Gift Cards Or Cash? Expert, Shoppers Weigh In

FARMINGDALE, N.Y. (CBSNewYork) -- Each year, Americans spend well over $100 billion on gift cards – with most being purchased during the holidays.

But is it better giving a check or cash? TV 10/55 Long Island Bureau Chief Richard Rose had some answers Monday from a financial expert, as well as shoppers.

With just one week to go until Christmas, stores were packed Monday with last-minute shoppers. Many were set to choose the convenience of quickly grabbing a gift card.

"I'm big on gift cards because people like to receive it, and then they can pick out whatever they want," said shopper Patti Riordan.

"Just because they can get what they want, and you don't feel as much pressure that they're not going to like something if you actually get them something," said shopper Courtney Ebert.

If you are choosing gift cards, economics professors say a little research goes a long way.

"From a buyer's perspective, you're paying say, $5 to purchase this gift card," said Dr. Meeghan Rogers, a finance professor at Farmingdale State College.

Rogers said giving someone a gift card can often lead them to overspend when they are cashed in.

"Most of the time that you receive a gift card, you actually go above the limit of the person who purchased it for you, so you can actually wind up spending more," she said.

Rogers said while federal law prevents gift cards from expiring in less than five years, providers can charge you inactivity fees after just a year.

Every year, more than $1 billion in gift cards go unused.

"I forget about them," said shopper Corrine Kelly. "I put them away, then I don't use them. I still have gift cards in my drawer somewhere."

Rogers said you should not give up on the unused gift cards, though.

"There's actually a few websites where you can sell your gift cards to other people, but it won't be for full value," Rogers said.

It is why some shoppers say they prefer cash.

'With a gift card you have to call and activate it," said shopper Katrina Fleurinay. "When you have cash, you can use it anywhere, right there and now."

And cash can be saved or invested – but whatever you choose, everyone agrees that when it comes to gift giving, it is truly the thought that counts.

Some shopper said they think giving cash is impersonal, while a gift card seems more thoughtful.