What to do when you want to give cash

24 Dec

December 24, 2007

By Geoff Meeker

Gift cards have been making headlines of late, and not for their supposed convenience. There has been a backlash against the ubiquitous card, which is supposedly a convenient way to give something special to someone without having to actually choose something.

But the cards have come under fire because of the many conditions that retailers and financial institutions impose upon them, and for the fact that many of us never get around to using them.

One of the most serious restrictions is the expiry date – some cards have a limited shelf life which means that, when you finally get around to using them, they just may be worthless. Others are not transferable between franchise owners, meaning that they might not work in the same stores in different cities, and some can’t be used outside of the country of purchase. Still others charge a monthly administration fee which slowly diminishes the value of the card with each passing month. (If you want to read more about this, just do an online search for ‘gift card pitfalls’.)

But the biggest issue with the cards, in my view, is that many people never get around to using them at all. They poke them away with the best of intentions, then lose them or forget they ever existed. If you haven’t done this yourself, you probably know someone who has.

I recognize that gift cards do have their fans – one U.S. survey found that eight of 10 consumers planned to buy gift cards as part of their holiday shopping purchases – but it takes discipline to use them to full advantage.

Last year in the U.S., an estimated $8 billion went unclaimed, which is free money for business at the expense of the giving public.

There is another, safer alternative, for those who would rather give money than goods. Acxsys Corporation, the company that brought you Interac, is aggressively promoting its Interac Email Money Transfer service.

“Interac Email Money Transfer is viewed as one of the most efficient and convenient web-based person-to-person transfer services in the world, which helps make it such a great alternative to gift cards,” said Barry Campbell of Acxsys in a news release. “With (our service), you’re not restricted to a particular store or expiry date and you don’t have to worry about misplacing a card or about the remaining balance associated with gift cards.”

The company cites its own survey, conducted by the Strategic Counsel, which reports that one in three Canadians would rather receive a gift of money over a wrapped present.

In order for the money transfer to work, both you and the person to whom you are giving money must have access to online banking, and a Canadian bank account. A gift notification is emailed to the recipient, who must correctly answer a security question created by the sender. Presumably, the recipient would also have to enable their own online bank account in order to receive the funds.

“With 91 per cent of Internet users on email and 58 per cent using online banking, Interac Email Money Transfer meets the needs of today’s Internet-savvy consumers, especially during the busy holiday season,” said the news release.

But what about those who aren’t so ‘Internet savvy’ or who view email gifting as a wee bit impersonal?

There is a third alternative which I highly recommend. It can be used in any store, never expires and there are no hidden fees.

It’s called cash. And as a gift, it never goes astray.

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