Wednesday, December 29, 2004

Cash IS a gift certificate

With Christmas behind us, many of us are eager to use our Christmas spending money. For a lot of people, that spending money comes in the form of a gift card. I heard on the news that something like 25% of all gifts were gift cards.

Call me old fashioned, but I don't get it. Why the need to purchase a gift card? What is a gift card? It's a worthless little piece of paper or plastic that has no intrinsic value. Its latent value lies in what it can be traded for: goods or services.

Isn't that what our cash federal reserve notes are? Worthless pieces of fiat currency that hold no intrinsic value but can be traded for goods or services. Course, cash used to be based on silver or gold (remember the silver certificates?), but the government stopped long ago in trying to even pretend they were doing us a service by printing lots of worthless pieces of paper. Now they print print print, and the value goes down down down. But I digress.

So what is the difference between cash and gift cards? Gift cards are redeamable only at the store they were purchased at. Cash is redeamable anywhere (this note is good for all debts, public and private). And with gift cards, you often have to pay a surcharge for using the card. It could be $2/month after 6 months, or $1.50 up-front cost per card (the latter is the charge for the Simon Mall Visa gift cards--what an aweful deal).

Why would anyone want to pay more than the dollar amount of services/goods they could get in return? Why would anyone want to limit the options for the number of stores you could take a gift card to? Am I the only one that sees that cash, for all its government-induced problems, is vastly superior to gift cards?

Some people say cash is impersonal. To those people I ask: have you ever gotten cash as a gift and said to yourself "boy, Uncle Rico sure is insensitive and impersonal by getting me this crappy cash gift. I would have much preferred something thoughtful like a Chia Pet".

Cash is the ultimate gift certificate, its redeamable anywhere, and everyone always wants it. Please give cash for Christmas next year, not gift certificates. Thank you.

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