Scott is obsessed with personal development. For the last ten years, he's been experimenting to find out how to learn and think better. Read full profile

I don’t know who came up with gift certificates, but they should receive an award for one of the best marketing jobs ever pulled on the unsuspecting public. How else can you explain how people are willing to trade money, for a less useful and more restrictive form of money at a one-to-one ratio?

For those of you who can’t think of what to buy your miserly Aunt Josie who doesn’t seem to enjoy any material possessions or your nephew, John, who is involved in the next cult-like fad of card-collecting, baggy clothes or earsplitting music, avoid the temptation to get a gift certificate. Here’s why:

1) Gift certificates are like money, except less useful.

Money can be used everywhere. Gift certificates can only be used with specific stores. If the gift certificate offers some kind of special service or discount, this tradeoff might be reasonable. However most gift certificates can’t be redeemed for cash, nor do they offer special treatment so buying one is essentially buying less useful money.

Advertising



2) Gift certificates are a mark of defeat.

When I’ve given gift certificates in the past, the unstated words are, “I give up.” A gift certificate is basically a sign that you couldn’t think of an actual gift to give the person, so you will just let them pick it out for themselves. If you want a gift that says, “I don’t know you well enough to pick out a gift, but I thought cash was tacky,” get a gift certificate.

3) Gift certificates have expiry dates.

Not only are gift certificates a more restricted form of money, now some companies have the nerve to put an expiry date on them. As if trading your money for less valuable money wasn’t enough, now you get the bonus of having money that only lasts for a year or two. Most stores won’t tell you about the expiry dates, but if you check the back most tell you that your less-valuable money will become completely useless after several months.

4) Gift certificates can backfire.

Advertising



The main argument for a gift certificate over cash, is that it shows at least some thought into preparation. However, this can backfire if you get someone a certificate for a store they never shop at. I’m sure we’ve all had the joy of running over to a store to use a gift certificate to buy an item we don’t need, just to feel like we aren’t wasting it.

5) Gift certificates can cost your friends and family money.

When you give a gift certificate, often you are forcing them to pay some of their own money to use it. A twenty-five dollar gift certificate isn’t a whole lot at some fancy outlets and technology stores. You may be forcing your recipient to spend another ten or twenty dollars in order to use your wonderful gift. How thoughtful!

6) Gift certificates get lost.

Many stores have started using gift cards instead of certificates. These little devices magnetically store info about the dollar value they hold. Despite the tracking of the gift certificate money electronically, you still need to have the card in order to use it. That means that if your certificate gets lost, the money is gone forever. At least you can deposit cash in the bank.

Advertising



7) Gift certificates have leftovers.

What actually costs exactly twenty-five or fifty dollars? Usually your lucky gift-card recipient will be left with a couple dollars on their card after buying a gift they probably didn’t really want for themselves. This means your tradeoff for less valuable, expiring money loses an additional dollar or two.

8 ) Gift certificates mean a trip to the store.

Buying a real gift for someone says: “I know you don’t like to treat yourself, but I went to the trouble of getting something I know you’ll like at a store to save you the visit.” A gift certificate is the do-it-yourself version of a gift, forcing the receiver to make a trip to whatever store you happened upon and spend hours driving, browsing and fumbling with the card.

9) Gift certificates don’t earn interest.

Advertising



Okay, so twenty dollars in cash isn’t going to appreciate much in your 1-2% annual interest savings account, but it’s still more than your certificate. Slowly losing the battle against inflation you can be happy knowing your gift becomes less and less valuable each day before it eventually gets lost or expires.

10) Gift certificates… aren’t all that bad.

I’ve been giving gift certificates a hard time. Despite their many flaws, sending cash is still a faux pas by many peoples standards. And despite the lack of logic in preferring one to money, many people still do. Many people actually prefer the colorful little cards to gifts if it means they don’t have a choice at all.

Besides, when it is Christmas Eve and you still need to buy for a half-dozen more relatives, that card at the checkout counter starts to look a little more attractive. Sure it isn’t as thoughtful as a hand wrapped gift complete with ribbon, but Hallmark cards aren’t as romantic as hand-written poetry, but nobody does that either. You might just have to throw up your hands and give in to the brilliant marketing scheme that are gift certificates.