Gift Card Etiquette: How Much Should You Give? - Save.ca (2024)

FAQs

Gift Card Etiquette: How Much Should You Give? - Save.ca? ›

There are no rules when it comes to how much you should be spending. It's a very personal decision based on your financial situation and what you've spent previously. Here are some guidelines to give you an idea of what to spend. For co-workers, casual friends and your children's teachers, stay in the $10 to $20 range.

You want to give an amount in the gift card that seems appropriate. General etiquette is usually under $20 for casual acquaintances, like co-workers, $30-$75 for close friends and family members and more for someone like your spouse or for a big occasion, like a wedding.

Specifically, California law, Civil Code section 1749.5(b)(2), provides that any gift card with a cash value of less than $10 is redeemable in cash for its value.

Fifty dollars goes a long way, and you can use it for the kinds of stores suitable for multiple purchases, like some of the other options on this list. If, for instance, your friend loves to go to Starbucks, spending $50 on a gift card provides them with a lot of value. That's enough about Starbucks.

You can include it in the message on the card if you need to, but try to make the focus of the gift the occasion and not the money amount.

Money etiquette experts suggest spending $10 to $20 for classmates while expanding the budget to $25 for close friends, $50 for relatives and upwards of $100 for your own children.

But if it's a birthday gift for a close friend or family member—or for a milestone birthday, like turning 18 or 75—it's not uncommon to spend in the $50 to $100 range.

An Overview of Gift Tax in California

You can give $15,000 to as many people as you want without having to file a gift tax return or pay any tax, according to current tax regulations. Gifts are not deductible on your income tax returns. If gifts exceed $15,000, a gift tax return should be filed.

“Gift” means a payment to the extent that consideration of equal or greater value is not received and includes a rebate or discount in the price of anything of value unless the rebate or discount is made in the regular course of business to members of the public without regard to official status.

Federal Law Offers Protections

Bank gift cards, which carry the logo of a payment card network (e.g., Visa, MasterCard), are also subject to Credit CARD Act protections and can be used wherever the brand is accepted. Under the law, a gift card cannot expire until at least five years from the date it was activated.

Is a $25 gift card too cheap? ›

For co-workers, casual friends and your children's teachers, stay in the $10 to $20 range. Gift cards for close friends and family members can range from $25 to $100. When you're selecting a gift card for a spouse, parent or someone else who's very special, choose a card worth $75 or more.

Justin Lavelle, chief communicators officer at People Looker, said, “Aim to spend about $10-$20 on a co-worker's gift. It's almost impossible to find a thoughtful gift for $5, but a $10 Starbucks or iTunes gift card is always appreciated and doesn't look cheap.”

While gift cards may have expiration dates or require the recipient to spend a certain amount at once, cash can be used whenever and however the recipient sees fit. Whether they choose to save it for a rainy day or splurge on something special, cash allows for flexibility and spontaneity.

Save your gift card receipt. “There are any number of reasons why the card may not have been properly activated,” LaRocca said. Give the gift-card recipient the receipt (you may want to make a copy of it for your records). Having the sales receipt will help to verify the card was purchased in case it's lost or stolen.

Experts say that spending $50-$75 is a good starting point for kids under 18. If there are more than a couple of kids in your family, then you might want to consider sticking close to $50 for each child.

Question of the Day: What is the average value of unused gift cards per person in America? Gift cards are one of the most requested gifts, but how much of the value is never used? Answer: The average unused amount is $187 per person, for a total of $23 billion.

In my family, for example, we set a budget and go from there—and many families do the same. According to a November 2022 study, most parents are budgeting $220 for each child—with the highest budgets for 7 to 12-year-olds, though 28% of those surveyed are trying to keep it below $100.

The rule is to spend no more than 1.5% of your gross annual income on presents, but only if you will not incur debt doing so. A smart way to avoid debt is to automatically sweep a certain amount of dollars from your bank account to a "holiday account” every month.