How to Give People Gift Cards They’ll Actually Use This Holiday Season

Carmen Mandato/ The Penny Hoarder
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Tell me if this sounds familiar.

You open up a Christmas gift. What could it be? It’s small, and it’s light. It’s a gift card! It’s a gift card to a place you never, ever go. Nor do you want to. Then, you smile and say, “Thanks! I love it!” The gift card then goes in your junk drawer — you have one, admit it — never to be used.

You’re not alone. Every year, about $1 billion in gift cards go unused.

If I asked you whether you’d like to receive cash as a holiday or birthday gift, I’m pretty confident you’d say yes. You might even yell, “Make it rain!” I don’t know you that well.

The fact is that almost everybody wants cash as a gift. It’s easy, and you can use it in any increment you want and wherever you want.

But if we all just gave one another cash for gifts, it would just be one big cash exchange. We’d even pay enough attention so we’re giving equal amounts. Where’s the fun in that?

Gift cards are the next best thing. And while they may make a bundle of money for retailers, they really can be great gifts when done right.

How to Choose the Best Gift Cards

Why do we give gift cards instead of cash? They’re really easy, for one. There’s a whole selection next to almost every checkout line. Plus, they fit in a greeting card and can go in the mail. Also we somehow feel that it’s a little more personal than cash.

The best way to truly take advantage of its more personal feel is to pay attention to the person who’ll receive the gift card. What stores do they like? What foods do they like? Here are some easy tips:

  • Do they have a guilty-pleasure store? You know, the type of place where there is nothing a person needs, but there’s still some really fun stuff? Maybe they can’t stop buying books or they love Godiva chocolates. These gift cards are great because they give them a chance to splurge without impacting their budget.
  • Get them a gift card to one of their favorite restaurants. Or, if you know what kind of food they like, give them a gift card to a great place they’ve never been to. The key here is to give a generous enough gift card to cover at least most of the meal. No one wants to go to a restaurant to use a $5 gift card on a $40 meal.
  • Look for gift cards that are good at a variety of locations. Many restaurant conglomerates offer one gift card that’s good at all of their restaurants. For instance, a gift card to Olive Garden is good at other Darden restaurants like LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V’s and Wildfish Seafood Grille. That’s a lot of options.
  • When buying for children, look for gift cards that will give them experiences, rather than stuff. They’ll forget about the ice skates they bought, but if you bought them tickets to see their favorite team or band, they’ll cherish that memory.
  • Find out if there is one particular big-ticket item that’s been on their wish list. Get them a gift card to help them bring that item home!
  • If you don’t know exactly what stores they like, go for something easy like Target or Amazon. Nearly everyone can find something to buy from those retailers without leaving the house.

Do people like receiving gift cards? I asked my Facebook friends to chime in.

“I like them – but I am very picky about what I use them on. If, for example I get a Target card, I make sure to use it to buy something “fun” or “for me”…I don’t just put it towards staple items for my family.” — Heather Buege

“Depends on the gift card. Give me one for someplace I already go or enjoy going. Otherwise, you’ve gifted me a chore.” — Adam Porter

That says it all, doesn’t it? You want your gift to be a pleasure, not a chore.

What to Do if You Get Unwanted Gift Cards

So what do you do when you receive that gift card for a place you have no interest in going to?

  • Check out the place online. Whether it’s a sushi bar or a hardware store, you may see something worth trying out.
  • Regift it. OK, maybe it was a poor choice of a gift for you, but you happen to know someone who would love it. Tuck it away and regift for their birthday or another occasion.
  • Turn it into cash. Websites like Raise, Cardpool and CardCash offer easy avenues to sell unwanted gift cards. The only catch is that you won’t get full face value for your card. But if you don’t want a $30 gift card to the Home Depot, wouldn’t you rather have $24 cash? How much you get typically depends on the popularity of the card.

Gift cards are too easy for shoppers and too lucrative for retailers to go away anytime soon. Make the most of giving and receiving gift cards by simply putting a little more thought into it. Just because something is convenient doesn’t make it a bad deal.

Disclosure: This post includes affiliate links. Adding these links helps us keep the lights on in The Penny Hoarder HQ, which makes it a lot easier to play shuffleboard after a long day of deal-seeking!

Tyler Omoth is a senior writer at The Penny Hoarder who loves soaking up the sun and finding creative ways to help others. He loves receiving gift cards, especially to restaurants and craft breweries. Catch him on Twitter at @Tyomoth.

This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can't personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.