What’s Wrong with Cash Gifts?

credit: freedigitalphotos.net by Master Isolated Images

credit: freedigitalphotos.net by Master Isolated Images

My friend asked me for advice when his daughter’s first birthday was coming up. He said that he wanted to tell people that he’d rather have cash rather than gifts since his daughter already had a ton of toys. He has a big family and they have showered her with enough toys. Plus, he lives in a small apartment and really doesn’t have space for it. He asked me whether it would be tacky or bad etiquette to ask for money instead. I told him that I wouldn’t have a problem giving a cash gift. However, I think there may be people who don’t feel the same way. In the end, he sent out an invitation saying that his daughter has been blessed with a lot of gifts and asked that guests just make a contribution to his daughter’s college fund.

I think my friend did a good job of avoiding the social faux pas of asking for cash, but I started wondering about it…why do cash gifts cause such awkwardness? One reason some may not like the idea of giving a cash gift is because it shows a lack of thought. I can understand that line of reasoning if you’re buying something for a close loved one. Although I do know a couple where the wife prefers a cash gift or gift card because her husband apparently always buys the “wrong” gift. A loved one may appreciate the thought you put into finding a gift and it also shows that you’re paying attention to his/her needs and desires. And yes, I do feel kind of special when someone gives a thoughtful gift. However, when it is not the case of showing that you’re “thoughtful,” wouldn’t it just be easier for both sides if you gave/received a cash gift.

Instead of giving cash, some people have resorted to cash equivalents like gift cards and prepaid credit cards. I’m not sure how “thoughtful” a gift card can be. I guess you thought of which store they shop at? But, how about prepaid credit cards, what thought does anyone put into that? According to a social etiquette expert online, “money is very personal and is not as easy to accept as say if he had given you gas cards or merely paying for meals,tickets,etc. when you are his guests.” The person writing to the etiquette expert said that a friend she was going on a trip to visit sent her a cash gift which made her feel awkward and thought that accepting the cash made her seem “desperate, greedy or ungrateful.”

On its face, it seems a bit illogical. What is the difference between giving someone a $50 Exxon Mobil gift card versus giving $50 in cash? The gift card is somehow less personal, but it restricts what the person can buy and where they can buy it. What if there’s no Exxon Mobil nearby? What if you prefer to go to a different gas station because it’s cheaper.

Some people decide to give a prepaid credit card instead so there is no restriction as to where it can be used. However, I really can’t stand most prepaid credit cards. There is often a fee, around $5, to use the card! Basically, you’re paying $55 to give someone $50! That’s ridiculous! Right? I also ran into a different issue once when I received a prepaid credit card for Secret Santa once. Of course, it was a gift and I was very grateful…but I used the gift card and threw it away because there was no balance left. However, when I returned the item I purchased with the card, I forgot to tell the cashier to give me store credit and she put it back on the card. The card that I had already thrown away! So basically, that money was lost. I feel bad for the person who gets to be my Secret Santa! What do you get someone who doesn’t want anything? I think as I get older, my Christmas list gets smaller and the things I really want for the holidays can’t be bought.

I definitely understanding getting a special gift for that special someone. I get it. Although there are times that I think cash gifts just makes more sense even though social etiquette tells us otherwise.

Sheldon from Big Bang had a hilarious take on gift giving in an episode where he was asked why he didn’t purchase a gift for his roommate and best friend:

“The entire institution of gift giving makes no sense. Let’s say that I go out and I spend fifty dollars on you, it’s a laborious activity, because I have to imagine what you need, whereas you know what you need. Now I can simplify things, just give you the fifty dollars directly and, you could give me fifty dollars on my birthday, and so on until one of us dies leaving the other one old and fifty dollars richer. And I ask you, is it worth it?”

What do you think about cash gifts? How about gift cards or prepaid cards?

27 thoughts on “What’s Wrong with Cash Gifts?

