Avoiding gift cards this season?

As the holiday season approaches people will be out shopping for their loved ones and friends. Personally, I never really know what to get any of my friends or family (partly because I wait till the last minute to do my shopping). Consequently, I usually end up purchasing an assortment of gift cards for everyone. I've thought about giving cash but to me that doesn't seem personal at all. I guess gift cards aren't much more personal, however, it's still a step up from cash right? Anyway, this season I might be changing my ways. I might have to go out earlier and actually buy a few gifts. I'm definitely not going to risk buying gift cards this season!
Recently, I was watching MSNBC and one of the headline stories was about gift cards. Yes, they may be the perfect present for the hard-to-buy-for person on your list. With a gift card you never give the wrong size or color. However, consumer reports has just began a report on warning shoppers about the pitfalls of gift cards this year. Consumer Reports says about $8 billion — or about 10 percent — worth of gift cards given during the 2006 holiday season still have not been redeemed. Some cards were lost, others are forgotten. It seems like we all have a few. The magazine surveyed gift card recipients and found that 27 percent of them have not used one or more of the cards they received last year. Why not?

• 58 percent said they didn’t have time
• 35 percent said they couldn’t find anything they wanted to buy
• 32 percent said they forgot about the card
• 4 percent said they tried to redeem the cards too late — they had expired
• 3 percent said the cards were lost

To launch its gift card campaign, Consumer Reports bought a full-page advertisement in last Tuesday's New York Times. The ad called unused cards “easy money” for retailers.
Merchants want people to spend their gift cards as quickly as possible because gift cards do not count as a sale until they are redeemed. So if you buy a gift card this holiday season and the recipient doesn’t spend it until 2009, a retailer is not going to be able to put that gift card on their books until 2009. Retailers also hope that when you come in with that gift card you’ll spend more than the value of the card. Consumer Reports calls that another downside to giving gift cards.

Furthermore, in many states if a gift card is not used after a few years then it usually becomes unclaimed property and the retailer is required to give the money to the state. However, consumer reports explains that the retailer can still take advantage of the consumer purchasing a gift card by investing that money that's spent on the card. Additionally, with the global economic downturn who knows what companies are going to fail soon? There are thousands of companies struggling to stay afloat as I'm writing this, and if our economy doesn't get better soon many of them will go under. Therefore, they wont be able to honor the gift cards and the Christmas present that you purchased for your friends or loved ones will be pointless! My advice - Dont purchase many gift cards this season!