NEW YORK (MainStreet) — Once again, the gift card reigns supreme.
According to the National Retail Federation, Americans plan to spend a total of $27.8 billion on the plastic present this year, with each consumer shelling out an average of $155.43, up from $145.61 last year. The total puts gift card spending at the highest it has been since 2007 and also sets up the gift card to be the season’s most popular gift for the fifth year in a row.
While it’s understandable why many people give gift cards – they are convenient and don’t require much thought – there are plenty of reasons to get more creative in 2011. MainStreet rounded up a few reasons why you should ditch the gift cards this holiday shopping season.
They can increase your holiday spending.
The numerical value prominently displayed on the corners or in the envelopes of each gift card you buy can unconsciously lead you to throw more money into a gift.
“[Consumers] may spend $25 instead of $20, $5 more than they intended to,” Clarky Davis, spokesperson for CareOne Debt Relief Services, told MainStreet in October. She says that buying a small gift without the price tag displayed on it will help you stay within your allotted budget.There’s fine print you’ll need to worry about.
While new regulations put limits on gift card expiration dates, there are still some fees retailers can bury in their gift cards’ fine print. This includes purchase fees, fees for inactivity, dormancy or service charges when there has been no activity on the card for at least a year, transaction fees every time the card is used and other miscellaneous charges for balance inquiries, adding funds or replacing lost or stolen ones.
While many retailers have ditched fees entirely in order to remain competitive, consumers should still read through the disclosure form, which must be provided at the point of a gift card’s purchase, before selecting which ones to buy, something you won’t have to do when buying a nice box of chocolates.