By Lars Peterson
Americans like giving gift cards. The average person planned to give $174 worth of the plastic and cyber gifts last year, up from $163 in 2013, according to the National Retail Federation. Unfortunately, we are not as good at spending what we get. In fact, Americans left millions of dollars worth of gift card value unspent last year. If you're holding onto a few hundred dollars spread across a handful of shiny plastic presents, here's how to liberate your locked up lucre.
Seven Ways to Get Some Value
- Use them to pay bills. No, don't stuff your cards back in the odds-and-ends drawer and wait for a better time to spend it. Depending on the card and the retailer, you can use your balance to pay for stuff you'd normally pay for -- even your bills, if your gift is a debit card from a bank. Take the money you would have spent on groceries or gas and put it in the bank instead. You may even be able to convert your card to cash and save a step. Check the terms and conditions.
- Sell them. In recent years, a bunch of websites have sprung up that buy and sell gift cards at a discount. Buyers can save a little money on gift cards for gifts or purchase goods and services. Sellers can convert their cards to cash to use however they'd like. Prices on these exchanges fluctuate with demand, and some cards are more desirable than others. But if you don't mind taking a little cut on the value of your card, they're a decent option. Be sure to shop around before buying or selling - prices vary across exchanges. Here are a few options: GiftCards.com, Cardpool and GiftCardRescue.com.
- Trade them with your friends and colleagues. If you trust your friends and co-workers to tell the truth about the balances on their cards, set up a trading circle to match cards with recipients. Will you take two of my Applebee's (DIN) for one of your AMC Theatres (AMC)?
- Track the balance. After a couple of lattes and a scone, just how much is left on that Starbucks' gift card? You can usually discover the balance by visiting the issuer's website, or you can use an app like GoWallet to scan your card (or cards) and let it track the balance for you. GoWallet also offers a gift card exchange.
- Carry them in your smartphone. You can spend your gift cards using GoWallet, too, which is a lot more convenient than carrying them around. Apple Passbook and Google Wallet can do this for you as well.
- Donate them. Even if your card has a partial balance, most charities will happily accept it. If your preferred charity does not, check out CharityGiftCertificates.org where you can choose a charity to donate the card to. Gift Card Giver also distributes cards to nonprofits and those in need.
- Regift them. If your card is in good condition inside and out (no partial balances!), you can thoughtfully re-gift it to someone else. You may not like to shop at Macy's, but for someone who does, that unused gift card cluttering your desk drawer will soon be happily spent.
The next time you're stumped for a gift to give, resist the temptation to grab a gift card off the rack. Gift cards come with several significant drawbacks:
- Most lock recipients into buying from a specific retailer (or group of related retailers such as Gap (GPS) and Banana Republic), which limits their utility.
- Most bank gift cards charge buyers a purchase fee on top of the card balance.
- Some bank gift cards also charge a monthly "dormancy fee" if the card is inactive for at least 12 months.
- If the issuer goes bankrupt, the value on the gift card may be lost.
- Replacing lost or stolen cards may be costly - or impossible.
- Unlike with credit cards, gift card holders do not have the right to dispute erroneous or inaccurate charges.
Finally, before giving a gift card, be sure to understand the terms and conditions so the recipient isn't burdened with surprises later. After all, the fine print is as much a part of the gift as the balance coded onto the magnetic strip.