The wise giving & receiving of gift cards

Gift cards are on the top of many people's holiday wish lists. In fact, TowerGroup projects that 2008 sales of both financial service institution-branded and private label gift card will total $88.4 billion. While this number is impressive, it does represent a decrease of 8.9 percent as compared to 2007.

One of many reasons consumers might be planning to spend less on gift cards is the proliferation of emails that have been circulating warning consumers to expect trouble when trying to redeem gift cards at stores that are going out of business.  It is true that there have been many store closings and business bankruptcy filings in the past months.  However, according to, most fears that gift cards may suddenly lose their value or won't be redeemed are unwarranted or premature.

That having been said, I agree with other financial writers that it is not worth the risk to put off redeeming gift cards.   If you are on the receiving end of a gift card, it is safest to use the card sooner rather than later.  If the store does not suit your tastes, you can try to swap the gift card at,, or (Note: only regift a gift card that can actually be used!)

If you are buying gift cards as gifts, be sure that you understand the fine print.  Generally, there are no guarantees that your card will hold its value if a company enters bankruptcy.   

Following are some gift card purchasing tips:

-Consider giving cash instead of a gift card
-Consider bank-issued gift cards
-Consider mall gift cards that can be used in any of the mall's many stores
-Look for stores that are not likely to close (i.e. grocery stores)
-Ask store management about their gift card policies
-Ask about expiration dates, purchase exemptions, and fees
-Read the fine print on the card before you buy

Here is a link to a selected list of major recent retail closings:

Kim McGrigg is the former Manager of Community and Media Relations for MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

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  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.