Cash and carry

Giving cash saves money, time and makes sure people get what they want, so why isn’t it more acceptable?

Here’s an idea for the perfect gift certificate: It comes in $5, $10, $50 and $100 denominations. This holiday season, give cash.

Crude? Cash can be spent anywhere and everywhere. It can be converted into any sort of gift that fits your heart’s desire, but it has a bad reputation. “A gift card is much more elegant than cash,” says Adeodata Czink, the president of etiquette consultant Business of Manners. Apparently, there is also a hierarchy of gift cards. “Indigo bookstore is more elegant than Tim Hortons,” she says, adding if you must give cash, make sure you hand over crisp bills in a nice envelope.

Louise Fox, of the Etiquette Ladies, says we’ve never liked cash as a gift because it seems thoughtless and that applies to gift certificates to some extent. “It was the easy way out and didn’t require much effort. But now, let’s face it, people want to be a little more practical. Gift cards are now deemed acceptable,” says Fox, adding the gift card can be focused on something specific, which conveys more thought.

Retailers, of course, love gift cards and with good reason. Canadians buy about $7-billion to $8-billion worth of them annually. Gift cards provide a tiny sales bump in January, normally a dark time compared to the Christmas season.

The attraction for consumers is less clear. Gift cards don’t expire anymore, but some have absurd transaction fees that kick in after they haven’t been used for a while and the prepaid credit card gifts come with upfront fees. There’s also the fact about 10% of gift cards are never cashed, says John Williams of the retail consultancy J.C. Williams Group. “They’ve got their money,” he says about retailers, who nevertheless record an outstanding gift card as a liability.

There are sites that allow you to exchange gift cards, including cardswap.ca in Canada. You get cash for your unused gift card, but never for the full amount. Even if you buy someone the “right” gift card, they are unlikely going to use it as intended, since users will either have to top it up to get something they actually want or take a haircut on the residual amount.

But it’s only going to get easier to give gift cards, since digital transfers via email are become more popular. “The digital side of the gift card market is growing more than anything,” says Frances Ho, president of Cardswap Inc. Yet it’s really hard to understand how this is much different than sending someone a bank transfer. Ho says her company is going to cater to the digital market by creating a sort of virtual product that includes a personalized message. “We wrap in a way that says you’re special, not just a $50 PayPal transfer,” she says.

That sounds nice, but I’ll take my gift certificate with a picture of the Queen or a Prime Minister on the front.