Giving a Christmas gift card from a retail store has always been a must in our household.  There are some of our relatives that buying a Christmas present for is just hard work.  They either buy themselves whatever they want on the spot or they are so finicky that you could never please them.  For my family that may be reading this  — you know who you are and remember that I love you!!!

 

 

 

This year is it a wise to buy a retailer’s gift card?

 

This year there has been a lot of hype, media attention, and blog attention given to the retail gift card.  I’ve even written a little about it in an earlier post. It is a personal decision as to whether you want to give a Christmas retail gift card.  It may or may not be the thing to do.  Some stores are closing local stores or may be going out of business all together.  It’s a normal part of business.  Big retail chains reorganize and close down underperforming stores all the time.  It’s good business for them to do so.  You could even say that it’s “frugal” for them to do so.  But this year with the nation’s economic problems being at the forefront of the news everyday, you need to remember when purchasing a gift card  that it is a reality that the retail gift card that was bought today may not be any good tomorrow.

 

Research, Research, Research

 

Now I know that it takes some of the fun out of Christmas to have to do some research into whether the store is going to be in or out of business after Christmas, but it is the only prudent, frugal thing to do.  You want to make sure that you are comfortable with the company’s ability to honor the gift card that you buy.  There are some retail stores, that although they know their financial picture is not too promising, still selling gift cards. 

To help you out, I’m going to list some of the companies, which according to Snopes, are either cutting back or shutting down all or some of their stores.  A shortened edited version of the Snopes report is below, or click the link and it’ll take you to the original story.

1. Circuit City – filed Chapter 11 bankruptcy and is closing down stores across the nation.
2. Ann Taylor announced in January that they were closing 117 stores.  They have approximately 966 locations according to Snopes.
3. Eddie Bauer is closing  or has already 29 stores out of approximately 376 locations.
4. Cache’ has closed 14 underperforming stores but has opened new stores other areas of the country. 
5. Talbots, Inc. is seeking to sell off its chain, J. Jill.  Talbot’s has already shed Talbots Kids, Talbots Mens and it’s U. K. businesses, plus closed an additional 28 Talbots stores out of 1,400 total outlets.
6. Sprint announced in January that it was closing 125 of it’s 1,400 retail outlets.
7. Macy’s closed 11 of it’s approximately 850 outlets in 2008.
8. The Movie Gallery/Hollywood video rental chain filed for Chapter 11 bankruptcy protection in late 2007.  It currently operates about 3,500 outlets.
9. The Gap, which includes Old Navy and Banana Republic, closed 17 stores, but opened 37 more during the third quarter of 2008.  It has a total of 3,190 outlets.  It plans to close another 115 underperforming stores, but open another 100 in areas that it feels may be better performing areas.
10. Zales Corp., which includes Zales Jewelers, Zales Outlet, Gordon’s Jewelers, Peoples Jewellers, Mappins Jewellers, and Piercing Pagoda, closed approximately 105 out of 2,130 retail outlets in 2008.  Half of them were kiosks and half of them were retail stores.  The company also opened 100 new outlets in 2008.

 

What happens if you purchase a gift card and the local store closes but not the entire chain?

 

In most cases, the individual that receives the gift card can use it online or if there is another store in a neighboring city or town, it would make a nice day trip to travel and use it. 

 

What am I going to do this year for those I usually buy gift cards for?

 

For me, this year I probably will play it safe and purchase the Visa gift cards.  Even with that, I still have to be careful.  There may be hidden finance charges or the card may expire if not used within a certain amount of time.  Ok, so I gave away what some of you are getting – but you still don’t know how much I’m going to put on them!!!  There still going to be a little Christmas surprise!!!

 

Till next time,

JT Locke

The Frugal Housewife

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