1. MOVE FAST
Store liquidations usually begin rapidly — this past Friday for Borders — so it’s often best to use up gift cards online, rather than wait
until you have time to visit a retail store. Borders liquidation website says all 399 remaining stores will close by September, but
they may start writing the final chapter on your local store much earlier.

2. RESEARCH THE BANKRUPTCY STATUS
Borders was refused bankruptcy, meaning they had no choice but to liquidate. Other retailers, however, filed for bankruptcy and turned things around. Sometimes a company that’s filed for Chapter 11 is allowed by the bankruptcy court to honor its gift cards. California, however, specifically requires merchants in bankruptcy compensate gift card holders.

3. CONSIDER THE COMPANY’S STABILITY
If you hear tales of other merchants threatening to close shop, research their financial stability via such sites as BBB.com and Forbes Risk List. (Stores considered at-risk by Forbes presently include Rite Aid and Zales.) Also, ScripSmart.com regularly updates
its list of “Gift Cards to Avoid.”

4. USE IT OR SELL IT
If you’ve received a gift card for a merchant you wouldn’t frequent, don’t wait until a store goes out of business. You can exchange gift
cards for cash right now on such sites as GiftCardGranny.com and receive up to 95 percent of the card’s value in cash.

5. USE A CREDIT CARD
If you’re concerned about a retailer’s financial stability but still want to buy a gift card, do so using a credit instead of a debit card.
You can then ask the card issuer to withhold payment until you’re sure of the merchant’s status.

We all know how the system works. Consumer spending is a chicken and egg situation. One that is known only too well to economists. When consumers spend, profits go up, which are disbursed as salaries and dividends to people who use that money to spend even more and so it goes. Japan’s efforts to bolster consumer spending were flawed because people were not convinced that things were going to improve next year and so kept the money as savings instead of spending it, undercutting the point of the entire exercise.

Image Credit: tico_bassie

One major reason for people not going out and buying with abandon, is guilt. They want to, and they love to! But should they give in to the sinful feeling? As a gift giver, the best gift you can give to someone whom you care for, is a brief moment in the shop when they can buy anything they want.

A few days ago, my wife told me that she didn’t know what to give a friend, and whether she should just give cash. She was also considering a gift card but thought that it would just restrict the receiver to one single store. At that moment, the whole concept of gift cards rolled out before me, and inspired this post.

My reasoning was that gift cards are a much better gift than cash for several reasons. In the first place, it’s more tasteful. There’s something squeamish about giving money. It’s somewhat crass. In addition, it means that you’ve not put in any thought into the gift. Anyone can give money.

Secondly, gift cards are more tangible than money. For example, if someone gives me cash, I will head straight to the bank, and put it in. I will spend it of course, but along with my other money. The benefits of that particular gift are spread out over a period of time and become indistinguishable from the things that your money will normally buy. You can’t point to anything and say “I got that as a gift”.

Finally (and most importantly), gift cards have to be used! When I get money, I save it. I put it in investements and when I go to a shop, I never think “Hey, I just got $XXX from so and so, and thereofore I can buy that much.” Instead I feel guilty when I want to buy something even though I have extra moeny, because I know that I need not. If I don’t buy something then I save the money! More often than not, a gift of money does not affect my willingness to spend.

Gift cards on the other hand, provide the ultimate shopping experience – that of guilt free shopping. I remember as a poor college student, I got an award, the prize of which was a gift card from a book store worth the equivalent of $25. It was an experience I would not forget. The freedom to walk into a shop filled with books, and pick up anything I wanted! And not just one. I could choose two, maybe even three. The best part of the experience was that I was being forced into buying those books. If I didn’t buy then, the gift card would be a waste and I would not benefit in any way. The only way for me to benefit was to buy the books. Of course, I would have preferred cash(!), but having got the gift card, I experienced something that mere money could never have given me!

So now you know how to treat your loved ones to a great time! Giving them concrete gifts shows thought and care – unless it’s money – but to really make them happy, give them an experience as well as a gift. Something money can’t buy. Just be careful you give the right gift card to the right person. No point giving a Barnes & Noble gift card to someone who doesn’t like books or giving a Macy’s Gift card to someone like me. In fact, the choosing of the correct gift card for the right person, shows the thought and care that a real concrete gift would.