For over a decade, gift cards have been one of the most requested gifts. According to data from the National Retail Federation, holiday shoppers planned to purchase between three and four gift cards.
Gift cards make a great gift, especially if you don’t know what to give someone. After all, who doesn’t love permission to shop for themselves?
You can give all sorts of gift cards, but there are a few key things to consider. From selecting the right card to understanding the potential pitfalls, here are five insights that can help you make the most out of giving – and receiving – gift cards.
What to know before buying gift cards
When giving a gift card, you want to give one that you are confident will be useful to the recipient. If you know your recipient’s favorite store, spa, or restaurant, it’s safe to give them a gift card for that place; however, if you’re unsure or you think they’d like to use a gift card at more than one establishment, give a general or “open loop” gift card that can be used anywhere, like a Visa, MC, or American Express.
And what about fees? Retailer gift cards do not have fees, but some open-loop cards have upfront fees of a few dollars. You should pay this fee before giving the card as a gift.
Give free/discounted gift cards as presents
Some retailers, like Amazon, Target, and Best Buy, will offer free gift cards with a specific purchase or when you trade in something you no longer want, like a used tech device.
Then there are deal sites, like Paypal Honey and Rakuten, where you can exchange points you have earned from shopping for gift cards.
You can also buy gift cards at a discount or earn cash back when you buy a gift card – that’s instant savings!
Try a site like GiftCardGranny, who I work with, for discounts like this. And sure, you could use these gift cards yourself, OR you could set them aside for folks on your gift list who you know would enjoy them. Fewer gifts to buy!
Gift cards don’t have to feel impersonal
A criticism of gift cards is that they can feel impersonal or last-minute. Rather than giving a plain old gift card, try a site like PerfectGift, where you can order a personalized gift card featuring a photo of your choice and a phrase – like “Happy Shopping!” (my favorite phrase). You can also provide an accompanying greeting which will be “handwritten” on your choice of greeting card by one of eight robotic scribes at the company’s headquarters in Pittsburgh, PA. The cards ship in just a day or two, so this is a good option for last-minute gifting!
Gift card scams
Scammers are everywhere, and gift cards are not exempt. There have been cases where scammers zero out in-store gift cards and put them back on the shelf for sale. When you buy that gift card, it no longer has a monetary value. To avoid this when purchasing a gift card in-store, ensure the packaging is intact and bears no sign of tampering.
And this is unrelated to gift-giving, but if you are buying or selling something online, scammers often ask for payment – or propose providing payment – using gift cards because gift cards are not traceable. If someone suggests this, consider it a huge red flag!
Receive a gift card like a pro
Using gift cards quickly is the best way to avoid forgetting about them. Pop it in your wallet and use it as soon as it makes sense! Or, if you want to save it for a rainy day, designate a place where all gift cards are held, like in an envelope in your kitchen junk drawer.
If you want to spend the funds later but don’t want to think about it, you can add a Mastercard, Visa, or Amex gift card to your Amazon or Apple Pay balance. This is a convenient way to use up a remaining gift card balance. Amazon does not have a balance minimum, but Apple Pay’s minimum is $1.
Do gift cards expire? Many gift cards do not have expiration dates, but those that do must be longer than five years.
Pro tip: If you receive a gift card and then hear that the store is going out of business, reach out to customer service immediately. They might be able to make good on the value of the gift card, but if you wait too long you’ll be out of luck.
When you receive a gift card you don’t want
A few sites will buy your gift cards from you, including Raise, Cardcash, and Gameflip, but you lose a percentage of the monetary value when you do this. There used to be many more options for selling gift cards, but they have dwindled in recent years.
Another option is to hang onto the gift card and regift it to someone who would find it useful.
Or donate it! Some charities will accept gift card donations, so contact your charity of choice and ask. St. Jude, for example, uses Cardcash to facilitate these donations. Cardcash also accepts donated gift cards for other causes, including for hurricane victims.
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