5 ways to spend gift cards wisely
How to make the most of your gift-card stash
If you joined in the gift-card haul this holiday season, be sure you're using them wisely. (Tribune file photo by Phil Velasquez)
1. Watch for fees or expiration dates. The CARD Act of 2009 states that retailers cannot impose expiration dates on gift cards for a minimum of five years and inactivity fees cannot kick in for at least a year after the card is issued. However, the Act doesn't apply to "bonus" gift cards that retailers offer as incentives (for instance, "buy at least $50 worth of gift cards and get a $10 gift card free"), so bonus gift cards may have shorter expiration dates.
Gift cards carrying a credit card or bank logo (also called "open loop" gift cards, since they can be redeemed at a variety of establishments) sometimes have monthly fees attached to them. Take note of fees and expiration dates before heading to the store or stashing gift cards in your wallet. Also check whether your gift card can be redeemed at other establishments owned by the same company (for instance, Gap accepts Old Navy and Banana Republic gift cards), as this allows for greater flexibility
2. Look for coupons, price reductions, or rebates. While not all retailers allow coupon stacking (using multiple coupons in a single transaction), many will allow you to combine coupons or rebates with gift cards. Woroch suggests searching for online coupons to stretch the value of your gift card. If you're shopping during the week after Christmas, you may find that prices drop even further after New Year's, but inventory could be more limited by then. That's why Pavini recommends monitoring the price after you buy and returning with your receipt for a price adjustment if applicable. "Usually you have 14 days to get the adjustment," she adds.
3. Treat it like cash. Woroch predicts huge discounts during the weeks following Christmas as retailers make space for new inventory. However, "don't spend just to spend," she cautions. Ask yourself the same questions you would if you were spending your own money rather than a gift card: Do I have the space for this? Will I actually wear/use it? Is this worth the price? If for instance, you have a $50 gift card to a local retailer, it's all too easy to find something for $65 and wind up paying an extra $15 that you wouldn't normally spend in order to redeem your gift card. (In some states, if the balance is below a certain amount, you can get cash instead of carrying a balance on the gift card so don't assume you have to use it up.)
Also keep track of gift cards as you would cash. As Woroch points out, some gift cards offer a registration option so that you won't lose the balance if your card is lost or stolen. Sites like ScripSmart.com allow users to manage popular gift cards in one spot and sign up for email reminders about your balance. The site also sends out bankruptcy alerts if a business is showing signs of bankruptcy, since gift-card holders could lose their balance if they don't redeem the gift card before the business goes under. iPhone apps like Wildcard and Tango Card also allow users to monitor gift card balances on the go, but some smaller retailers are not yet included in most gift card management tools.
4. Re-gift carefully. If you received a gift card you don't plan to use, consider re-gifting it or using the gift card to buy a present for someone else. "If there's an upcoming baby shower, I'd start thinking about presents for that," says Woroch. You can also bring a gift card into that business and ask them to transfer the balance onto multiple cards (for instance, splitting a $200 gift card onto several cards so you could re-gift a smaller balance) or trade a gift card with a holiday-themed design for one that's more appropriate to the upcoming occasion. Be sure to check the balance before re-gifting so you're giving an appropriate amount. If you use part of a gift card and want to re-gift a round number, most retailers will allow you to "top off" the gift card with a bit of your own money.
5. Sell, donate, or invest unwanted gift cards. In addition to re-gifting or using the gift card themselves, consumers have a few other options. Websites like GiftCardGranny.com, PlasticJungle.com, and CardPool.com offer a secondary market where consumers can sell unwanted gift cards for a percentage of the card's face value. For the philanthropically-minded, Pavini recommends GiftCardGiver.com, which sends gift cards to nonprofits. (Some organizations also accept direct donations of gift cards, which may be tax deductible.) Investment website GoalMine.com is offering a gift card trade-in program through the end of January where new users can trade in gift cards for 150% of the value of the first gift card to fund investment accounts.
(c) 2009 U.S. News & World Report