When Holiday Cash is Better Than Gift Cards

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Last season's easy present, a store gift card, is no longer such a simple purchase.

When stores go bankrupt, the value of a gift card can disappear. Linens N’ Things and Sharper Image filed for bankruptcy this year, leaving some with gift cards with questionable value. A gift card that could once purchase exciting gadgets initially became worthless when Sharper Image filed for bankruptcy in February before deciding to honor gift cards with the stipulation that consumers spend double the cards' value.

It comes as no surprise that gift card spending may decline by 6% this year as shoppers are expected to purchase fewer gift cards for various reasons, including the feeling that gift cards are impersonal and to avoid added fees, according to the National Retail Federation.

What can you do to assure that a gift that empowers choice keeps it value? Consider giving the equivalent in cash. There are great incentives for choosing cash over gift cards:

1. No expiration date. You can use cash at any time, and hold on to it for as long as you want. Gift cards, on the hand, are governed by consumer protection laws that stores use to determine expiration dates. For example: Residents of New Jersey and Kentucky are protected against expiration dates for at least two years from the date of a card's purchase. But states such as Georgia and Nebraska only require disclosures for expiration dates, which could be at any time. 

2. No restrictions. The almighty dollar leaves less worry about where recipients could spend your gift in the U.S. Store gift cards limit a gift recipient to fewer stores.

3. No minimums required.
Many gift cards require a minimum that is set by the gift card providers. Cash sets no limits or minimums on gift amounts.

4. No mystery balance.
Purchases reduce the balance on a gift card making it difficult to remember the total available credit if each transaction is not written down. Cash keeps its value printed on the bill or coin.



Tips for presenting cash as a gift:

If you plan on sending money by mail or courier, send a check or money order. (If the prospect of standing in line at the post office doesn’t put you in a merry mood, consider sending a check directly from your online bank account.)

Present the cash in a gift box or with a small gift item. Use your imagination to make the gift of money an exciting present to open. Consider placing money in a decorated envelope and inserting in a used book or give a money tree (a small plant with bills attached).

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