Pros and cons of gift, prepaid cards

Who doesn’t like money? The near-universal appeal of cash has made it a popular gift for special occasions since the Lydians minted the first coins in the 7th century B.C.

But cash isn’t without its drawbacks, notes Consumer Reports. If it’s lost, it’s gone forever. It’s also a gift that tends to be forgotten almost as soon as it’s put into a wallet.

Consumers who want to give cash for the holidays should also consider gift cards and prepaid cards. Here’s what Consumer Reports recommends considering when deciding between these options.

Gift cards

• Pros. In a word: convenience. Just grab merchant cards or payment network cards (American Express, Discover, MasterCard and Visa) at a drugstore, retailer or supermarket. They can also be purchased online and sent to you or your giftee by mail or email.

• Cons. Merchant cards can be used only at the walk-in or online store of the issuing retailer. If the company goes out of business, the recipient might not get the full value of the card, or it might become worthless. And the merchant might not be a favorite of your intended recipient.

• Security. Some issuers won’t replace a lost or stolen gift card, the Federal Trade Commission says. Others will -- with proof of purchase and the card’s ID num-