Question: I got married this summer, and three months later, me and the missus are having our first argument. As I’ve learned from reading your articles, the fight is indeed about money. But not like you think. We’re arguing over whether giving gift cards as Christmas presents is “tacky.”
I say no. In fact, I’ve been doing it for years. I even save up the points on my credit cards and convert them into gift cards every November, so I literally give most of my gifts without spending a dime. But my new wife says gift cards are impersonal (and giving cash is downright insulting).
She also says gift cards come with high fees, not all the money gets used, and they’re easily stolen — “no one steals your sweater,” she says. Who’s right, Howard?
— Paul in Alabama
Howard Dvorkin CPA answers…
It’s not about who’s “right,” Paul. Giving gifts is a highly personal matter. It’s often an emotional decision, not a financially rational one.
However, there’s some objective research that backs up your argument…
1. They’re popular
This holiday season, 73 percent of shoppers will give gift cards as presents, according to the Retail Gift Card Association. (Yes, gift cards are so popular, they have their own organization.)
2. They’re flexible
The RGCA poll says, “The number one reason shoppers like to give or receive gift cards is that they safely allow the end users to purchase what they want. Shoppers also like them because gift cards are convenient for the gift giver and recipient alike.”
3. They’re safer
“Security protection is one of the most popular features added to gift cards this year,” concludes the Bankrate 2015 Gift Card Survey. This holiday season, half of all gift cards let you add a security code. (Only 35 percent did last year.) That prevents thieves from spending the money on the card, even if they’re lost or stolen. (Your wife is right about one thing, Paul: Lots of people lose their cards. Bankrate puts the number at one in four.)
4. They’re cheaper
Gift cards once charged exorbitant fees. Not so much anymore. Bankrate says fees can range from $3.95 to $6.95, but “just 13 percent of cards have any kind of purchase fee — down from 17 percent last year.”
Advice from one married man to another
You can win an argument with your spouse and still both lose. The best result is a compromise. Here’s what I suggest: Go to Bankrate’s In and Outs of Gift Cards and scroll down to the interactive search feature. That allows you to shop for gift cards that are retail, restaurant or airlines while also finding ones that have no fees and security features.
Then, together, look at your list of people to buy for. See if you can find a gift card that matches that individual’s interests. If you know a traveler, foodie, or fashionista, you might see the perfect card for them. For the rest of your list, go with your wife to the mall or shop online for other gifts.
Sound fair and frugal, Paul?
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Email your question to email@example.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.