If the popularity of retail gift cards are any indication (a potential $35 billion to $40 billion sold this year, according to Purdue Retail Institute — and those are just holiday sales), they may be a valuable way to show your employees how much you appreciate them in a tough economic climate.
The most popular gift cards are for department stores. About 40 percent of cards purchased are for such stores, and 30 percent of cards are for restaurants.
One concern associated with gift cards is fraud. Richard Feinberg, a researcher with the Purdue Retail Institute, recommends buying cards directly from a retailer's Web site and beware of third-party vendors selling cards online. He also recommends using your credit card to make a purchase.
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"Buying gift cards on credit cards has additional protection since most credit card companies include 'chargeback' rights if the retailer does not honor the gift card," he says.
Another caveat that's painfully obvious in this economy is not to purchase a gift card from a company at risk of bankruptcy. Feinberg says companies in bankruptcy are not obligated to honor any cards, unless those companies are overcome with the spirit of the season.
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