Industry Insider Warns Against Which Gift Cards You Should Avoid Buying This Holiday Season

Updated November 14, 2017

With the holiday season quickly approaching, it’s time to start thinking about gift giving. When you find that a friend, family member or co-worker is difficult to buy for or you just run out of time, gift cards always seem like a safe bet.

This allows the recipient to buy exactly what they want. Easy, right? Turns out there are some gift cards you shouldn’t buy, however, so take note.

According to Clark.com, money expert Clark Howard believes that all gift cards are high risk in terms of the value turning out to be worthless. He explained: “There has never been a year that it has been more dangerous to receive or to give gift cards for restaurants and retailers. Both industries are having a terrible time right now.”

Some major retailers that have closed stores in 2017 include Sears, J.C. Penney and Macy’s, as well as smaller retailers, such as The Limited, Wet Seal and American Apparel. Restaurants like Applebee’s, Outback Steakhouse and Joe’s Crab Shack have also seen closures.

If you buy a gift card and the recipient doesn’t use it, they may find themselves unable to take advantage of it if a store or restaurant location near them has closed.

Question of the week: If you could take a vacation anywhere in the world, where would it be?

Clark explained: “Someone who knows me well gave me gift cards for an ice cream parlor that I really liked — past tense. When I finally went, it was closed and the money was gone.”

You may be more secure in getting gift cards if you know that the recipient will use it quickly and reduce the risk of the card going unused before it’s too late. There definitely is some risk involved, though some larger store chains that haven’t faced closures in the past can be better bets for gift cards.

Clark also recommends avoiding the Visa, Mastercard, or American Express prepaid cards because there are usually fees associated with buying them. He also notes: “I have a card somebody gave me that still has $2.50 on it. Everywhere I go and try to use it, I get declined because I can’t find anything that’s less than $2.50.”

His recommendation instead? Good old fashioned cash… acceptable anywhere, never expires, and there are no fees.

Those commenting on the story about gift cards weighed in with their thoughts, including one person who explained how to use that gift card with a small balance: “Because you only have $2.50 on a Visa card doesn’t mean you have to buy something for $2.50 or under you just tell the cashier that that’s all you have on the card and they type that into their POS and edit. It subtracts $2.50 from your total and then you pay with some other form of payment afterward…  You could even get $2.50 worth of gas using the Visa card and that could get you 10 miles easily if you own a Prius. I don’t even know how many miles, probably a lot.”

Another commenter advised: “Stick to major retailers. A Walmart, Best Buy, Apple, or Amazon card is a 100% safe bet. Sears, KMart, JCPenney, not so much. Use your brains people.”