December 20th, 2002


Annual Rant: Gift Certificates

Gift certificates, as they are commonly practiced, fail to satisfy me.

Gift certificates do have a purpose. In particular, they are very useful when a gift is very perishable (e.g., a live lobster) or when the gift is an experience, like a dinner, or a movie, or something like my gift to Lori years ago of a painting session at Color Me Mine. There really are situations when it's better to give a coupon for an experience than to give the experience at an inconvenient time, and for such a situation, giving a gift certificate could be more thoughtful and personal than a mere cash-equivalent.

But, but, and again but: retail establishments do not offer gift certificates that allow one to give an experience instead of a cash-equivalent. For example:
- I'd like to give a certificate for one project at Color Me Mine--but they only have certificates for dollar values. I'd cheerfully pay $19 or $20 for a project that worked out to 'up to $13 of materials, and up to $9 of painting time.' I've asked, though--Color Me Mine can't wrap their heads around the concept.
- Similarly with restaurants, I'd like to be able to give a gift certificate for 'dinner for two' at a restaurant. I'd be willing to accept a somewhat limited selection, so that the restaurant could limit its risk exposure and not worry about bringing out the Dom Perignon for a gift certificate that cost $25. But I haven't found any restaurant that works that way.
- The movie theater example annoys me most. At Loews, an adult evening ticket costs $8. There's not nearly the uncertainty about the cost of the product that there is for a restaurant of a pottery product. So, I'd like to get someone two tickets to a movie of their choice, and I know that $16 is the right price--but Loews only sells certificates in multiples of $5. Weasels.

Now, there are gift certificates that are just cash-equivalents--but restricted cash-equivalents. And these annoy me, because I think they should be cheaper. Consider these two cases: a) I give someone a gift certificate for $20 at Borders. b) I give the same person $20 in cash. Case a) is guaranteed money in Borders' accounts, with greatly reduced risk and uncertainy compared to case b). So Borders should be willing to be willing to pay a bit for the reduced risk, and be willing to give, say, $22 of books for my $20. I have hardly ever seen this done by stores. (There are some issues with returns and such, but I believe the basic principle is sound.)

There's a third type of gift certificate that is only slightly more restricted than cash. For example, you can buy gift certificates for Giant Eagle, or for Century III mall. These are really no better than cash. (Cash is certainly not the worst possible present--I'm certainly aware of people who have been in tight enough situations that they would rather receive money for groceries than less immediately useful presents.) But these super-general gift certificates say, in effect, "I would just give you cash, but I'm afraid you'll spend it on beer or drugs or other stuff of which I disapprove." Now, sometimes this is the intended and appropriate message, and for those circumstances general gift certificates are appropriate. But it's still not a very heartwarming message to convey.