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Especially during the holiday season, we tend to think of all the things we could give a person. However, if we don’t know them well or they happen to be one of those people who have literally everything, it becomes pretty hard to buy something nice for them. Gift cards are a fantastic answer to the problem. I have used them myself on several occasions with great results. Others have gifted me with a gift card as well. I always loved that because then I could buy what I wanted instead of get some strange item that I could never use or return. That made them valuable to me and thousands of other people who either bought them or received them as gifts. The retail stores receive millions of dollars for gift cards. The question is, are they any good when the person tries to redeem them?
When it comes to the larger retail stores, they are likely to be just fine although there is at least one store that is heading into bankruptcy. Smaller stores need to be checked out very carefully. If you do not, the gift card may be worth nothing at all. When the company that sold the card goes into receivership, often the commitment of the card is not honored and you become one of the people who gets to wait until they pay the debts of the company. Unfortunately, they pay the largest debts of the company first. The likelihood of the card holders getting anything back is extremely slim and none at all. If they do, it’s pennies on the dollar. When the stores or companies are in trouble, they still will not stop selling the cards since they are looking for all the money they can find so you, the consumer, get to hold onto a dead piece of plastic that’s worth nothing. You won’t know that until you try to redeem it.
People often believe that gift cards never lose their value but that is not true either. Even if the store is doing fine, that does not mean that the card will always be there just waiting for you. One young man was saving his gift cards that he had received for Christmas and birthdays for a couple of years only to find out that they were worth absolutely nothing due to maintenance fees. Another option is to buy the cards from a bank instead of a store. These are called open loop cards. Seems like a good idea but, again, the maintenance fees will bring down the value of the card to nothing if you wait long enough.
The best idea is to buy the cards from strong, stable companies and stores like Target and Walmart. While I am definitely not a fan of Walmart, we still buy the gift card to save money on gas that we purchase at the gas station. These cards are good as long as they are in business with no fees whatsoever. Many of the large stores are counting on and expecting high gift card sales to bolster they slipping sales for this holiday. So, be warned. Gift cards are not always the gift you thought they were. Givers, buy the cards close to the date of giving the gift. Recipient, use the card as quickly as you can. That way, both of you receive the satisfaction of the gift given and received.
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