By John DeFore

‘Tis the season of gift-giving, which means it’s also the season for uncertain Santas to send gift cards rather than pick presents they’re sure will be returned before the eggnog gets warm. Moreover, it’s the season for consumer-rights organizations to issue warnings to those of us considering this easy option.

While all of us know the common-sense reasons to reject gift cards — they lack the warm vibes of a hand-picked present; those little envelopes offer no mystery when stuck under a Christmas tree — opinion polls show that fewer of us are moved by such arguments. According to a Deloitte survey, “for the fourth straight year, gift cards are expected to be the top gift purchase, with more than two-thirds of consumers surveyed planning to buy them.” We’re buying more of them, as well, and in higher denominations. What’s more, over a third of recipients say they prefer to get cards to merchandise.

Still, there are good reasons to think twice about the little plastic übergift — reasons that retailers and banks would rather not discuss.

Most basic is the fact that they’re often lost or forgotten. According to a report last year from the TowerGroup, consumers lose almost $8 billion each year in unredeemed cards — twice the combined cost of credit- and debit-card fraud. A Consumer Reports survey says huge chunks of us simply don’t take the time to go shopping after receiving cards, or can’t find anything we want when we do.

Those unclaimed dollars may be annoying for a department store’s bookkeeping department, but they’re great for the bottom line: Stores get cash without losing inventory; even if the credit is eventually redeemed, the period between card purchase and redemption is like an interest-free loan.

That’s frustrating enough, but as Consumer Reports and other groups point out, gift-card policies often have pitfalls beyond the recipient’s forgetfulness. Depending on what kind of card it is, its fine print may include expiration dates, transaction fees, and cryptic monthly deductions if a card is inactive for a while. These headaches are more common on bank-issued cards (the ones with a credit card logo on them, which aren’t tied to a specific store), but aren’t limited to them. Making things more complex, states have different laws regulating gift cards.

For those who would still prefer to give their loved ones the gift of plastic, a couple of groups have responded to the industry’s bad press with services aiming to improve the experience. Even here, it pays to read the fine print:

A “GiveCard” offered by Giving Tree operates just like a MasterCard debit card with one big exception: Before using it, the recipient must go online and give 10% of its value to the charity of his or her choice. It’s not a wholly altruistic enterprise, though: A $25 GiveCard sends $2.50 to a charity, but costs the purchaser an additional $4.95 (nearly 20% of the card’s value) in “Issuing, Shipping & Handling” fees. Additional fees are listed in a “Cardholder Agreement” that’s over 3,000 words long.

Then there’s Leverage, which has been promoted as a way for recipients to keep track of the cards they get and maximize their usefulness. A closer look makes the site look more like an extension of retailers’ marketing plans — one inviting users to fork over all sorts of personal information in exchange for the privilege of “offers and communication created specifically for you.”

Sure, that’s better than a lump of coal. But for loved ones who gripe year-round about how much junk mail they get already, it makes the old greeting-card-stuffed-with-cash look a lot more thoughtful than it used to.

Copyright © 2007 | Distributed by Noofangle Media