If you’ve been reading this blog for long, one thing you’ve probably noticed is that I don’t like gift cards. Ever. Almost. I love gift cards to Joann fabrics, but that’s because I’m a crafter and will always use them. And I love Amazon gift cards because there’s so much you can buy.

But, for the most part I believe in giving cash in red envelopes or other pretty ways instead. I could cite the billions of dollars wasted in unused gift cards. I could talk about limiting your recipient to just one store or the limitations of redeeming some gift cards. I have.

But today I’m putting out another reason not to use gift cards. A few weeks ago, The Consumerist reported the story of a woman who was briefly taken to jail for trying to pay with legitimate Amex gift cards.

These cards were a Christmas present. The relative had even been thoughtful enough to give her something she could use at a number of stores. But because of a glitch and then a glitch on Amex’s end, the woman was handcuffed, taken to a police station, patted down (including under her shirt), and briefly held before Amex changed its answer and verified that the cards were legitimate.

The woman reported that as she left the station another young man was being brought in for the same issue only with MasterCard gift cards.

One lesson we could draw from the story is “don’t shop at this Best Buy because they will screw up your gift cards & call the police.” But when Best Buy did its part and called Amex the first time, it was told that there was a problem and confirmed in its decision to call the police. It wasn’t Best Buy who actually sent the woman to jail, it was an Amex representative. If another Amex representative hadn’t cleared things up quickly, she might’ve stayed longer.

Sometimes not dealing in cash makes sense, like putting your money in the bank. Keeping all of it in cash can be tragic. You want to earn interest. And debit/credit/checks allow you to purchase things quickly without bothering with bills. But why tie up gift money in a gift card, a gift cheque, etc? The reasons not to just keep piling up.


Bucksome February 15, 2010 at 9:04 am

Scary story, but I have to disagree with your conclusion. Gift cards are wonderful gifts for people who have everything (my parents) and those who like to frequent particular retailers.

I don’t think those AMEX or VISA gift cards for a couple of reasons. Since it seems like cash, just give cash. Second, never buy a gift card with activation fees.
.-= Bucksome´s last blog ..6 Expenses for Man’s Best Friend =-.

Mrs. Money February 15, 2010 at 9:13 am

Wow! That is unbelievable! That poor woman.

We sell generic Visa gift cards at my bank and I HATE to sell them. 😉
.-= Mrs. Money´s last blog ..How to Make Mouthwash =-.

Mrs. Micah February 15, 2010 at 9:28 am

@Bucksome I qualify at the beginning that I love cards for Joann’s because I shop there often enough that I can always use them. But the numbers on unredeemed gift cards show that billions are lost every year, often change. That’s why I advocate giving it in a pretty format (red envelopes is one way, there are others), even with a note attached suggesting a purchase or place to spend it.

That way if your mom has $1.50 in change, she doesn’t forget to use it or just throw it away, she can put it towards anything.

Evan February 15, 2010 at 2:54 pm

I LOVE getting and giving gift cards. Especially the generic ones. Giving cash makes me feel weird I am not sure if it is my age or generation – gift cards just seem more appropriate. Maybe if someone gave it to me in a nice red envelope…

And you don’t have to waste that remaining $1.78 – you can use it to pay online bills:
.-= Evan´s last blog ..Good Humanitarian or Personal Finance D-Bag? =-.

Frugal Babe February 17, 2010 at 12:56 pm

I know what Evan is talking about… giving cash feels a little strange, while giving a gift card somehow doesn’t. Although for some events (like graduations) it’s so acceptable to give cash that Hallmark makes cards with little cash pockets! What an odd bunch of customs we have, now that I think about it. I do sometimes give gift cards, when I’m sending gifts to friends in far away places. But I’ll think more about cash in the future for people who are nearby. Maybe bills could be folded into funky origami shapes to give as gifts? We have a wedding to go to this summer… I think I’ll try to come up with a creative way of giving cash 🙂
.-= Frugal Babe´s last blog ..Getting Started In Bulk Food Buying =-.

Money Reasons February 20, 2010 at 9:18 am

Sounds like she has a potential law suit against the Amex company to me!

What I hate about gift cards is the fact that some of them start to decrease in value if you don’t use them quickly (some only last a year)! Or at least it use to be that way.

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