Gift Cards Are they really worth it?
The gift card industry has really exploded in the past 10 years. Many years ago these were called gift caertiifcates and were often a piece of paper for use at a store or in many cases a local small business merchant. recently The Sharper Image filed chapter 11 bankruptcy and all their gift cards are now creditors. Initially the holders of the Sharper images cards would not get anything, however the stores will now accept them if the customer at least doubles their purchase. This means effectively that they don’t lose anything on the sale as all of their items have at least a double markup from the wholesale cost. Linens and Things is also in Chpt 11. They will accept gift cards, however I suggest using them quickly in case they chnage the policy or start closing stores.
This is only one single reason why gift cards may not be the way to go. In general the problem is the gift card can only be used at a certain merchant. Many gift cards are also not used. Recently businessweek reporte that Bestbuy has 500 million in gift cards sold, yet not redeemed. Sometimes you lose them or forget to use them. I have found some cards that I had which were unused. Home Depot has at least 100 million in unredeemed cards. Retailers love to sell them because I think as an industry average 10% of the cards never get used, plus customers tend to buy more than the value of the card they get. So they get a customer iin the store to use the card, and end up getting an extra sale. Some of the Visa gift cards have all sorts of attached fees. There is a really great blog that talks alot about gift cards. http://www.savvywallet.com/
Tags: gift cards, Shopping
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