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Less bang for your buck: Use up those gift cards

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As inflation continues to rise, financial expert Robyn Thompson is urging Canadians to use their old gift cards sooner than later.

Not because they will expire, but because inflation means those unused gift cards will ultimately give Canadians less than before.

"What you're going to be able to purchase with their gift card is a lot less," Thompson said on CTV's Your Morning Thursday. "So if you take it to the store, and you're trying to buy some coffee and doughnuts, you're going to get a lot less in coffee and doughnuts."

Statistics Canada said in September the annual inflation rate had dropped slightly to 6.9 per cent, from 7.0 per cent in August. This can be attributed to the slow pace of gas prices which fell 7.4 per cent in September from August. Grocery prices rose 11.4 per cent compared with a year ago.

Thompson says any trove of gift cards should be used before inflation increases further.

And that’s not the only reason to move fast, she says, noting that some gift cards have fees attached, which can decrease the value even further.

"Those ones that are the gift cards that are (like a) credit card, they can have activation fees, maintenance fees, sometimes even have dormancy fees if you don't use them," Thompson said.

Going into the holiday season, Canadians are expected to spend, Thompson predicts, but less than in previous years.

"Canadians are expected to spend 17 per cent less on Christmas gifts this year," Thompson said. "When you think about that, it's a lot of money for a lot of people."

She says to help alleviate a tight budget people should look for unused gift cards around the house to give to people. Making the present more meaningful can be simple: wrapping a gift card in a card or with a small object.

"As an example, if you know a family that's a little hard on cash… maybe give them a movie gift card but instead of just giving them a card, go buy a box of popcorn, wrap it up in a package, put a nice gift card on it and make it something memorable," Thompson said.

 

Watch the full interview with Robyn Thompson at the top of the article for all her tips.

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