海角大神

Recently, I was using TurboTax to do my taxes for the year. For the last several years, I鈥檝e been paying in a bit each year rather than receiving a return because I鈥檓 self-employed, which means I have to handle my own personal taxes and I usually make my quarterly tax payments on the lower end of what鈥檚 reasonable.

Anyway, one of the things I usually do with TurboTax is that once my taxes are actually finished, I鈥檒l play around with scenarios a bit. What would things look like if I made $10,000 less this year? Would I get a refund? What if we gave more to charity? How would that have affected things? It鈥檚 essentially a big personal finance calculator that鈥檚 already set up with all of our data, so it鈥檚 really useful for looking at things like that.

As I was doing this, I discovered something interesting. TurboTax has an offer embedded in it that will give you an Amazon.com gift card in lieu of your tax return. If you accept that, they鈥檒l add an additional 5% to the balance of that card.

This isn鈥檛 the first time I鈥檝e seen this type of 鈥済ift card as payment鈥� offer. Coinstar kiosks usually offer this type of arrangement, where you鈥檒l get more 鈥渧alue鈥� in the form of a gift card than if you simply receive cash. A few banks, such as SmartyPig, also have options where you can receive the balance of your account in the form of a gift card with an additional 鈥渂onus鈥� added to the value of that card.

It鈥檚 an interesting offer, both for the institution making the offer and for the customer.

For the institution, they鈥檙e able to acquire gift cards from Amazon at a slight discount of their face value. Then, they pass along some of that value to the customer (keeping some of that difference

For the customer, it offers an additional option when receiving your payment, and choice is usually a good thing. The question really boils down to whether or not receiving a gift card as payment is really worth it for the customer.

The only time that you should consider a gift card as payment is if there鈥檚 significant additional value placed on the gift card and you鈥檙e actually going to use the card in the near future and you鈥檙e using the card for something reasonable.

Let鈥檚 break down these three elements.

First, is the gift card giving you additional value? If your choice is between cash and a gift card with the same face value, take the cash every single time. That鈥檚 obvious. The only time a gift card should be under consideration is if the face value of the gift card is higher than the cash option.

Most of the time, your gift card option will have a higher face value than the cash option. Most companies realize that most customers won鈥檛 go for the gift card without some incentive, so this aspect is almost a given.

Second, are you actually going to use the gift card in the near future? It鈥檚 very easy to put a gift card aside and forget about using it until you find it two years later (at which point, it might be expired). A forgotten gift card can easily be lost or thrown away on accident.

The best gift card is one you鈥檙e going to use quite quickly while it鈥檚 still fresh in your mind. Will you actually use that card in the near future? Or are you at risk of misplacing that card?

Finally, are you going to use the card for something reasonable? An Amazon gift card isn鈥檛 just an excuse to go buy random things. If you鈥檙e going to just blow the money on trivial things, it really doesn鈥檛 matter whether you choose the gift card or not.

If the presence of the gift card is tempting you to spend it on something purely useless, while the cash might be put to better use in your life, get the cash. If you can actually use the gift card for something worthwhile, such as buying household supplies or picking up a gift for someone, the card is probably a good choice.

If you鈥檙e not saying 鈥測es鈥� to all three of these criteria, you should be getting your payment in the form of cash, not in the form of a gift card.