Gifts to reconsider

A few popular holiday presents can cost the recipient as much as, if not more than, the upfront cost of the gift. Therefore, you should consider the hidden costs of gifts you plan to give this year. Kelli Grant, Senior Consumer Reporter for SmartMoney.com, tells what to watch out for.

Consider your responsibility in the gifting. Etiquette experts say the onus is on the gift giver to consider what costs, big or small, someone might incur as a result of the gift. On a smaller level, that might mean including batteries for a child's toy or adding extra funds to cover the tax and tip for a massage gift certificate. Bigger purchases require up-front approval from the recipient. It's better to have an IOU under the tree than an unexpected financial burden.

Reconsider tablet computers. It's safe for givers to assume that the recipient of a 3G- or 4G-capable tablet will run up bills for apps, but it's the cost for data via associated wireless services that givers often overlook. Some tablets require a two-year contract with purchase. Even on a device that doesn't, like the iPad 2, the giver must decide at time of purchase to get an AT&T version of the tablet, or a Verizon one. Each carrier has a different pricing scheme, which could cost the recipient extra.

A car sounds like a spectacular gift, but not if the recipient can't afford the extras. It's out of reach for most of us, but wealthy folks often do buy cars as presents. Fuel, insurance, maintenance and other costs can run into the tens of thousands. Over five years, the cost to own say, a BMW can run $40,401. There's no room for buyer's (or recipient's) remorse either. Cars typically can't be returned or exchanged once they leave the lot.

Giving pets should be done with caution. Because many pets can live 15 years or more, givers are signing up the recipients for a long financial commitment. By the ASPCA's estimates, even caring for a small animal like a guinea pig can cost upwards of $600 annually. Bigger animals like a cat or dog can cost nearly $1,000 a year. But surprise animals aren't often kept - many end up in shelters because the recipient didn't think they were a good fit.

Gift cards are easy, but they can cause the recipient to lose money. Research indicates that shoppers spend 140% of the face value of their gift card, which means someone with $50 to burn is typically spending an extra $20 of his or her own cash. Fees can also eat away at the balance, giving the recipient less to spend in the first place. Some deduct as much as $5 per month from the balance after 12 months of inactivity. Others charge a $10 fee to replace a lost or stolen card.

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