As we are now on the other side of Thanksgiving, holiday shopping is on the minds of many. One of the simplest ways to finish off your list is to pick up a few gift cards. Clearly, they have become a go-to gift as Americans spent billions of dollars on them every year.  But are they a worthy gift purchase?  

The case for gift cards: Gift cards are more personal than cash because they show some thought about the recipient. Gift cards are also more secure than cash and there is usually no shipping cost. As a recipient, you can then choose what you want.  How many times have you received a sweater that doesn’t fit or a new gadget you don’t want? Or how often have you received a gift that is close to what you wanted, but not quite right? Gift cards solve this problem by letting the recipient choose his or her own gift. I often give and receive gift cards. My younger son has built up quite a LEGO fleet to battle the Empire thanks to gift cards.

Gift cards are also the perfect gift for the person that has everything, or the person that you don’t know enough about.  Years ago when I first started in banking, I would participate in a “Secret Santa” exchange and would always end up giving a present to a person that I barely knew.  I think I bought winter gloves as gifts for five straight years.  With gift cards, you can set a specific amount and let a gift recipient buy their own gloves—or something else.

The case against gift cards: Nothing shows your thoughtfulness like the perfect gift. If you want to make someone happy, the feeling of opening the big box will always beat out opening an envelope, be it cash or a gift card. Gift cards cause us to lose out on some of the joy of buying presents—and giving something people wouldn’t buy for themselves, but would like to have. An exchange involving gift cards can also create an awkward situation of imbalance. When you receive a gift card for $100, but you gave that person one for $50, you might feel a bit like Scrooge.  

Gift cards might also be considered almost a nuisance when there is a small amount remaining on them.  How many gift cards do you have in a drawer with $1.56 on it?  At that point, some of the joy of the gift card has been lost and odds are you may not even remember who bought it for you.

Lastly, there is always a lurking risk that gift cards could end up worthless.  Imagine if you found a Bennigan’s or Blockbuster Video gift card that you never used?  This actually happened to me with Borders.  While you are pretty safe with Apple, Wal-Mart, and Amazon, it is well documented that there are some very large retail and restaurant chains in a bit of trouble right now.

I’m sure I will be doing some gift card buying over the next month but hopefully can find some really great gifts as well.