Pros and Cons of Gift Cards

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By Richard

Gift cards have become an increasingly popular gift choice for all occasions, mainly because they are handy. Shove it in your back pocket, and you are ready to travel in style.

Whether it’s birthdays, graduations, weddings, retirements, or “just because,” many shoppers opt for the convenience of gift cards, however, despite their ubiquity, gift cards also have some distinct disadvantages. So, in this post, we’ll explore the biggest pros and cons of giving and receiving gift cards.

But first…

How Gift Cards Work

Gift cards have become a go-to gift item over the last decade. Just walk into any major retailer or restaurant, and you’ll see racks filled with gift cards to suit every occasion. But even though we all use them – how exactly do gift cards work?

When you purchase a gift card, you pay upfront for a certain amount of purchasing power. That dollar value is associated with a unique gift card number. The merchant keeps your pre-paid funds on account until someone comes to redeem the card. Most physical gift cards have a magnetic strip on the back for easy swiping at checkout. Some stores now offer virtual e-gift cards to send online, too.

When the gift card recipient is ready to use their card, they have the cashier swipe it like a credit card at checkout. The dollar balance linked to the card number is automatically deducted from the total purchase price. The card stays valid for future shopping trips if funds remain after a transaction. Pretty straightforward!

It is important to note that a purchase may be turned down when the price exceeds the available balance on the card or if it is yet to be activated. So, be sure to check the receipt of the card to know when it will be usable.

The Pros

There are several advantages to using gift cards. They include, but are not limited to, the following:


Undoubtedly, the number-one benefit of gift cards is how incredibly convenient they are. For the gift giver, you skip the stress of selecting the perfect item for someone. Pick out a gift card to their favorite store or restaurant, and you’re done!

They also remove the headache of sizes, colors, styles, etc. The recipient gets to browse and choose something they genuinely love leisurely. As if it could not get better, gift cards have also become quite a popular online gambling payment method, the ideal gift for people who play their favorite titles, saving them the hassle of adding their credit/debit card details to their favorite online gambling site.


Gift card amounts typically range from $10 to $100.

For the gift giver, this makes them one of the most budget-friendly gift options for any special occasion. It allows you to choose how much you want to spend and is handy for personal use if you need help controlling spending. Instead of walking in with all the cash you have in hand or your cards and maxing them out, you can go with a gift card funded with just what you need.

Flexible for Everyone

What do you buy the colleague at the office party or your nephew you barely talk to? Gift cards! Since brand selection is so vast nowadays, there’s a gift card option out there for every taste and age range. Grab a Starbucks card for the coworker or an Xbox card for the nephew.

The Cons

Just as important as knowing the upside to using gift cards, so is it to know some of the disadvantages. They are as follows:

Lacks Thought

Simply handing someone an envelope with cash or a piece of plastic inside can come across as impersonal. Some people feel gift cards show a lack of thought compared to a well-selected tangible present. There’s also less chance of a gift card having sentimental keepsake value in future years.

Potential Fees

Make sure to read the fine print!

Certain gift cards charge purchase, activation, or balance inquiry fees. Monthly service fees may also kick in if you use the card sparingly. With some cards, you can end up losing money. So, before getting a gift card, research options to avoid these extra costs.

Easy to Lose

Since most gift cards look alike, they easily get shuffled into wallets and purses, causing them to go missing. If they have no registered protection, lost gift cards usually can’t be replaced. Someone else could find it and use the money before you get the chance to track it.

Doesn’t Fit Recipient’s Tastes

Even if you believe you have selected the recipient’s favorite store, tastes frequently change. The retailer could now sell mostly expensive or clearance items the recipient has no interest in. Unless it’s a universally popular place like Amazon, the gift card may go unused for months or indefinitely.

Expiration Dates on Some Cards

While state laws ban expiration dates on most gift cards, exceptions like prepaid Visa/Mastercards and bank-issued cards still exist. Be sure to read the fine print and warn recipients to use these cards so funds don’t mysteriously vanish periodically.

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