When gift cards first appeared on the market in the mid 90’s, consumers instantly flocked to them. Businesses loved the idea because it attracted new customers who often spent more than the value of the card. Gift cards have grown into a multi-million dollar industry and are a great alternative to cash gifts. Most people love getting gift cards for stores they already shop at, but what about those cards you have sitting in the bottom of a drawer somewhere. What should you do with the PetSmart and Boston Market gift cards you were given for Christmas?
Spend them baby
The easiest option would be to just go out and spend them. But does this make financial sense. How often are you able to find something for the exact value of the card? Most of the time, you’ll end up spending extra on your purchase. Now this gift card is actually costing you money! Similarly, do you ever tell yourself “This jacket is so expensive, but I have a gift card that will cover half”? I know I’m guilty of this once in a while, but as studies have shown, people who pay with plastic are likely to spend more than those who pay with cash(another great tip if you are working on spending less).
Sell them through a 3rd party site
In the last couple years, a large third party selling/buying market has emerged to help solve this problem. There are several reputable sites you can use to sell your gift cards and still get up to 90% cash back.
Ebay is a great option because they usually have the best cash out ratio. A lot of buyers on Ebay have 10% coupons and use cashback sites so they are willing to pay up to, and sometimes exceed, the face value of the gift card. I recently sold a $10 gift card for $10.11! However, the Ebay route adds a little hassle and the possibility of fraud. I like to use Ebay when the card value is $25 or less. What if the buyer claims they never received the card or there is no value on it when it arrives? Ebay will usually side with the buyer leaving you financially responsible.
The other option is to use a site like Plastic Jungle or Card Pool to sell the gift cards. Their cash out ratios aren’t as high as Ebay but they remove a lot of the risk and hassle. You can even do an egift code exchange and receive Paypal payment instantly(within 24 hours). With their mail in option, postage is free, and you are paid as soon as they receive the cards.
California Cash Out
If the value of the card is $10 or less, you can request the cash value of the card. There is actually a law in California that states you are able to receive cash back when the value of the card is $10 or less. This applies to all gift cards, although many businesses may be unaware, or unwilling to follow this law. I’ve done it successfully at many large franchises like Starbucks, Target and Walmart but your results may vary.
Have you tried any of these tactics or do you like to spend the gift cards you get? What about re-gifting them?
-Harry @ PF Pro
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Personal Capital lets you see all of your accounts in one convenient place. Sign up now for free.Editor’s Note(5/23/13): Plastic Jungle no longer sells/buys gift cards. According to their website, they are focusing more on working directly with their business partners.
Great advice! I didn’t know about the California cash out law. Very interesting.
You might have trouble at some smaller businesses, and it might not be worth the hassle. But a lot of larger companies like Starbucks have policies that allow for it.