Gift Cards, Gift Certificates:
Compare, and Weigh the Pros and Cons

Gift cards and gift certificates are
great gift ideas - easy and versatile.
Select with savvy for a
well-chosen gift!

An American Express or VISA gift card or a store gift certificate makes a fine gift, but each has pros and cons. Let's compare store gift certificates (which may also come in the form of a card) with American Express and VISA cards. There are important differences.

How They Work

  • A Gift Certificate in a certain cash amount is purchased in a store or specialty shop, or from a catalog or online merchant. There
    may be a fee in addition to the face value, to cover processing costs. The certificate may or may not have an expiration date.

    The recipient redeems the certificate for a gift of his or her choice, from that specific store, catalog, or website. If the full value is not redeemed, your recipient may receive the change in cash or in the form of a store credit.

    The advantage of a store-specific gift certificate over an American Express or VISA gift card is that it demonstrates extra thought on your part. For example, your nature lover will appreciate your care in choosing a certificate from an outdoor gear merchant.

  • An AmEx or VISA gift card is a prepaid (debit) card, not a credit card, though it may resemble one. It may be used until its value has been fully depleted or until the expiration date shown.

    American Express debit cards can be used at stores and restaurants throughout the US that accept regular American Express cards.
    VISA debit cards, offered by many financial institutions, are good wherever VISA debit cards are accepted. Some (but not all) can be used internationally.

    The advantage of AmEx or VISA is that these cards can be used in many places, whereas a store certificate can be redeemed only at that store or on its website. Many providers offer personalized AmEx/VISA cards at somewhat higher fees; and most offer special rates for bulk orders (ex: for company gifts to employees).

A gift card or store certificate is an excellent choice...

The Pros

Gift certificates and gift cards are growing in popularity among gift givers and recipients alike. For the recipient, they offer the opportunity to select an item that is really needed or wanted, in the preferred style, color and correct size, and at the recipient's convenience.

For the giver, they are quick and easy to purchase. In fact, many chain store gift cards (ex: Home Depot, The Gap) can be purchased at pharmacies and supermarkets.

Gift certificates and cards also eliminate gift wrapping - many are attached to a greeting card and include an envelope. Others come in attractive presentation boxes. And you can avoid shipping hassles associated with bulky gifts by slipping the presentation box into a padded mailing envelope.

The benefits extend to many situations; for example:

  • you are unable to go shopping
  • you have no good idea what your recipient wants
  • recipient’s size, style or color preferences are unknown to you
  • you want to avoid gift duplication
  • you wish to contribute toward an item your recipient is saving for
  • you need a last-minute gift

…but there are a number of drawbacks:

The Cons

  • Gift certificates and store cards usually have expiration dates, and your recipient might wish to delay his or her gift selection for several months. Try to obtain one with a long valid period, and determine if and how any unused portion will be refunded.

  • The issuer may deduct a portion of the value for each month a card or certificate has not been redeemed. If only part of your gift is used with the first purchase, your recipient should be able to spend all of the remainder for at least six months without a service fee.

  • Givers or recipients may be sensitive about the price of a present. Certificates and cards lay it right on the line.

  • Some recipients really hate shopping, even when it’s to choose a gift for themselves.

  • Shipping charges can erode the value of your gift when your recipient shops from a catalog or online merchant.

…so choose with care!

Things to Consider about Store Certificates

Select a store or catalog carrying the sort of merchandise that fits your recipient’s tastes. Find out where your recipient shops, or find a great specialty shop that caters to your recipient’s interests. Or maybe a store where your recipient would like to shop if it were more affordable!

Choose a store that is conveniently located for your recipient. If the person does not drive, be sure the store is near public transportation, or arrange to provide a ride to the store. Or, choose a catalog or online merchant.

Shopping online is convenient and can be done with safety. Please refer to Safely Order a Gift Online for important information about online ordering, and encourage your recipient to do the same.

Minimize the impact of shipping charges by selecting a merchant who bases shipping fees on actual product weight instead of the dollar value of the order. The order page will give shipping information.

A store that carries everyday merchandise may be an excellent choice. A gift certificate from a home building-and-supply or bed-and-bath store is a well-chosen housewarming gift; a grocery store card will be welcomed by a recipient who does lots of entertaining.

Things to Consider about
American Express and VISA Gift Cards

American Express and VISA gift cards are issued by various retailers and financial institutions, each with its own policies and pricing. Cards can be purchased in person or online. VISA may also be ordered by phone. Their websites will help you find providers: at VISA see "Find a Card" and at American Express click the "Store Locator" tab.

  1. Limitations on use:
    The American Express gift card can be used at retail establishments and restaurants throughout the United States. It may not be used at cruise lines, casinos, ATMs or for recurring billing purchases (cellular phone service, subscriptions, etc.) Special rules or steps may be required for gasoline, airline and other purchases; be sure to check the Terms and Conditions.

    The VISA gift card can be used wherever VISA debit cards are accepted (internationally, unless the card states "valid only in the United States"). Special cards are available that can be used at ATMs. Certain rules or steps may be required for use at gas stations, restaurants and hotels; again, be sure to check the Terms and Conditions.

  2. Face value:
    American Express issues cards in denominations ranging from $25 to $5000.

    With VISA, maximum values vary by provider; some go up to $750.

  3. Purchase Fees:
    To purchase either card, there is a "load" fee in addition to the face value of the card. Some issuers base their load fees on face value, because it usually involves more transactions to spend down the higher value cards. Express delivery is usually available for an additional fee.

    American Express charges begin at $3.95 each for their "classic" card, plus shipping. Additional charges for personalized cards and cards for special occasions vary by seller. If you purchase a card in participating in-person locations, an additional fee may apply, but you will save the shipping charge.

    VISA gift cards can be ordered in person, by phone, or online, and charges will vary with each method and with each provider. The load fee may be somewhat higher than American Express, but the ability to use the VISA card in more places may be well worth the extra couple of dollars.

  4. Expiration dates and Refunds:
    The expiration or "valid thru" date means that the CARD expires on that date, but the funds do not necessarily expire.

    The American Express Gift Card is valid for twelve months following date of purchase. At that time, they will issue a new card at no charge.

    Depending on the provider, VISA cards may have 24 months before expiration. If there is an unused balance upon expiration, a fee is deducted and a refund check issued.

  5. Monthly fees (in States where not restricted):
    American Express will deduct a $2 monthly Service Fee from funds remaining on the Card beyond 12 months after it is purchased.

    VISA issuers typically deduct $2.50 per month from funds remaining on the card beyond six months after the purchase date.

In comparing the two, note that VISA charges somewhat higher fees than American Express. On the other hand, VISA is more widely accepted (though American Express reports it is accepted in 1 million places in the US).

There are good reasons to choose either AmEx or VISA gift cards. Compare the terms and conditions, privacy policies, and so on, and base your decision on which gift is best suited to your recipient.

Whether you purchase a store gift certificate or an AmEx or VISA gift card, please read the terms and conditions carefully to be sure you understand how it works, and encourage your recipient to do the same.

Conclusion? A gift certificate or gift card
can be a very
well-chosen gift
when chosen with savvy!

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