We all want to give the perfect gift. With that desire comes the fear of getting the wrong size or an item the recipient already has. How do we avoid all of that? Cash and gift cards are often the best alternatives. But is it better to give cash or a gift card?
Although gift cards have grown in popularity in recent years, cash is still a better gift option. A cash gift gives the recipient the freedom to use it anywhere, and get whatever they want. Also, cash gifts present with the opportunity to save for later use or invest for profit.
In this article, weâll consider why it is better to give cash than gift cards. Weâll see why gift cards are better in some situations and the problems that often come with them. Letâs get into it!

Is it Better to Give Cash or a Gift Card?
Before we even begin to answer the question, letâs get one thing out of the way. Both cash and gift cards are fantastic and acceptable gifts.
Gift cards have grown to become a go-to option for gift ideas. Thatâs largely because many people find them extremely resourceful. Like, they are almost the best solution for the usual dilemma of giving gift items. You could just avoid the awkwardness of giving a terrible gift by handing out a gift card.
While gift cards are tremendous in their usefulness, cash gifts are more ideal in most situations.Â
Why Cash and Gift Cards?
For several generations, the perfect idea of a gift has been tangible items. Thereâs this unbeatable rush of adrenaline that comes with opening a gift box to find out whatâs inside. Also, thereâs the Christmas tradition of opening up presents after the big day.
Also, many people believe that tangible gifts are more thoughtful. Thereâs no denying that a lot of thought often goes into picking a gift for a loved one. When you include the time spent shopping, thatâs usually a lot.
However, all of that has started to change in recent years. People are getting used to the idea that you give cash or gift cards as gifts. Of course, they donât pass as the most typical presents to give during holidays or celebrations, but they are perfectly acceptable.
Cash or gift cards come with lots of benefits over traditional gift forms. You have no idea the recipient is going to like the item you buy from the shop. Why not get your loved one cash or gift cards to get whatsoever they want?
While thereâs no debate on the acceptability of cash and gift cards, the question is which one is better. The answer to that will largely depend on the specific situation where you intend to give either of them.
Why it is Better to Give Cash
Cash isnât the best gift choice for every occasion. In some instances, youâd be doing yourself a lot of favor by not giving cash.
For example, cash will be a terrible idea for a wedding anniversary night. A nice piece of jewelry will be a better fit. When it comes down to cash and gift cards, there are situations where the latter is preferable.Â
Your child has been ill at the hospital and the nurseâs care has been commendable. On the day your child is to leave the hospital, you decide to give the nurse a âthank youâ gift for the tremendous care. A wad of cash will be a terrible idea because such professionals canât accept cash gifts. So, what do you turn to? A gift card!
However, you can count with your fingers scenarios where cash gifts are inappropriate. There are often some problems with cash gifts, the lack of flexibility, for example. Yet, your recipient can cash anywhere, anytime. With gift cards, your recipients are bound to just a single or a chain of one, and thatâs all.Â
Recently, some gift cards allow for use virtually in every store where regular cards go through. But you have to pay a fee for these types of cards. Meanwhile, with cash, you never have to worry about that.Â
Many people would also argue that cash gifts are not as safe as gift cards. Thatâs because many stores offer some form of protection if you misplace or lose your card. You donât get that kind of security with cash that gets missing from your pocket. Yet, you have no guarantee of replacement if your gift card gets missing.
Here are reasons why itâs better to give cash:
1. Cash can be used anywhere
Unlike gift cards, cash can be used anywhere â except, of course, in stores that do not accept cash. That ensures your recipient isnât limited to a particular chain of stores. They can shop anywhere they want to and that freedom is just incredible. Although cash gifts may seem impersonal at times, the recipient is always going to find a use for them.
2. Cash recipients choose what they want
With cash, the recipient can get whatever they want. While gift cards serve the same purpose, thereâs no guarantee the affiliated store has the item your recipient needs. Your cash gift recipient can go to any store to get the specific item they really need.
3. Recipients can save or invest a cash gift
Thereâs no way one can invest in a gift card! The recipient may not have an urgent need for the extra cash. They can choose to put the cash away in a savings plan or grow it an investment package. That gives them the leverage to not only grow their finances but access it at a much later date. Thatâs why cash gifts have a longer shelf-life than other gift types.
4. No fees
Unlike gift cards, you donât have to worry about fees when giving cash gifts. Just put the money in an envelope or whatever package you choose, present it to the recipient, and youâre good to go. You can be assured of the recipient getting the full monetary value.
When You Cannot Give a Cash Gift
Although cash is an acceptable gift most of the time, there are some situations you better avoid. One of such is giving a holiday present to your childâs wonderful teacher. While the gesture may be completely honest, itâs inappropriate to give your childâs teacher a cash gift. Itâs often perceived as an attempt to buy the teacherâs favor.
Another situation, as mentioned earlier, is giving gifts to nurses, doctors, and other health professionals. Itâs often against professional ethics for these individuals to accept cash gifts from you. You may want to consider other thoughtful gift ideas.
Why Give Gift Cards Instead of Money?
The entire gift card industry is a huge one. With a projected industry spending of $160 billion, gift cards are more than colorful cards being flaunted at stores. There are tons of virtual and physical gift cards in the world today. Thankfully, many department stores and restaurants are opening their doors to them.
This is no surprise as millennials, with their high retail shopping activity, love to use gift cards. Whatâs a bit surprising is that even older folks absolutely love the idea of using these cards.
Year after year, the statistics for gift card users continue to rise. More people than ever desire a gift card as a present. According to the National Retail Federation (NRF), gift cards are the most desired gift item for more than a decade in a row.
