It’s likely that at some point during this past holiday season you either gave or received a gift card. Gift cards are increasingly popular gift options because of their convenience, flexibility, versatility, and small size. This year I received one gift card (for Kohl’s Department Store) as a Christmas gift. I also got a $10 gift card in the mail from J.C. Penney in early December. I haven’t spent the Kohl’s gift card yet, but I did spend the J.C. Penney card. Let me tell you a story about how that went.
How three annual shopping trips add up
I my home town we have a very small-sized J.C. Penney. I almost never go there. It’s crowded, there’s not a huge selection, and frankly I don’t think the prices are all that great. But every year I’ve lived here I’ve received a $10 gift card in the mail from J.C. Penney in December. How can I pass up free money, right? So each December I make my annual trip to this store I really don’t like in order to spend this ‘free’ money with only a vague plan as to how I’m going to spend it.
Each year I’ve purchased one clothes item. The first year it was a lace skirt, the second year a pair of high dress boots, and this year a pair of black dress pants. The prices of each item before the gift card were $25 for the skirt, $40 for the boots, and $20 for the pants. How do I remember all this so well? I have a good memory. But that’s not my point. My point is in the math: $25 + $40 + $20 = $85, while $10 + $10 + $10 = $30. Now subtract $30 from $85 and you get $55. Wait a minute, I thought J.C. Penney was giving me FREE money? How did I end up spending $55?
Today I’d like pose a question to Lifestyles of the Organized readers. Do gift cards help us or hurt us in the long run? When we are trying to be frugal spenders, getting free money in the mail can be a great thing. But what happens when we spend over that free money amount? Would we have bought that item anyways with or without the gift card? In my case, I think the answer is no—I bought all three of those clothes items because of the gift card, not because I needed them or had a previous plan to buy them. But in hindsight I’ve gotten a lot of use out of those clothes…so was it a poor spending choice or not?
What do you think?
Coming up next week
After collecting some insight from readers this week, next Friday I will present some of my thoughts and yours and attempt to come up with sound solutions about how we can use our ‘free’ gift cards in a truly frugal way.