox.  Companies supplying these advise everyone that spam filters may block their email, so need to check their spam box.  They should also contact the company if not received within a couple of days.

 

Advantages of Gift Cards

All types of gift cards are becoming more and more popular every year. You need to do your homework and find the one that suits you the best.  Here are a few suggestions:

Inter-store Gift cards

The specific inter-store cards are very good for their company and these normally will have less hidden charges and fees than others.

General purpose gift cards

These cards are usually supplied by the major worldwide companies. American Express, Visa and Master card, which are accepted everywhereThey offer so many more ways of using it, like buying anything online through a variety of stores. You can use it while shopping locally, fueling your car, or buying your sporting or concert tickets.

Benefits for retailers

Retailers love gift cards as they gain more profit from these cards than people paying with cash.  Often customers will use a fifty dollar gift card and only spend thirty dollars. The customer either loses the card or forgets the unspent amount, therefore the retailer gains. So many cards are mislaid, therefore as the card is paid for in advance, the store gains from their loss.  This card also encourages new customers into their stores who often spend more than the original amount of the card.  It has been recorded that many of the prepaid gift cards purchased are never spent, which is not only a waste of the purchaser’s money but the receiver does not receive a gift after all.

Disadvantages of gift cards

Gift cards that are affiliated with major credit companies like American Express, Visa and Master card can be used anywhere. Although these cards have an expiry date and accrue fees and charges. Whereas retailers often do not have expiry dates.

Replacement cards often cost you money to have it replaced. Some even go as far as charging a fee if you have a credit balance on the card.

Retailers are charged a small fee to produce the gift cards.

Beware: I recently read an article in our local paper where a woman bought her aunt a fifty dollar Visa gift card. When presented at post office to use, she was told that it had to be validated. As the purchaser had not kept her receipt when purchasing the card from the post office, she had no proof. They checked with the bank and got the same response. Eventually after many days of anguish, they eventually validated it from their existing records at the post office. So make sure that this does not happen to you.

Can anyone use a prepaid gift card?

The answer is yes and why:

1. Anyone who does not like carrying cash

2. This would save paying credit card charges

3. Someone with a bad credit rating

4. Use these instead of traveler checks

In conclusion

Make sure you use it before it expires

Buy from the merchandiser

Keep your card in a safe place and make sure you use the complete value of gift card before it expires

Beware:

I have just read an article that say scammers are now copying the number in the magnetic strip to track usage of outstanding balances on the gift cards that are on display stands. So be very careful of the scams that are happening.

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    • Eileen Hughes profile imageAUTHOR

      Eileen Hughes 

      8 years ago from Northam Western Australia

      Kia31, Yes I can associate with your problem there. Although they are a handy present for the hard to buy for person. thanks for stopping by

    • kia31 profile image

      kia31 

      8 years ago from Los Angles

      Gift cards are pretty good some times for me if someone gives me one but I always seem to forget how much I have on the card and its a hassle to look up my balance.

    • Eileen Hughes profile imageAUTHOR

      Eileen Hughes 

      8 years ago from Northam Western Australia

      neminga, has she still got the card? if so go back to where she bought it they should have records if she knows which day she bought it. Tell them she will write a complaint about the company if they do not do something about it.

      Do not let that company get away with it.

      Bad publicity travels faster than good. get her to remind them of that fact. If that does not work contact consumer protection or similar in your town. Go For it.

    • Nemingha profile image

      Nemingha 

      8 years ago

      You are right about needing to watch what you are doing. For Christmas just past, my eldest daughter purchased a gift card for my younger daughter from one of her favorite clothing stores. What she did not know was that, after purchase, the card needed to be activated online using the receipt number. After tucking the card away in a safe place till the "big day", and not seeing any need to keep the receipt, daughter number one promptly threw it away. End result? Daughter number one lost her hard-earned money, daughter number two didn't get any gift from her sister for Christmas, and the store just made an easy $50.

    • Eileen Hughes profile imageAUTHOR

      Eileen Hughes 

      8 years ago from Northam Western Australia

      fits4life Yes it takes the stress out of finding the right gift. Although they know how much you spend. haha

      Beats me, yes they can be a problem if you arer not on the ball. And watch what u doing

    • BeatsMe profile image

      BeatsMe 

      8 years ago

      Wow. Gift cards. These small cards look like they can bring trouble to inexperienced people.

    • fits4life profile image

      Cherri Brown-Jett 

      8 years ago from Richmond

      This hub is very important, especially for those who are struggling with gift ideas or don't like to shop. Great job!

    • Eileen Hughes profile imageAUTHOR

      Eileen Hughes 

      8 years ago from Northam Western Australia

      Linda myrshall, gee thanks for the compliments you will have my head swelling. We can only try to help people. I am always learning from hubbers.

      Ethel, thanks for stopping by hope it helps.

      Dohn121 Yes it is a shame hoe people waste hard earnedf money isn't it. It is so hard to buy presents for some people that gift cards are a real asset.

    • dohn121 profile image

      dohn121 

      8 years ago from Hudson Valley, New York

      Great tips, Eileen. I had no idea that so many people actually don't take advantage of the gift cards they are given. My favorite gift cards to receive are Barnes & Noble's gift cards and you're right about spending beyond the card's limit as most of the time, I'll spend upwards of $10 or $20 extra. Thanks for sharing!

    • ethel smith profile image

      Ethel Smith 

      8 years ago from Kingston-Upon-Hull

      Thanks for pointing out the cons as well as the pros.

    • profile image

      Linda Myshrall 

      8 years ago

      Eileen, This is great! You've done a great job of identifying all of the pros and cons without missing a beat. You even found a new bit of information about the scammers which is something I hadn't heard before. That's why I like your hubs... you always have at least one unique bit of information or a different perspective.

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