Gift cards are a $10 billion waste of money and you should never buy them
It's estimated that half of Americans will give a gift card this holiday season.
It's easy to see why gift cards are appealing. They take the guesswork out of gift buying and ensure that the recipient won't have to make a return. They're also compact and easy to ship or transport.
Despite their popularity, there are many reasons why the effortless gift is a waste of money.
1. A shocking number are never used.
Almost one in three gift cards never get used at all, CBS reported in 2014, citing Consumer Reports. Americans spend $32 billion a year on the cards, representing nearly $10 billion in wasted money for consumers (and pure profit for retailers).
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2. When people do shop with gift cards, they end up spending their own money.
Those who do use the gift cards tend to spend 20% more than the value, according to Investopedia.
CBS also reports that people are more than twice as likely to pay full price for an item when they're using a gift card.
3. Most people say they don't want gift cards.
It's also likely that your gift card isn't appreciated: only 27% of Americans said they would like to receive one this holiday, according to recent data from Bankrate.com.
Most people said they would prefer cash or a tangible gift instead.
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