Skip The Gift Cards This Holiday Season!

Skip The Gift Cards This Holiday Season!

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Its Christmas morning and you’re opening up one of your smaller gift boxes and quickly come upon a gift card which can be used only at a favorite retail establishment. You like the idea of getting a gift card because it allows you to buy what you want and when you want it.

Months goes by and you forget about the card, happening upon it again in June just a few weeks before you take your annual summer vacation. With glee, you begin to gift boxthink of ways that the money will come in useful, perhaps enough funds to purchase new bathing suits for you and the kids or a hammock and bird feeder for the backyard.

Before you run out and use the gift card you’ll want to make sure of one thing: is the retailer still in business? Unfortunately, a rash of bankruptcies even for popular retailers has meant that some consumers have been left holding the bag (or a worthless gift card) which could end up being the worst gift that you received this Christmas.

According to consumer advocate Clark Howard, when a retailer of restaurant goes into bankruptcy, it is up to the bankruptcy judge to determine what rights you have as a gift card holder. Unfortunately, judges usually wipe out those rights, leaving you with just a small piece of plastic as remembrance of a gift given. Howard hates gift cards and recommends that people give a time-honored gift instead: cash.

If you do receive a gift card this holiday season you can avoid losing the value of that gift by purchasing something immediately. The weeks following Christmas usually have the best sales of the year, stretching the value of the gift card further. However, with so many retailers on shaky ground, you might want to hit the store the day after Christmas because the New Year may not be so promising for that retailer.

Howard says that consumer groups are trying to have the Federal Trade Commission (FTC) issue guidelines on gift cards that would require retailers to escrow gift card money. This move would protect consumers in the event of a business bankruptcy and give gift card givers and receivers some peace of mind.

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