It’s holiday time. Many stores are pushing gift cards and gift certificates. I heard a radio ad for a lottery gift card! You give someone a gift card so they can buy lottery tickets. Isn’t that insane? The lottery has long been said as a tax on the poor. You give someone a gift so they can pay more taxes? Makes no sense.
I wrote about gift cards last year. I still think a check beats a gift card in many ways. There is value in the freedom to spend the gift amount anywhere someone wants. When you lock that down to a particular store, especially to a high-priced store, you lose that value. Also, a check encourages savings — you deposit a check. A gift card requires spending — you buy something with it.
I said last year if one must give a gift card, an Amazon gift certificate probably comes up as the next best choice because Amazon sells many things at good prices. Once a gift certificate is added to an Amazon account, it will be selected as the default payment option when you buy something the next time. It will be spent first. You won’t have this forgotten or misplaced gift card breakage problem.
I have a couple of better ideas this year. I don’t see either of these implemented yet. If any company ends up doing these, please remember this is prior art and send me your royalties. 🙂
1. Bill Payment Gift Certificate. You buy a gift certificate from a bill payment provider, like CheckFree. They give you a code which you give to the recipient. The recipient redeems it and applies it toward any bills.
Benefits to the gift giver and the gift recipient: no waste on gifts. If someone helps pay my bills, that’s a big gift.
Benefits to the bill payment provider: membership growth; fee revenue from businesses accepting bill payment.
2. Mutual Fund Gift Certificate. Fidelity or Vanguard, listen, here’s how this gift product will work:
– An account holder designates one or more shares of a mutual fund from their existing holdings as a gift for someone else.
– The mutual fund company sends a nice letter or card with redemption instructions to the purchaser or directly to the recipient.
– The recipient enters their brokerage account info (same company or elsewhere). The shares will be transferred into the recipient’s account internally or via DTC. If the recipient doesn’t have an account anywhere, they can open one with the same company and have the annual fees and minimums waived for one year.
Benefits to the gift giver and the gift recipient: a gift that increases in value over time.
Benefits to the mutual fund company: attract new customers.
What do you think? If these gift cards are available, will you be interested in buying one? If you received a gift like these, will you be happy?
Refinance Your Mortgage
Mortgage rates hit new lows. I saw rates as low as 3.25% for 30-year fixed, 2.625% for 15-year fixed, with no points and low closing cost. Check mortgage rates in your state.