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The Best Holiday Gift Cards

The Best Holiday Gift Cards

Don’t know what to get your loved ones this year? Keep it simple and do what everyone else, it seems, is doing: Buy them a gift card.

According to the National Retail Federation, while gift cards have been the most requested holiday gift for four years in a row, this year they are more in demand than ever. Americans will spend an average of $145.61 on gift cards, up from $139.91 in 2009, and total gift card spending is expected to reach $24.78 billion according to NRF estimates.

“Gift cards serve as a blank check of sorts, giving the gift recipient free will to buy something they may have had their eye on for years,” said Phil Rist, executive vice president of strategic initiatives for BIGresearch, who helped the NRF conduct the research. “For some, gift cards are straight from the heart and among the most thoughtful gifts that a person can receive.”

But with almost every major retailer offering a gift card this holiday season, how can you ensure that you give your loved ones the right one?

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The Wish List

To get an idea of what kinds of gift cards people want for Christmas this year, MainStreet consulted two popular online gift card exchanges that buy and then resell unwanted gift cards for a discount. GiftCardRescue.com created a list of its top 20 most popular gift cards using approximately 6,000 wish lists created by their users from January to October 2010. The site also separately reviewed 200 wish lists entered during a Facebook contest it ran in November.  In both instances, the data indicate the same thing:

“People want gift cards from stores that have a wide selection of products and offer discounts,” Kwame Kuadey, CEO of GiftCardResue, told MainStreet.

Anson Tsai, CEO of Cardpool.com, agrees. Tsai aggregated data from CardPool’s database to create a list of his site’s top ten most popular gift cards. The results also indicate that the public is clamoring for gift cards from stores that don’t specialize in particular items.  “People are looking for something practical,” he says.

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The Big Three: Wal-Mart

“People want gift cards for superstores,” Kuadey says, which is why perhaps Wal-Mart gift cards are the most popular ones on his site. The national chain ranked third on Cardpool’s list, thanks, in part to its versatility.

Wal-Mart gift cards come in all denominations and styles: You can buy a card that can be used only to buy wedding rings, another specifically for baby clothes and one used exclusively to purchase gas. General cards, however, are valid at all Wal-Mart and Sam’s Club locations.

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Target

Ranked second on Kuadey’s list and third on Tsai’s is Wal-Mart’s main competitor, Target, which offers a similar diversity of gift cards. Like many major retailers, Target’s cards don’t expire and can be personalized (with a note!) by the person giving the gift.

One perk does set its cards apart: Target will donate $1 per gift card purchase of $20 or more – up to $750,000 - to St. Jude’s Children’s Research Hospital.

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Home Depot

A different kind of superstore, Home Depot offers the most requested gift card on Cardpool.com. The home improvement chain was ranked fifth on GiftCardRescue’s list.

It also placed first on a report released by RSR Research in September that examines which stores offer the best digital gift cards. The DIY chain was singled out because its e-cards can be personalized by uploading images or photos directly onto them at the time of purchase. It also notifies people when their e-gift cards are viewed, so buyers know when their digital gift cards are “opened.”

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Best Online Retailer: Amazon

Ranked second on GiftCardRescue’s list is Amazon - the only online retailer to appear in either ranking. Amazon cards fit the bill when it comes to practicality, since the site sells just about everything imaginable. In RSR Research’s report, the website was singled out for offering the third best digital cards because they are easy to purchase (the link is featured at the very top of  Amazon’s homepage) and even easier to use. Amazon offers both digital and physical gift cards.

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Best Bank-Issued Card: Visa

According to Kuadey, his site has seen an overwhelming increase in demand for bank-issued gift cards, now that the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 limited fees and made expiration dates on cards illegal.

“These cards are very attractive to people because they can be used in more than one location,” he says. The most requested of these cards, unsurprisingly, is Visa’s version, ranked fourth overall by GiftCard Rescue, which Kuadey attributes to its widespread distribution. “Many companies issue prepaid gift cards using the Visa logo.”

Both American Express and MasterCard also made Kuadey’s top 20, placing 12th and 15th, respectively.

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Most Popular Restaurant Card: Starbucks

While bank-issued gift cards are seeing a spike in popularity, restaurant gift cards are experiencing the opposite.

“Every year, after Christmas, we get boatloads of gift cards for restaurants that people want to sell back,” Kuadey says, explaining that this is also a function of the struggling economy, which has caused consumers to want to buy items that last longer than the speed of digestion.

The one exception to this trend, interestingly enough, is Starbucks, which actually ranked 9th on GiftCardRescue’s list, since many people incorporate the coffee chain into their daily routine. Starbucks has also done a good job of making the card attractive to consumers, allowing them to customize the design and earn rewards points when using it.

Photo Credit: jencu

Best Restaurant Card: Applebee’s

People’s apathy towards restaurant gift cards is somewhat of a shame, since restaurant chains often offer rewards for these types of purchases. Applebee’s, for example, is currently offering a free $10 bonus gift card when you buy $50 in gift cards at one of its participating locations.

We’ve selected Applebee’s as our favorite, since its lower menu prices seem to fit with the theme of practicality, but it is by no means the only one with a good deal. Buy $300 or more in gift cards at Morton’s Steakhouse and you will get a $50 to $100 card as a reward. Also, Ruth’s Chris Steak House offers 10% back in bonus points on gift cards of $250 or more.

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Most Underrated Gift Card: Bookstores

Missing entirely from both lists were gift cards for bookstore chains, which is also surprising since these retailers are offering rewards cards to the buyer as an incentive.

Borders, for example, is giving away a $5 rewards card when you purchase $50 worth of gift cards (You can buy two for $25 or one for the full $50) and Barnes and Noble has a comparable offer in which you’ll get a $10 e-gift card that you can use however you like if you purchase $100 in gift cards for your friends.

Photo Credit:  Amanda Govaert

Best Specialty Clothing Gift Card: The Gap

Gift cards from specialty clothing retailers are also experiencing a decline in popularity this year, though Tsai says his site does get a decent amount of requests for Gap cards, ranked 7th on his list.

The reason? They can also be used at Old Navy, Banana Republic, Athleta and Piperlime.com, which gives recipients more options. Many of these chains also cater to very broad ranges of people, meaning gift cards can be used to buy clothes for adults or their children, for example.

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Best Luxury Gift Card: Tiffany’s

“It’s interesting, but we’re seeing an increase in sales for gift cards from Tiffany & Co.,” Tsai, who ranked the luxury jeweler 10th on his list, says. “As soon as we put some up on our site, they sell out.”

Tsai said the gift cards, which can be purchased in amounts from $50 to $10,000, allow consumers to contribute to a luxury gift without springing for the full price tag. Another nice touch that surely sweetens the appeal is the iconic little blue box the cards come in.

Photo Credit:  Keith Williamson

Shopping Strategies

Whether or not you shop for gift cards or actual gifts, you will need some help navigating the madness of holiday shopping. Check out these MainStreet articles for all the tips and tricks you will need.

7 Black Friday Shopping Strategies

Ultimate Black Friday Guide

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