Holiday Gift Card-Giving Expands With Stocks and Smashing Concrete

How does a gift card stand out? Add a hammer and the financial market.

— -- Holiday shoppers were estimated to spend more than $31 billion on gift cards in 2014, according to the National Retail Federation, and this year the options are expanding beyond money in a plastic card.

In October, gift cards that buy fractional shares of publicly traded companies became available at U.S. retailers like Kmart and grocers Safeway and Wegmans Food Markets. "Gift Cards for Stock" were introduced by prepaid and payments network Blackhawk Network and Stockpile, which previously created "eGift Cards" for stock.

The stock gift cards come in fixed denominations of $25, $50 and $100, which may be redeemed for fractional shares of real stock that you choose. Here's how it works: You buy a prepaid card at a retailer, then the recipient enters the claim code at stockpile.com. You then have to sign up for a brokerage account and redeem for stock you choose, an exchange traded fund such as the S&P 500 or NASDAQ, or a retailer gift card available at stockpile.com. The example that the companies provide is that if Google is trading at $500 per share, "you don’t need to come up with $500 to get started," and you can spend $50 on a gift card to redeem for 0.1 shares of that stock.

Adam Levin, founder of Credit.com and Identity Theft 911, warns that hackers and identity thieves use gift cards in various scams, and because these stock gift cards are linked to owning securities, they are even more tempting.

When asked about financial risks involved in giving a gift card for stock, the company notes that it's a gift card and not a stock or recommendation to buy a specific stock.

"The stock market inevitably will shift up and down, but over the long-term, a well-diversified portfolio helps reduce risk," Dan Schatt, chief commercial officer at Stockpile, said.

He adds that investors should stay informed about their portfolio, the financial markets and the general economy.

Another option that livens gift-card giving this season is a product by Man Crates. The Redwood City, California-based company that specializes in "awesome" gifts for men, introduced this year the "smash and grab" gift card.

The company sells a variety of gift cards, including from partners like Bass Pro Shops, Home Depot and Best Buy, encased in a concrete brick that the recipient has to smash with a hammer, included in the package. Safety goggles are also included.

"Smash and Grab is the gift of socially appropriate destruction: two inches of pure concrete that he gets to, nay, must completely obliterate," the product description on ManCrates.com states.