Be wary of gift cards

Just another sign of the times:

Experts are issuing buyer beware warnings advising consumers to avoid buying gift cards this year.

With a growing number of retailers going under from the strain of the recession, holiday gift cards run the risk of not being honoured with companies in the midst of “restructuring.”

“We’re not crazy about them in general, but, particularly this year, until merchants become serious about protecting their funds, buy a real gift,” said Anthony Giorgianni, money advisor for Consumer Reports.

It’s a warning that also stems from an e-mail that’s gone viral in cyberspace. The e-mail, of unknown origin, advises consumers to avoid buying gift certificates at several major retailers because they’ve either filed for bankruptcy or are on the brink of going under.

From the Portage Daily Graphic. Makes a certain amount of sense, for sure. The stores singled out in the email will no doubt be desperate to suppress this story, because it will further cut into their revenue stream, but likely to no avail. I say it serves them right for introducing expiry dates.

Regarding the economic crisis in general, I don't know enough to say whether this will be the next Great Depression or just a nasty recession like we've had a number of times in the postwar era. I also don't know if anything good will come from this, but it's possible; the public works programs that have been announced in the US were overdue already, for instance, and if they spend a lot on developing clean energy sources, the world could come out ahead on the deal. George Monbiot thinks that the environment might also benefit simply from the decline in industrial activity, though others think that the lack of availability of credit might hamper the development of green energy by the private sector. But this is a perfect example of why we need a public sector. Thank goodness that Manitoba Hydro, for instance, is around to do stuff like this.

And then there are the more unpredictable benefits. Consider what happened in the last Great Depression:

On Dec. 5, 1933 — nearly 75 years ago to the day — America was buried in the Great Depression. A quarter of the workforce was unemployed, industrial production had halved, and the Dow was more than two thirds below its 1929 peak. There was, however, something to celebrate.

At 7 p.m. that evening president Franklin D. Roosevelt declared the ratification the 21st Amendment to the Constitution, which nullified the Eighteenth, making drinking alcohol legal once again. The event was celebrated in New Orleans with a 20-minute cannonade, and in New York cargoes of premium spirits owned by Joseph Kennedy, Sr., were unloaded from ships that had been waiting for the announcement just offshore. Prohibition — what Herbert Hoover in 1928 had called a “great social and economic experiment, noble in motive and far reaching in purpose” — was over. The writer and social commentator H.L Mencken compared its effects, in terms of the suffering it had caused, to the Black Death in Medieval Europe and marked its passing with a glass of water — “my first in 13 years.”

From the New York Times. Curiously, the story doesn't discuss the new prohibition that the US introduced a few years after and then forced the rest of the world to agree to (though several of the posted comments bring this up), but one has to wonder if the legalization of some prohibited drugs (at least marijuana) might finally be possible. Massachusetts just decriminalized it, after all, and some jurisdictions are likely to recognize that they could collect an awful lot of badly needed tax revenue if they went a step beyond and actually legalized it. Are you reading this, Barack?