If cash is everyone's second-best form of payment, then gift cards might fall somewhere below checks and scrip.
In the secondary market for gift card exchanges, a good gift card is at best worth about 92 percent of its face value. This means that when you give someone a gift card, they are likely to place less value in the card then you paid for it.
But some cards are better than others, and more often than not, the most attractive cards are the ones purchased for credit in some of the least exciting venues. According to the people who track these kinds of things, gas station cards are unparalleled in their appeal.
The best groups:
- Gas (Exxon Mobil, BP, Shell, Chevron)
- Big Box Retail (CostCo, Sam's Club, Target)
- Grocery stores (Safeway, Whole Foods, Giant, Giant Eagle)
Not surprisingly, the least-appreciated are generally the ones for retailers that only a few people would hope to visit: Wilson's Leather, Toppers Spa, Worldwide Golf, Lids and Ponderosa.
It isn't a good idea to give someone a gift card for a store that has very expensive prices. You can give someone a card for credit at Tourneau, but not many people are going to put your $20 toward a $2,000 watch. It is the same with Henri Bendel and Talbot's.
The market is even a proxy for good taste. So even if you feel that it would be the right thing to do, don't give your daughter-in-law a NutriSystem gift card. She will like you more if you pay for her next meal at In-N-Out Burger, Melting Pot, Krispy Kreme, or Church's Chicken.
Sometimes membership in a category doesn't hold the same predictive power. For example, Apple Store (not i-tunes) cards are worth more than 90 cents, but Microsoft cards are only worth about 70 cents on the dollar. You will receive more than 80 cents for a card at Tim Horton's, but less than 65 cents for a Peet's card.
I recently received a $50 gift card at Mellow Mushroom. On the open market, it is worth about $32. But I love pizza, so I will be eating a great pie in the near future.