Holiday tip: How to save money on gift cards this season

Gift cards are the most-wanted holiday gift again this year – ahead of jewelry, clothing and even electronic gadgets. According to the National Retail Federation’s 2011 holiday survey, eight out of ten holiday shoppers plan to buy gift cards. They will spend an average of $155 on them. 

Let me share a little secret. You don’t have to pay full price for gift cards. You can get them from resellers and save anywhere from 8 percent to 35 percent.  These cards are for well-known retailers, from Abercrombie & Fitch to 

“You give someone a $50 gift card and they think you’ve spent $50, when in reality you only spent maybe $40 to buy it,” says Odysseas Papadimitriou, CEO of Card

To do that, you need to have the card sent to you and then you give it to the person on your list. Most gift card resellers do not charge for shipping. 

What if the card is scratched and doesn’t look new?

“Go to the store where the card is sold and ask them to give you a new card with the same value,” Papadimitriou advises. “That way you get brand new plastic to give to your friend or family member who will have absolutely no clue.” 

What if the card is loaded with an odd amount?

That’s often the case at these resale sites. I just went online and found a Coldwater Creek card for $139.41 on sale for $118.50. That’s 15 percent off. But you’d never give someone a gift card loaded with a crazy amount like that. It’s a dead give-away that you bought the card from a reseller. 

Again, there’s a way around that. You can go to the store and ask them to split the card.  For example, you could get two $50 cards and have the rest ($18.50) put on a third card you can use.  Or you could pay an extra $1.50 and make the last card worth $20. 

Buy discounted gift cards for your holiday shopping

Many savvy shoppers now buy discounted gift cards to use, rather than to give away. It’s like cashing-in on an instant sale. 

“I buy the gift cards for myself,” says Kristin Morse, vice president of marketing at Plastic, one of the big gift card resellers. “So I save money before I even go into the store.” 

Morse says she likes to stack her savings, using the discounted gift card to buy things that are on sale. If there’s a coupon, that’s even better. 

"It adds up to where you can really stretch your dollars,” she says. 

Morse tells me about 80 percent of their customers buy gift cards to use for themselves. She says that extra little bit of savings lets them get what they really want.

If you decide to use the resale market, be sure to deal with an established website, such as Plastic Jungle, Gift Card Granny, Card Hub, Cardpool, or Gift Card Castle. Always pay with a credit card, not a debit card. That gives you extra fraud protection should there be a problem. 

The ultimate in convenience

The 2011 Gift Card Survey by found a significant rise in the availability of e-gift cards that are emailed to the recipient.

Starbucks, Best Buy, Gap, Pizza Hut, Staples, and American Express all added a virtual version of their gift cards in the last 12 months. Amazon lets you send gift cards via Facebook

“It appeals to the last minute shopper, maybe someone who got a gift they didn’t expect and they want to respond to it,” says Bankrate’s Janna Herron. 

Some electronic gift cards are printable (like e-tickets); others are simply a promotional code the recipient uses when shopping. 

“E-gift cards still make up a small percentage of overall gift card sales, but that segment is growing,” Herron says. 

Because an e-gift card could be confused with spam, it’s a good idea to contact recipients to let them know what you did. You might even want to follow-up to make sure they got it.

Know the rules

Gift cards are much more consumer-friendly because of federal rules that took effect last year. According to the Federal Trade Commission:  

  • Money on a gift card cannot expire for at least five years from the date the card was issued or money was loaded onto the card.
  • Inactivity fees cannot be charged until the card has not been used for at least one year. You can be charged a fee to buy the card or to replace a lost or stolen card.
  • The expiration date of a card must be clearly disclosed on the card, and fees must be clearly disclosed on the card or its packaging. 

More info:

Federal Trade Commission: Buying, Giving, and Using Gift Cards