Gift Cards May Not Be the Gift to Give This Season
WILLIS: You might want to think twice before buying a gift card for somebody this holiday season. With so many retailers closing shop in this rough economy, that business could be out of business even before the gift card is redeemed. Todd Marks is a senior editor with "Consumer Reports." OK, Todd, tell me, should I just avoid it altogether this year? No, no, none of these cards, right, I mean, too many problems?</s>TODD MARKS, CONSUMER REPORTS: Well, the reality is that gift cards are one of the most popular gifts to give and to receive. People want them, they like them. There are a lot of issues with gift cards and you mentioned a key one, bankruptcies. Many, many companies are either in bankruptcy or on the brink and you never know. Once a company goes belly-up or files for Chapter 11 bankruptcy protection, these cards could ultimately become worthless and you could end up online as a creditor and with that company in bankruptcy court, because...</s>WILLIS: And we know how much money you get for that.</s>MARKS: Oh, if you're lucky, you get pennies on the dollar a few years down the road, because you're on a long list of creditors. And believe it, the consumer's not at the front of that line.</s>WILLIS: Well, OK. So, you know, even so, we're expected to spend some $94 billion on gift cards this year. What would you tell folks? What's the checklist of things to think about if you're going to buy one of these?</s>MARKS: Well, if you're going to buy a gift card, one, make sure it's to a store that's going to be in business. Now, there are no ironclad guarantees, but you can check out the Better Business Bureau, you can find out if there are any complaints about it, have there been issues about redeeming cards, getting refunds or exchanges. So, you want to make sure they're solvent. You also want to make sure that the person on your list is going to use that card. Did you know that one out of 4 people who got a gift card last year didn't spend it yet? They didn't use it, they couldn't find anything they want...</s>WILLIS: That's unbelievable, Todd.</s>MARKS: We do these holiday surveys every year. One out of 4 people haven't used it because it expired, the company went out of business, they couldn't find anything they want, or they lost it.</s>WILLIS: Unbelievable.</s>MARKS: Yeah, it's amazing. So, gift cards are not the panacea a lot of people think they are. But they're convenient and they're easy and they're popular.</s>WILLIS: I need to know, what are the terms and conditions I'm going to face? What do I need to know, here? Because there are some devils in these details.</s>MARKS: Sure, and the devil is always in the details and with gift cards it's bingo, you know? When you're buying a gift card from a credit card company, such as an American express gift card or one from MasterCard, you have to be aware of the fact that they tend to come with strings and conditions. And expiration dates are first and foremost. If you don't use it by a certain time, it may be worthless. Second, they come with transaction fees, service fees, inactivity fees, dormancy fees, all of which can diminish the value.</s>WILLIS: This drives me crazy. This drives me crazy.</s>MARKS: Me too.</s>WILLIS: It can be bad enough, you know, for the person giving the gifts, but what if I'm getting the gift. What should I need know if I'm actually getting a gift card from somebody for Christmas?</s>MARKS: Spend it immediately. Don't wait, don't sit on it, don't put it in a desk, don't try to combine it with anything else. Go out to the store, especially with all of this talk about bankruptcies, the idea is that don't wait to find out if the card might not be worth something, go out there and spend it as quickly as possible, so you don't forget about it and you maximize the value.</s>WILLIS: I love spending it. That's the right answer there, Todd. Sounds like more trouble than it's worth.</s>MARKS: Most of the time it is.</s>WILLIS: Fantastic information, Todd Marks, thank you for that.</s>MARKS: My pleasure, Gerri.</s>WILLIS: Haven't finished your holiday shopping yet? Well, you've still got a little time and we've got plenty of great ideas for any budget.</s>KARA FINNSTROM, CNN CORRESPONDENT: This holiday, there are presents you can give that won't take quite so much from the earth. And joining us now is Jessica Williamson, the environmental Web site, ZapRoot.</s>WILLIAMSON: And Jessica, you found some toys here that are not only cute, but these guys are eco friendly too.</s>JESSICA WILLIAMSON, ZAPROOT: They are. One of the things I wanted to talk about was handmade gifts. A lot of times</s>FINNSTROM: Now, as a parent, myself, I'm really concerned with the materials that these are made from, too.</s>WILLIAMSON: Yeah, a lot of parents are this year. So over here, we have this cardboard dollhouse. You don't have to worry about the toxins because it's made from cardboard and not plastic. The other thing, took, is your kids can only going to use for 10 maybe 12 years, your child does not need this for 1,000 years and that's how long it takes for plastic to breakdown.</s>FINNSTROM: So, not only good for the environment, but good for your child.</s>WILLIAMSON: Exactly, exactly. Another thing that's not only good for the environment, but also good for you is biodegradable soaps and shampoos. People don't realize that each day we're exposed to over to 100 known carcinogens through chemicals and beauty products. You don't have to worry about pollutants and toxins getting into the ocean when it goes down your drain.</s>FINNSTROM: We've moved outside, into the warm sunshine for a look at a couple more gift ideas.</s>WILLIAMSON: OK, this is a Solio and it's a solar-powered handheld charger. And basically, you can charge any hand held device from your computer to your lap to your cell phone all by the sun. Another thing that's going to save your friends some money is this and it's called a KiloWise (ph), and what this does is you plug your appliance into this and then plug it into the wall and it will tell you how much money that appliance is costing you per month.