THOUGHTS ON GIFT CARDS

Here is where it goes.

Re: "Do-It-Yourselfer" Father's Day

Post Posted Fri Jun 09, 2017 12:32 pm by nikkinutshop

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If a person gets a gift card they should make a point of using it. Ask if the unspent balance is convertible to cash. Before buying a gift card it should be determined if the card has an expiry date. Has the tax been paid on the value of the card? The gift card holder should not be paying tax twice on each purchase.
A gift card is great for a business. The consumer pays the retailer and buys nothing from the inventory of the seller. If the business exchanges the gift card for product they make a percentage profit. If the gift card is not used, the profit moves way up to 100% for the business.
Spillage is the amount of money left unspent as a result of unused or expired cards. In 2014, spillage was projected to fall under $1 billion, in Canada, accounting for less than 1 percent of total gift card volume.
I prefer to give and get cash. The cash can be spent anywhere and may save money for that other thing at a later date.
There is a huge unused card industry that has gown up around the gift card scam. While the best intentions of many retailers is not to scam the customer, someone has to know that cash in hand and product still on the shelf, guaranteed, is better than a direct money for merchandise.
One of the local well known retailers idea of a gift card was in-fact one of their own credit cards. The card had annual service fees and an expiry date on the unused balance. The fees to administer the card were outside of the balance. So after a time the unused balance would be lost and there would be an additional charge for taking the balance.
Get educated. Be an aware consumer.

Thanks, Nikki! I wondered about all that!

My kids get me ebay gift cards.
The bend isn't out of the plastic I'm already buying something online.

Really cool old automotive and other stuff. One of a kind stuff, it seems, like:
1920 Dudley bicycle/ motorcycle wheel truing stand.
Dudley spoke wrenches.
"Buzz- saw" circular-saw blade holder, cast iron. Old.
1920 Weaver tire changer.
Universal Tool Co. of Detroit manual boring bar w/a zillion adaptors.
On and on.
I had purchased an antique Williams Tool Co. cabinet from England but it was lost.

Thats an interesting read. Paying tax twice?? It does take me a while to realise when i have been to the states in the past, that the price you see is not the price you pay because the tax has to be added. I have been to some places where they break it down on the receipt as city tax and then state tax, i did not realise there were 2 different taxes. I live in England and the tax (20% VAT) is already added to everything, so the price you see is the price you pay, however i could not tell you if there has been tax added to a gift card. I will google. Luke

I can not answer for Canada, I know nothing about that. I can answer for the ones that I have bought, used and received in Idaho. No TAX is charged at the time of purchase for any gift certificate. The Value of that certificate is what is stated or even added to a "debit style card" . When a person uses the card, and they make a purchase, the price of the item plus tax is figured. To give you an idea, My wife and I received two $20.00 certificates to Home Depot. We went and purchased an item valued at $50.00, When the item was rung up with tax added, in our case 6%, a total of $53.00 was owed. Two certificates totaling $40.00 left an amount of $13.00 for us to pay. No one was double taxed. Shoot, I have some certificates for free movie and dinner that I have had for 5 years. They are still good as long as the place is open. If I do not use it and they close/go out of business, that is my fault not theirs. If they were to have money left in that account, That money goes to an account in the state and I would need to apply for a refund based on my certificates. After a set time, the money would go into the general fund.

Here in Canada and I would not be surprised in other areas, there is what is called a goods and services tax. A gift card fall in that gray area of is it a service or goods. Sometimes tax is charged on the purchase of the card amount and sometimes not.
this is where the bind happens. The consumer may not know that the tax was paid on the gift card amount as a service tax. Tax may be charged again at the point of sale if the customer and or the check-out clerk does not know. All I am trying to suggest is, be smart, it is your money get to know how these things work. If you trust someone else to take care of your business, lots of luck with that.

I truly understand your point Nikki, and it is wrong to have a "tax" paid twice on things. I think that your advice might apply to someone getting a card from here for someone there and it is taxed by your rules and then taxed at our end. Kinda defeats the idea of GIFT. Which is why, most times I would just as soon give cash.

It will be interesting to see what others have to say. As I stated, Idaho "rules" I am more familiar with, and would think that any company that does business here would have to abide by Idaho rules, but perhaps only in Idaho?
Any one else have experience with gift cards/certificates?