Friday, November 29th, 2019
Think giving gift cards this holiday season will be viewed as taking the easy way out? Think again. According to GiftCards.com, the U.S. National Retail Federation reports they've become the number one requested present eleven years in a row.
I was at a party recently where a friend brought a gift for her nine-year-old nephew. When he ripped it open to discover what it was, he was so thrilled, he danced around the room. I was curious. Why was he excited? Much to my surprise, it turned out to be a gift card!
It changed my view of holiday shopping completely. Up to now, I'd always viewed giving gift cards as taking the easy way out. Not anymore. The reason my friend's nephew was so excited was because the card meant he could buy exactly what he really wanted.
This holiday season, I plan to purchase gift cards for everyone on my list, and I'm not going to feel guilty doing it. In fact, I'm going to be confident I'm giving everyone on my list exactly what they really wanted.
Gift cards have also evolved in recent years. Many now provide additional benefits you may not be aware of.
A $50 gift card will cost you exactly $50 (the tax is charged when the card is used to buy a taxable item). The one exception is if you buy a gift card for a specific item or service. A gift card for a manicure, for example, will likely include the tax in the cost of the card so the recipient won't have to pay it. But either way, tax is never charged twice.
2. They're Great for Online Shopping
Got a friend who does most of their shopping online? Let them choose what they want from their favourite online retailer. E-gift cards can be bought online and sent straight to someone's inbox. They can be purchased either directly by visiting an individual retailer's website or through online e-gift card service providers that offer multiple cards from participating retailers. Simply browse the site for the gift cards you want to purchase, add them to your shopping cart and check-out by paying with a major credit card. You will receive a confirmation email once your order is processed and your gift recipient will receive an email containing a link to their card.
3. They Can Be Stored on Your Phone
A common complaint about gift cards has always been they're easy to lose or forget about. But with new apps that allow you to snap a picture of the card and store it on your phone, the problem is solved. Plus, storing gift cards for future use is usually not an issue. Most gift cards don't expire, but according to the Financial Consumer Agency of Canada, gift cards provided as part of a loyalty or rewards program and gift cards for specific services may have expiry dates.
4. Some Can Be Used Anywhere
Unsure of what retail gift card to buy? Gift cards available from major credit card companies function essentially as credit cards that can be used anywhere that accepts plastic. They're pre-loaded with a set amount, and they can provide a young person with the independence of being able to shop wherever they choose with no danger of falling into debt by going over the pre-set limit.
5. You Can Protect Many Cards From Loss or Theft
Many of today's gift cards can be protected against loss or theft by registering them with the issuer. They can offer peace of mind from online security concerns. But don't assume all cards carry such protection. Some retailers specifically caution in their terms and conditions to “treat gift cards as cash." That means lose them and you're out of luck. When buying a card, read the fine print or opt for an e-gift card that's protected by a recipient's email username and password.
Still not convinced that giving gift cards this holiday season is a great idea? Consider one more factor. Stepping back from all that hectic shopping may just create the most precious gift of all—more time to spend with those you love. And isn't that what the holidays should really be all about?
This article is provided for information purposes only. It isn’t meant to be relied upon as financial, tax or investment advice, makes no guarantees about future financial conditions or performance, and shouldn’t be considered a recommendation to buy or sell investments or financial products....Information contained in this article, including information related to interest rates, market conditions, tax rules, and other investment factors is subject to change without notice, and Tangerine Bank isn’t responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication, and Tangerine Bank doesn’t guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.