Gift Card Holiday Shopping Guide

With Thanksgiving already in the past, holiday shopping is on the minds of many. You might have gotten off to a solid start but have a few people left on your list that have you stumped when it comes to deciding what to get them. One of the simplest ways to check them off as complete is to pick up a few gift cards. Clearly, they have become a go-to gift given that Americans spent nearly $46 billion on gift cards last year. So it should come as no surprise that you’ll hear a lot more about gift cards as November rolls on. This is particularly true of your Facebook friends and family, who are probably choosing sides with one camp believing gift cards to be far superior to traditional gifts and the others finding them incredibly impersonal. This guide will go over the case for and against gift cards and give you some tips on how to save money when shopping for them.

The case for gift cards

Gift cards are more personal than cash because they show some thought about the recipient. Gift cards are also more secure than cash, particularly when being shipped in the mail system. They also have a favorable impact on your gift budget as opposed to bulkier gifts because shipping costs are much lower.

Gift cards also solve a persistent economic problem that makes an appearance in long-form think pieces within articles in the Atlantic or Slate every holiday season. Those pieces are usually accompanied by a few days of Facebook shares and retweets on the topic: deadweight. This theory states that a gift giver can’t give an economically efficient gift because, if the item on which you spend $100 is worth $100 to the recipient, they would have bought it for themselves. How many times have you received a sweater that doesn’t fit or a new gadget you don’t want? Or how often have you received a gift that is close to what you wanted, but not quite right? It happens. In fact, an entire market exists for B-movies that are designed to look like the year’s most popular films, mainly to fool the unwary shopper at holiday time. Gift cards solve this problem by letting the recipient choose his or her own gift; just ask any 11-year-old who gets a copy of “Triassic World” or “The Revengers” this year.

The case against gift cards

Gift cards are impersonal compared to actual gifts. Nothing shows your thoughtfulness like the perfect gift. If you want to make someone happy, the feeling of opening the big box will always beat out opening an envelope. Finally, it’s really easy to create an awkward situation of imbalance. When you receive a gift card for $100, but you gave that person one for $50, you end up feeling guilty. When the opposite occurs, it’s like you bought them a $50 gift and they got you nothing. Putting a firm price on gifts makes any discrepancy very apparent.

As for deadweight, gift cards minimize the problem, but don’t eliminate it. They still have some value less than cash (whether perceived or real), so you’re not fully realizing the economic potential of your gift. In fact, the only way to fully beat deadweight is by giving a gift. You can get them something they don’t know about, taking advantage of imperfect market knowledge. You can make them something, taking advantage of the value of your time. Or, you can buy them something they wouldn’t buy for themselves, taking advantage of some people’s unwillingness to indulge. By the way, this paragraph is exactly why no one likes economists and why no one ever reads the articles on deadweight: too much rationality and not enough jolliness.

How to buy a gift card

Buying gift cards is easy, of course. But that doesn’t mean you’re doing it right. In fact, you shouldn’t pay full price for a gift card if you can avoid it. Use gift card websites like or to purchase gift cards at big discounts, sometimes as much as 50% off. The sites offer protection from scams, and if you end up with a gift card for an odd amount, you can always use that gift card to buy a gift card from the retailer. So, if you want to give a gift card to The Gap for $100, for example, you might find one that’s actually for $112, purchase it for under $100, and save the extra value for yourself. You can often get larger gift cards at even steeper discounts, then turn them into multiple smaller gift cards.

Other ways to save money include looking for promotions. Many chain restaurants offer gift card bonuses. For example, suppose you buy $100 worth of gift cards to a Chili’s. You might be able to get a free $25 card for yourself. It’s never a bad idea to get a free dinner, and during the busy holiday season, it’s even better.

Resource One Credit Union also offers VISA gift cards that you can purchase at any branch location.

Hopefully, this guide will make your holiday shopping smooth and easy. This season shouldn’t be about stress and pressure. If you find yourself overwhelmed, take a break and drink some eggnog. If you find yourself short on cash, check out our Christmas Club accounts, so you can be set for next year.


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