The gift that keeps giving

Daniel Gross thinks Gift Cards are evil. His criticisms?

First off, Gross thinks they’re the “lazy” gift.

What do you buy when you’re too lazy to find a real present? Probably a gift card. In a Christmas shopping season that lacked a must-have product, the most successful item may have been that nondescript, infinitely malleable slice of plastic.

Which could be the case, though they may also reflect that the giver knows the sort of thing the the recipient likes (books, clothes, etc.), but aren’t specifically aware of what they really want, or don’t already have.

Of course, Gross tries to have it both ways, indicating that they could be an insult, too:

Finally, depending on the recipient’s self-esteem and level of paranoia, gift cards can seem a wee bit paternalistic and controlling. Gift cards are tailor-made for recipients who are irresponsible or deficient in taste and self-awareness?or who are simply prone to feeling that way. Give your teenager $50 and she might blow it on midriff-baring halter tops at Abercrombie & Fitch. But that J. Crew gift card can be spent only on presentable clothing. Dismayed that your boyfriend’s recent reading list extends only as far as Maxim? A Border’s gift card could send a message. For the insecure male on your list, a Thomas Pink gift card could be a not-so-subtle hint that his shirts are blighted with ugly stains.

Sure. And the same could be true for any gift (e.g., giving your boyfriend a specific book, or dress shirts, etc.).

Okay, well, that’s not the worst part of it. The worst part is because it provokes extra buying.

And gift cards frequently carry a price for their recipients. Walking into a store with free money in your pocket is like walking into an all-you-can-eat buffet after fasting?you’ll feel psychologically impelled and entitled to consume more than usual, because the short-term cost will seem lower. “When customers go into the store, they don’t feel constrained to just stick to that card,” said Karen Larsen, vice president of global marketing and business development at ValueLink.

That’s one of the reasons retailers issue gift cards in low denominations. The Neiman-Marcus $50 gift card won’t go very far on its own. Ditto for the $10 card at Wal-Mart. Indeed, ValueLink said that 55 percent of those in its survey spent more than the initial value of the card they received. (In an exquisite example of how commerce blasphemously adopts sacred language, such incremental spending is referred to in the industry as “uplift.”) Dan Horne says that “the evidence is that there is incremental spend of 40 percent.”

Gads. You mean that folks treat a gift card, not as a gift per se, but use it as a 60% discount on goods at the shop in question? How unspeakably evil!

(Oh, and by the way, while “uplift[ing]” is sometimes used in spiritual contexts, it’s also a geological term and, in fact, can just generically mean “elevating.”)

Oh, but that’s not the worst part — because gift cards actually benefit the retailers, and thus are unquestionsably absolutely evil!

Buy a gift card and you’re essentially lending cash to the retailer today that is paid back through merchandise tomorrow, or next week, or next month. ValueLink reported that 27 percent of those in its survey blew the cards out within seven days, and another 31 percent did so within a month. Which means that about 42 percent of cards retained some cash value on them for at least a month. Wal-Mart and Neiman-Marcus can borrow all the cash they want from banks or the bond market on rather favorable terms. Do they really need us to extend short-term interest-free loans to them?

Wow. So it benefits the retailer. So freakin’ what? It sounds like a clever move on their part (which also incurs some accounting costs, too, but never mind those). That doesn’t make it evil, just not altruistic. Which is usually the case with business. And ditto for the critique that gift cards encourage folks to come in and spend (additional) money during slow post-Christmas months.

My guess? I think Gross didn’t get enough gifts himself for Christmas …

(via J-Walk)