Is the Popularity of Gift Cards on the Decline?

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In a recent survey, nearly half of adults said they received a gift card during the holidays last year. That’s a tremendous number of people. Nonetheless, there’s reason to believe that gift cards aren’t quite as hot as they once were.

According to Consumer Reports‘ holiday survey, 48% of adults were presented with at least one gift card during the winter holidays of 2010. Presumably, these recipients were quite happy with their gifts. Another survey, this one from the National Retail Federation, notes that gift cards have been the top item on consumers‘ wish lists for five years in a row.

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In light of such stats, how could it be possible to think that consumers are tiring of gift cards? Well, CR points out that gift cards aren’t quite as popular as they were in 2007, when a peak percentage of 62% of adults received them during the holiday season.

And why are people giving out fewer gift cards? In all likelihood, it’s because they have been around long enough for people to fully realize how they’re used, or how they’re not used, as it were.

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In the CR poll, 25% of people still have at least one unused gift card hanging around since December 2010. Of that group, 55% have two or more unused gift cards.

Gift cards are promoted as being just as good as cash, and yet consumers tend to spend them in ways they’d never use physical greenbacks. One study demonstrated that people buying things with gift cards were 2.5 times more likely to pay full price compared to shoppers making purchases by other means.

It’s not hard to see why retailers love gift cards: They result in shoppers spending carelessly, and sometimes spending money and getting nothing at all in return.

Why do gift givers and gift recipients like gift cards? One big reason why people buy gift cards is that they hate the idea of buying a gift that’ll be wasteful—because the recipient won’t like it. But consumers typically use gift cards in frivolous, wasteful fashion as well. Take it from CR’s shopping expert:

“Gift cards are something of a double-edged sword,” says Consumer Reports retail expert Tod Marks. “People love them, but often the cards end up collecting dust in a drawer. Our study also shows that two-thirds of people who get a card end up spending more than the card’s face value, so in effect they’re paying for their own present.”

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Even if gift cards’ popularity is on the wane, plenty of them will be given this holiday season, and for many more to come. Why? The entire gift-giving tradition all but promises poor value for the spender and recipient alike. Givers rarely know exactly what recipients want; even more rarely still bide their time to get the best price on exactly what the recipient wants. A study from last holiday season showed that the typical gift is valued by the recipient at 18% less than what the buyer actually paid.

Therefore, it’s typically the case that money is spent frivolously or totally wasted in these exchanges. Understandably, most recipients would rather decide how and when to do the wasting, with the help of a gift card.

Why not just give cash? That’s an entirely different conversation.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.