  1. Jaime

    I’m one of those people that will give 99% of people in my life gift cards or cash because it’s easier than getting them a gift that they have to return/exchange or not liking the gift. I also appreciate it when people give me gift cards and cash as well. I will buy a specific gift only if the person has stated they want that like if they want a specific book or movie or other item then that way they won’t be disappointed.
    Jaime recently posted…Millennial Finance Expert David CarlsonMy Profile

    1. livingrichcheaply@gmail.com Post author

      Yea, I like being able to get a specific gift when that person has mentioned something they like. But often times, it is too hard to buy something and have them disappointed…and you probably wouldn’t know because most people try to act gracious. Cash and gift cards are just a lot easier!

  2. Abigail @ipickuppennies

    I don’t think there’s necessarily anything wrong with a cash gift. I think that it gives the person the impression that the person didn’t think too hard about what the recipient wanted, whereas a gift card (to a store) shows that you know what the recipient likes and are, therefore, putting thought into it. And/or are afraid of getting the wrong item from said store.

    My only problem with cash gifts is that they can get sucked into the general funds, and then you’re not spending the money on yourself. (Assuming you’re in a position where you don’t need the cash to make ends meet.)

    Your friend could also ask for savings bonds or cash. It reinforces that the gifts are going toward the kid’s future schooling.

    1. livingrichcheaply@gmail.com Post author

      I guess it’s true that cash gifts get sucked into the general funds, but I don’t have a problem with that. Money in my general funds are spend on me and my family anyway. But I guess the money that was gifted was intended to be used to treat yourself.

  3. John

    I’m OK with giving and/or receiving gift cards. Some people are simply hard to buy for, and I may be, too! The fact that you gave/received a gift is still true…..and you don’t have to take it back to the store for the right size!

    It is more gratifying to receive a really awesome, much desired gift, but honestly, it’s rare someone will know about it. Plus most of us are inclined to buy that coveted item ourselves anyway, so no one could give it to us anyway!

    John
    John recently posted…Three Ways to Use Your CashMy Profile

    1. livingrichcheaply@gmail.com Post author

      Exactly! It IS gratifying to give or receive a desired gift, but I think that is rare and often difficult. Plus, a lot of things that people really covet are probably outside the gift budget.

  4. Shannon @ Financially Blonde

    For the most part, I am a no gift-giving kind of gal at least for the adults in my life. As far as kids, I have no issues with cash gifts or gift cards, especially if they are for locations that they enjoy. I hate the “stuff” my son has gotten for his birthday over the years that is just wasted when he got Sports Authority gift cards this year and purchased clothes with them. So it was great for him to get something and great for me to save money on buying him clothes.
    Shannon @ Financially Blonde recently posted…Portfolio Risk – Do you know yours?My Profile

    1. livingrichcheaply@gmail.com Post author

      Same here…kids are different. And I’m sure there are a lot of gifts that end up not being used, thrown away or returned. I received a Dick’s Sporting Goods gift card as my Secret Santa gift this year…I’ll probably buy a pair of sneakers.

  5. DC @ Young Adult Money

    I actually don’t mind cash gifts or gift cards, but I prefer gift cards. Gift cards are great because you can treat yourself without having to spend anything. But yeah, it all zeros out in the end especially when you are getting each other gift cards. My sister hates them as gifts so she’s tough to shop for 😉

  6. Miranda

    My son is very hard to buy for and even I have a hard time figuring out what to get him. When we have his birthday party and people ask me what he wants I just tell them Gamestop gift cards because he loves videogames…that being said there are some people in my family that don’t like doing that saying that it isn’t as personal.. He’s 10, that stage where he doesn’t want toys anymore and he doesn’t give a hoot about what he wears. Gift giving really does get more difficult as they get older, and some people are just weird about their gift giving practices.

    I say it’s ok to ask for whatever you will actually use, and to give cash or cards if that’s what you want to do!

    1. livingrichcheaply@gmail.com Post author

      Fortunately for me, my son is still very young so he’s pretty easy to shop for. I’d be interested in hearing other peoples weird gift giving practices! =)

  7. Holly@ClubThrifty

    I give cash to my nieces and nephews on birthdays and Christmas. I have a lot of them and I can’t keep track of what they want. They are also old enough to have wants and needs of their own. I think they love getting cash! If not, they’re really good at pretending =)

    1. livingrichcheaply@gmail.com Post author

      I’m sure they love it! Who wouldn’t want cash? And I’m sure they would prefer an Aunt who gives them cash rather than a crazy aunt who buys them a sweater they may not like.

