Why the Best Intentions Often Fall Off Track

Jan. 18, 2007 — -- It's a question that puzzles countless Americans, especially during January when New Year's resolutions are on the brink of being broken: Why do the best intentions often go awry?

The holidays have come and gone, and millions of Americans are toting around gift cards. "Freakonomics" co-author Stephen Dubner recently visited "Good Morning America" to shed some light on why people sometimes waste gift cards, shun the gym, and don't take prescriptions.

"Researchers have found that only one in three people who get them [gift cards] use them in the first month," Dubner said. "And what about the rest of the cards? A lot of them never get redeemed. One in five people who receive a card never use them. That adds up to big money."

A financial research group found that in 2006, Americans gave each other $80 billion in gift cards. Of that, $8 billion will never be redeemed -- that's more money than credit- and debit-card fraud combined.

Regardless of whether they're spent or not, gift cards are a boon for companies.

"If you don't use the gift card, the company has already been paid, so they keep the money," Dubner said. "If you do use the gift card, research has found that most people spend more than is on the card."

Dubner believes that for some people, cash may be a better gift; it's something no one will put to waste.

"Gift cards are great, convenient and simple. However, if the person getting the gift is a hard-core rationalist, just give them cash," he said.

January's the time when many people join a gym to get rid of pounds put on during the holidays. Splurging on a membership doesn't mean it'll be put to use. Two research studies examined gym memberships and found that people seriously overestimated the amount of time they actually went.

"Research shows most people actually go once a week. If your monthly fee is $100, a once-a-week visit costs $25 per visit. That could be more than a day pass!" Dubner said.

"So before you make a commitment for a month or a year, figure out how much it costs to go for a day. Then multiply that times the number of weeks you are signing up for. It may be cheaper just to get day passes," Dubner said.