Avoid The Gift Card Money Pit This Season

If you’re anything like me you find holiday shopping about fun as watching your 401k balance these days. Finding that perfect gift is difficult enough let alone standing in lines that wrap around the mall twice.  The majority of Americans such as myself take the easy way out and opt to buy gift cards.  This shopping season I’m hear to give warning about the possible gift card money pit.

Unless you’ve been living in a remote rain forest, without communication for the past 6 months, you’re well aware of the struggles major retailers are having in the current economic climate.  This should yield you a fair amount of caution when go and get the gift that’s suppose to keep on giving, a gift card.  Keep in mind when you purchase a gift card from your favorite store, there’s no guarantee the gift card will worth anything the next day.  If you happen to buy a card from a retailer that is on the brink of bankruptcy you might end up holding a really expensive and unattractive table coaster.  There’s no guarantee that the card will be have any value if the company decides to close up shop or reorganize in bankruptcy court.  Take Sharper Image as a prime example.  If you were one of the unfortunate people who had a gift card in your wallet, you were left with nothing more then a souvenir of a fallen company.

If you still plan to join the millions of American’s who go the route of the ever popular gift card, make sure you do your diligence on the company you buy it from.  Check out the stock price and any news that might hint towards financial stress.  There are also company’s that specialize in offering guarantee’s for gift cards; do a quick Google search and you’ll see a long list.  If it were me I might opt to forgo the gift cards this year and truly give the gift that keeps on giving, a fun and exciting deposit in a high yielding FDIC insured money market account!  Regardless of your choice take caution and enjoy the season.

If you have any stories you’d like to share of getting stuck holding worthless gift cards we’d love hear about them in our comments section below.