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Gift Cards Suck—Let’s Bring Back Cash as the Go-to Present

One Christmas, after years of painstakingly buying my sisters and mother gifts, we decided we’d just do gift cards. It’s easier and more convenient, we thought. Everyone can just buy $40 gift cards for everyone — same as our monetary limit on traditional gifts — and then buy ourselves what we actually want. That meant each person bought five $40 gift cards totaling $200. Simple.

At that year’s Christmas, we swapped all our cards in shiny succession, and that’s when it dawned on me: We had fallen for the gift-card ruse. The cash we used to spend was now earmarked in gift-card form, which meant we’d all have to traipse around to major chains (Target! Starbucks! Old Navy!) to spend the money. There was a good chance we’d either spend more than the card was worth or end up forfeiting some tiny leftover amount that would get tossed in a drawer and forgotten — pure profit for the retailer.

Arguably we should have just dropped $100 bills in a bowl and taken turns fishing out two apiece. We should have just given each other cold, hard cash. At least with cash, the sentiment would be fulfilled without a single smidge of inconvenience. Cash is king because cash is the easiest, most direct way to give a gift if you don’t have a great gift idea. “Hey,” cash says coolly, “I care about you enough to give you something, and I would actually love it if the something truly helps you. I don’t know exactly what that is, but you do. So blow this on weed, use it to pay your electric bill, buy a nice watch, or just pick up some groceries.”

People act like this is thoughtless, but thoughtless, I would argue, would be giving them nothing, or worse, giving them something they don’t really want but have to pretend to be grateful for. Yet, cash still has a bad reputation. Search online for why that is, and you’ll find all manner of sites and forums debating the issue. Some people consider it thoughtless and impersonal; others say it’s tacky or vulgar. (This argument extends, most controversially, to wedding gifts too — it’s okay to ask for a KitchenAid mixer, but not $200, for some crazy reason.) Visitors to the United States are sometimes perplexed to learn that it’s not okay to give cash here, when, in their country, it’s a perfectly acceptable, even welcome gift on many occasions.

It’s easy to see some of the reasoning against cash. Yes, when you give cash the amount is clear; it can’t be fudged through a gift that could be expensive or cheap (though I’d argue it’s pretty easy to ascertain what someone spent on most gifts these days by simply searching on the internet). Arguably the cash-giver hasn’t taken the time to really find a special, personalized gift based on your tastes and needs. It’s not creative, and it doesn’t come in a big shiny box. It’s the lazy person’s gift.

But here’s the problem: None of this is solved with a gift card. It’s just as impersonal, aside from the designated store. The amount is as clear as with cash. It’s not creative. And it barely takes more thought than cash. And then there are all the downsides.

For one, many people prefer cash over your supposedly thought-out gift or gift card anyway, so what you’re really giving them is a hassle — one it took you more effort to procure, and then more effort to spend. Over at MarketWatch, Kari Paul highlights a major conundrum with gift cards: “The gift card may seem like the perfect fallback gift for those who don’t know what to buy loved ones for the holidays, but sometimes even these presents don’t quite hit the mark,” she writes.

Proof? We drop about $130 billion a year on gift cards, some $1 billion of which goes unspent annually by people who don’t really want to go to Walmart, or have no need for anything at Starbucks or Home Depot. Or they simply forget. It’s easy to see why businesses push them — it’s pure profit for the retailer whether you spend more or less than the gift card amount. For us, it’s some way to sidestep the questionable use of cash while basically giving cash with caveats.

Gifts should not require such vigilance to protect them. A number of financial experts have outlined how to best use gift cards so you don’t get screwed, and it’s much more annoying than offloading cash. You have to spend them quickly, because, “the biggest mistake gift-card recipients make is to put their cards in a drawer and forget about them,” one expert told Consumer Reports. You’re supposed to register/record the number on the gift-card website, for crying out loud. And then there are all the ways thieves can have spent the amount on the card before you even know it, so you’re also supposed to change the security code immediately to avoid this. You can also take even more vigilant steps, like making sure your computer’s security software is updated before visiting the gift card site. Nothing says holiday fun like doing a little administrative work in your downtime to make sure you don’t lose your money!

Now, there are even third party re-sellers of gift cards, as Paul outlines back at MarketWatch. Companies like Zeek, Raise and Cardpool are virtual marketplaces that resell old gift cards for a few bucks cheaper, but at a profit to them. Which is another ingenious way for multiple people to buy the same gift card and still forget to spend it.

Paul also notes that there are some newer protections in place to make it harder to lose that gift card money than it used to be — for one, the card can’t expire before five years have passed. That’s a good step, but if the business that issued the card goes under, good luck getting that gift card money back.

Recently, on Facebook, a friend told a harrowing tale of finding an old gift card in a drawer. Since it hadn’t been spent for a year, it was locked by the issuer, so she had to call them up, but they refused to tell her the amount on the card. She had to fax a photocopy of her drivers’ license, among other bureaucratic, time-consuming steps, to finally get the $180. Commenters poured in with story after story of gift card hassles. Some couldn’t spend what was left on old gift cards because they had to spend exactly under the amount that was left, and could find nothing for less than $2.33 at the store. Others were required to provide a Social Security number to check a card balance. “There’s no point,” my friend concluded, “in giving your money to these companies instead of directly to your family and friends.”

More and more etiquette experts agree that cash is the answer. “It’s rarely returned, and one size fits all,” as one expert told Consumer Reports.

Hard to argue with that. Of course, if you can figure out a truly thoughtful gift that someone wants, by all means, do that. But if that were the case, you wouldn’t be resorting to a plastic card that represents cash in lieu of cash all because you didn’t know what else to get them.