Alongside the traditional gift cards for stores such as Best Buy, iTunes and Starbucks, shoppers have a new option this holiday season—gift cards for shares of popular stocks. The stocks include Apple, Coca-Cola, eBay, Facebook, Warren Buffett’s Berkshire Hathaway and others. There also are gift cards for funds that track gold and silver prices or stock indexes such as the Standard & Poor’s 500.

The cards, in denominations of $25, $50 and $100, are being offered at stores including Kmart, Lowe’s, Safeway and Toys “R” Us. They are issued by a brokerage called, which charges a fee ranging from $4.95 to $7.95. Gift recipients set up an account at the brokerage’s website, where they enter a code from the card. They can switch to a different stock or fund among hundreds available at the website, or they can trade for a traditional retail gift card. There is no activation fee, but to sell shares, the fee is 99 cents per transaction. The card might buy just a fraction of a share. For instance, Apple was recently trading at $119.50 per share, so a $50 gift card buys less than half a share.

In comparison, to give stock by traditional means, you might have to buy stock and/or transfer shares from your own account. The fee to buy stocks is $7.95, for example, at Fidelity and $8.95 at Schwab, no matter how many shares, and there might be a fee to transfer shares to another person’s account at a different brokerage—for instance, $50 from Schwab.

My take: Gift cards are a convenient way to give a small amount of stock as a gift and educate the recipient about ­investing. But the purchase fees make it an unattractive way to give large amounts of stock.

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