  8. Laurie @thefrugalfarmer

    We get – and give – lots of cash gifts. The family members like it because it’s easy – the kids like it because they can buy what they want or save up or whatever. We like it because it allows them to learn some money management skills and allows them to have cash for things we won’t buy them. To me, whatever the recipient would like most is what we should give. After all, isn’t a gift meant to please the recipient? Another great post, Andrew.

  9. Jenna L at Hello Suckers

    Haha, good old Sheldon!
    I sort of agree with what your friend did because people buy so much unnecessary crap for children and often those who splash out on lavish toys can make others (including the child’s own parents) feel embarrassed or upset that they cannot match the value.

    At least this way that kind of ‘wealth shaming’ is avoided and the children receive something that in the years to come will not lose significance unless the bounty of toys and clothing that they were bound to already get.

    Great post.

    1. livingrichcheaply@gmail.com Post author

      Sheldon is hilarious! Honestly most kids don’t need more toys and unnecessary crap. And it definitely helps avoid competition in who gives better gifts.

  10. Laura Beth @ How to Get Rich Slowly

    I don’t mind giving cash gifts at all. I really don’t see the difference, except that it does seem less personal. But let’s face it, there are times when you just don’t know what the person wants or their tastes are very particular. I’m not sure I like being told that a cash gift is preferable though. An interesting post Andrew.

    1. livingrichcheaply@gmail.com Post author

      Thanks! I know what you mean…it is less personal. And it would feel weird if I gave my wife a cash gift, but a friend’s child’s birthday party…yea, I’m sure the parents and the child (if they get to use it as he/she pleases) much prefers cash.

  11. Kyle

    I don’t watch the Big Bang, but that’s pretty funny.

    When you have plenty of cash and you’re not materialistic you don’t know what to ask for. My birthday is coming up and I haven’t asked for anything, I think people stopped asking me because they know I wont usually respond, I just tell them I’ll think about it. I just want some good company. I tell people they can always get me beer.
    Cash is weird, I like cash because I can bargain hunt for the few items I do want instead of asking someone to buy something that’s pretty expensive usually. Lately I just give gift cards or cash. Gift cards means, I really want you to go out and have a nice dinner or buy yourself something nice, you can’t just toss gift cards in your checking account. It meant more when people didn’t already tend to spoil themselves that regularly. Kids are the most difficult, if they’re small enough cash and gift cards is a no go, then I’m just flustered staring at plastic toys in cardboard boxes.

    1. livingrichcheaply@gmail.com Post author

      I’m with you on this..all I really want is good company. I really don’t need a gift as an adult and there really isn’t any gift that I want which is nicely wrapped in a box. Like you said, I prefer good company. Kids aren’t too difficult for me since I have a kid myself. I just get what my son seems to enjoy if they’re around the same age. I guess a contribution to their college fund would be cool too for the parents.

  12. MB @ Millennial Boss

    I try not to give gift cards unless I am in a super rush and picking something up at the supermarket on the way to a party. I read some study once that 95% of gift cards go unused. It’s just a way for companies to see revenue without losing product. I am making up the stats but I personally have a drawer of half-used or maybe used gift cards sitting unclaimed.
    I don’t like to give cash either though because I am so frugal and typically hunt for great gifts for less money. I wouldn’t want someone to know that the awesome scarf I gave them was on sale for $15 or the vera wang wedding frame I gave them was on sale for 40% off. I think when you start equating gifts to monetary value, you’re opening a can of worms.
    MB @ Millennial Boss recently posted…That Craigslist HighMy Profile

    1. livingrichcheaply@gmail.com Post author

      Yea that happens to me. I have a few unused gift cards. I think it is great to buy awesome gifts for less. I’ve done that as well but shopping and buying gifts can be stressful especially when it’s not for someone close and you don’t know what they want.

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