Gift cards help kids learn valuable lessons.

Ally and I braved the mall this morning. In addition to the covetous Target gift card, still safely tucked in her pink wallet, she received a Macy’s gift card in exchange for a pile of clothes that didn’t fit. I know you can do an even exchange at the store and only stand in the checkout line once, but I prefer my kids to turn in items first and get a gift card in return so they have a clear idea of how much they can spend. It takes a little more time to shop this way, but ultimately creates a better experience for us all. Shopping with gift cards also provides the opportunity to learn these important lessons:

1. There is a limit. Though it may seem like the debit and credit cards in mom’s wallet are an endless source of funds, kids need to learn that an account balance or credit limit actually dictates how much money can be spent. Gift cards also have a limit. I strictly enforce the limit when redeeming gift cards because I want my kids to learn to shop within their means. If one of my kids wants to buy something for $20 but only has a $15 card, I tell him to make another choice or be prepared to use his own money to make up the difference. I won’t subsidize the purchase because doing so would send the message that it’s okay to overspend.
2. Want vs. Need. On a routine shopping trip, nearly everything the kids see in the store is something they really, really need. With their own money (gift cards), however, my kids become more shrewd in their definition of “need.” At the start of each gift card shopping trip, I remind the children of things they asked me for recently. This helps direct their shopping. The kids aren’t forced to shop for the things I suggest, but when they have a mental shopping list of needs, they become less overwhelmed by the store and make better purchasing decisions.
3. Quality vs. Quantity. Matthew once blew through a gift card buying an armful of junk toys that I warned him wouldn’t last. A couple days later, when the toys broke, stopped working, and otherwise proved to be poor choices, he cried and begged me to take him back to the store to buy something else. Of course, I wouldn’t take him. But the next time he received a gift card, he picked out one durable toy instead of several cheap thrills. I don’t place too many restrictions on what the kids buy. If they waste their gift card money, I know the poor decision will have a lasting impact.  
4. Save it. If the kids cannot find something they really want, I encourage them to save the card for later instead of wastefully buying something simply because they can. Responsible spenders know when to refrain from hasty purchases in order to save their money for a future, more beneficial purchase. (Walking away is sometimes hard for us big kids to do as well!)
5. Do the Math. Obviously, kids learn practical applications of math by calculating the cost of desired items—is the item more or less than the amount on the card, how much will two things cost, and how much money will be left on the card after this purchase? My fourth grader is old enough to do most of the calculations and even knows to include a little extra for sales tax. My kindergartener, on the other hand, simply asks, “If I buy this, do I have money left over for something else?”

As my kids become increasingly savvy shoppers, they have also made some surprisingly mature gift card purchases—new church pants, school shoes, and a toy the entire family shared. I’m proud of them for this. I’m proud of myself for being tough at times when it would have been easier to just give them the extra cash or allow them to take back silly purchases. While redeeming gift cards with kids in this way may require a longer shopping trip and an extra measure of patience, the lessons learned are worth the effort.