Airlines Embracing Gift Cards

[jeffrey]

Last week Southwest Airlines launched a new gift card program and this week American Airlines has responded with its own gift cards. Both are hoping to tap into the increasing popularity of gift cards as a present for the holiday season.

The Southwest Airlines gift card will be available beginning November 1, 2005 and can only be purchased on the airline's web site. It can be redeemed at any Southwest Airlines location, however, including southwest.com, Southwest airport ticket counters, or by calling its toll-free Reservations line. The Southwest gift card never expires and doesn't lose value over time.




The American gift card will be available beginning Nov. 1, 2005 in $50 and $100 denominations at thousands of participating grocery stores. Up to eight gift cards may be applied to the purchase of a single ticket. If the ticket price exceeds the value of the gift card(s), a credit card can be used to pay the remaining balance. American Airlines gift cards do not expire and have no fees to keep the card active.

While gift cards are gaining in popularity, you need to look at them carefully since many have fees. Even those that don't, you end up giving a free loan to the company until the gift card is redeemed.

[sweeps]

I hope no one seriously considers giving these airline gift cards to people. It's one thing getting a gift card for some place with a wide selection of low-priced items (Target or Kohl's, for example). With a $50 gift card at these places, pretty much everyone can find good use for the funds.

But airlines obviously offer one thing: flights. And the flights are usually going to be a lot more than $50 or even $100. So not only are you locking in the recipient to a particular airline but you're also forcing them to fork over additional money for the privilege to fly somewhere.

No thanks.