Gift card sales have boomed in the last few years. In 2020, gift card giving was the go to item for Christmas and birthdays as shoppers avoided stores and even holiday gatherings due to the COVID-19 pandemic.

Due to supply chain issues in 2021, many gifts were unavailable and gift cards were again popular as many consumers hoped their friends and loved ones would be able to make their desired purchases when items became available.

This holiday season, as inflation looms heavy, gift cards are once again predicted to be the gift of choice for many consumers. While it’s difficult to buy gifts in normal times, with inflation at a record 40-year high many consumers are concerned about being able to buy gifts and stay on budget. Gift cards may seem like an easy way to avoid spending additional money on gift while still offering something of value… but there are many drawbacks to gift cards.

But Gift Cards are Not as Fantastic as They Seem

There are a lot of reasons to see gift cards as a good gift option. They are easy to buy, don’t need to be wrapped and they are convenient. But the truth is you might be throwing your money away. Billions of dollars in unused gift cards go to waste each year in the US every year.

Nearly half (47%) of Americans have at least one unused gift card, voucher or store credit sitting in a purse or wallet, or collecting dust in a drawer. And eventually those unused gift cards expire, which means the recipient loses their gift while the business gets to pocket the value of the card.

Most gift card recipients work hard to make a purchase that stays within the card’s limit. If they purchase something that is less than the value of the card, the remaining balance often languishes. Those who can’t find what they want that is within the price range typically spend 40 percent or more over the value of the card.

But the biggest reason gift cards aren’t as great as gift givers may think is that it forces the giftee to make their purchase from a specific store.

Cash is a Better Gift Option

While it may not seem like you put much thought into a gift if you give cash, it’s actually a better deal for the recipient. Providing cash to friends and family means you are looking out for the short or long-term worth of the gift you are giving. Cash doesn’t expire and can be used for anything the receiver desires – whether that’s something extravagant, a meal, a toy for a child or rent.

Some might argue that gift cards look nicer. But you can’t fold a gift card into a fancy bow, and you can just as easily dress up cash with a fancy box, card, envelope or get some great ideas on Pinterest as you can some rounded-cornered piece of plastic.

But one of the best reasons cash is a better gift option is that it’s exciting to get cash and its ongoing use by every generation. Cash use grew to 22 percent in 2021. Americans 18-44 usually hold around $50 on-hand at any given time and Gen Z, especially, is beginning to discover the true value of cash when it comes to budgeting and gifts.

This Holiday Season, Choose Cash

Inflation and supply chains issues may make gift cards an attractive option this year. But stop and think about the difficulties gift cards really create for recipients. Rather than putting limits, expirations and responsibilities on your friends and family, instead consider giving them the freedom the gift of cash offers.

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