People give out gift cards during the holidays more than any time in the year. Thatâs because people shop more during the holidays and they need all the financial assistance they can get. Gift cards are a convenient way to come through for family and friends.
Besides being a popular holiday gift, gift cards are becoming common anniversary, birthday, and wedding gifts. It may not be the best choice for every occasion, but certainly not the worst one.
Things to Consider Before Giving Gift Cards
Although gift cards continue to comfortably sit atop most peopleâs wish list, theyâre things you might want to consider before giving out one. These issues might push you towards considering cash as a better option.
One of the issues is whether the recipient will actually use the gift card. Many people decide against traditional gift items because of the recipientsâ tendency to never use them. It turns out that the same is true for $1 billion worth of gift cards every year.
There are several reasons people never get to use their gift cards. People could forget they even have them, let them expire, or fail to use the entire amount in the card.
Considering the huge total spending on gift cards by individuals, $1 billion doesnât seem like a big loss. But the fact that companies go ahead to lay claims on these unused gift cards makes that deficit significant. What that means is that your money can go to these companies without the recipient actually getting value for the money.
You may also want to be careful about falling for gift card scams. According to Consumer Reports, criminals can use your gift cards online or tamper with them at a store. Buying a tampered gift cards translates to your money going down the drain. There are a plethora of gift card websites that are actually scams. With an estimated 50% of the American population, thereâs a need to be extra careful.
To avoid gift card scams, ensure you buy them directly from trusted retailers and chain restaurants online. Also, avoid in-store gift cards, which have their PINs and numbers carelessly displayed to the general public. Advise the recipient to change the security code as soon as they get the card.
In addition to credit card scams and lack of use, other problems with credit cards include theft and loss. You might want to factor in all of these when deciding on whether to go with cash or a credit card.Â
Why Do Companies Give Gift Cards Instead of Cash?Â
For what seemed like forever, companies turned to cash as the best option for annual bonuses or rewards. There wasnât anything intrinsically wrong with that. Who wouldnât want that offer a plaque that would likely be of no value after the presentation? However, in recent years, many companies are turning to gift cards as the preferred option for rewarding their employees.
So, why are companies giving gift cards instead of cash? Weâre going to look at some reasons many bosses consider gift cards a better option than cash:
1. Viral ValueÂ
In many companies, cash rewards often come with the perception of compensation. For that reason, most employees donât even want to talk about it. The perception of gift cards is clearly different. Most recipients will be more than willing to discuss with other employees what they did with their gift cards.
In turn, employees can openly talk about the value of the gift card. The discussions can go into how to earn the gift card and all, which is the type of talk any employer will love. The result is that employees are likely to be motivated to give their best, with their eyes on the next gift card. You donât get that with all the taboo that revolves around cash rewards.
2. Trophy Value
The reason plaques hold a strong place during award shows is the trophy value they bring. Winners could display them in their homes and remember the moment forever. In the workplace, plaques donât cut it for many people. However, gift cards would. The item they buy with the gift card could stamp the company in their hearts forever.
Of course, you canât always guarantee theyâd get a great time to serve that bonus, itâs far better than a cash reward. An employee is less likely to remember a cash bonus spent on entertainment than a gift card they spend on a PC. This trophy value that comes with gift cards is one of the biggest reasons companies opt for them.
3. Beneficial to Companies
Now, this is what about what employers stand to gain when they give out gift cards. Cash awards can cause a lot of problems and workplace acrimony. All of that can be avoided with a more workplace-acceptable option like gift cards. Besides, many organizations report that itâs more cost-effective and less bureaucratic to issue gift cards to employees than cash rewards.
Interestingly, one study reports that over 95% of companies that give gift cards consider them to be as effective as cash â if not more. Since thereâs nothing to lose with these cards, why not go with them?
Another area companies benefit from giving gift cards is brand building. They can partner with a sponsor organization to provide gift cards for their employees. This allows companies to form a long-term partnership with leading brands that may potentiate huge value for the company.
4. Guilt-free Spending
Extra cash doesnât always translate to guiltless shopping. Although companies would expect employees to spend their cash rewards on what they need, they canât always guarantee that. They could tuck the money somewhere and not get the value the organization expected.Â
However, a gift card gives you the freedom to spend without remorse. The card is already funded by your company and you canât save or invest the money in it. You can only spend it. So employees can go out there and have all the fun they want or get the item they so dearly needed â without having to pay a dime. The best part of it is that they can do so without worrying about how much is leaving their pockets.Â
5. Gift Cards are Sharable
The good thing about gift cards is that they can be shared with the recipientâs family. When that is the case, and the employeesâ families are aware, you can expect everyone pushing them to do all they can to get it. The company, in turn, benefits from the shared participation.Â
Because gift cards are seen as real awards, compared to cash, employees are better motivated to go for it. Everyone wants to win something for their loved ones.
6. More Discrete
Gift cards are more discrete award options than cash. For most people, a cash award in the work environment is unacceptable, even though many organizations still practice it. A more socially acceptable option is to present gift cards, which are not perceived as a compensation method.
From several studies, we learn that cash rewards often get into a hole of need and thatâs all. Their likelihood of improving employee performance is closer to zero than one. On the other hand, gift cards have been proven to improve the work performance of the recipient.Â
Also, individuals who receive gift cards tend to develop long-term positive feelings towards the company. Any employer would want a staff that is completely dedicated and motivated towards giving their best for the organization.
When you put all of these together, giving gift cards is a more reasonable way to reward excellent performance in an organization.Â
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