Your Holiday Guide to Gift Cards

by John Kiernan on November 23, 2011

On the eighth day of Christmas, my true love sent to me…eight things to know about gift cards this holiday season. Sure, you might have been expecting some milk maids or something, but with gift cards firmly entrenched as the most popular type of holiday present and the U.S. agriculture industry not what it once was, you might find this more useful. So gather together your swans, geese, golden rings, calling birds, French hens and turtle doves; get that partridge out of the pear tree; and settle in to learn everything you need to know about getting better gifts this year

1.  Last year’s leftovers are still valuable
It’s not just you; all of us in general don’t even come close to using all of the gift cards we receive each year. In fact, a quarter of U.S. adults have at least one gift card left over from last year, and 55% of them have more than two, according to a Consumer Reports Holiday Survey. The top three reasons people gave for not using their cards: not finding anything they want to buy, lack of time, and forgetfulness. It’s not too late to get value from old gift cards, however, as you can sell them for cash via an online gift card exchange.

In addition, you can also re-gift old gift cards tied to stores that you don’t like but that others do. This is even possible if the card in question has spent the last year in your wallet, accumulating scratches and wear. Most stores will allow you to buy new cards with old ones and thereby essentially repackage them with this year’s holiday gift card design.

2.  You can’t discount discounts
There’s another side to the gift card exchange coin. Given that you are able to sell old gift cards for cash and are unlikely to get full value in doing so, you can expect to find some discounted gift cards available on the Web. The beauty of buying a discounted gift card is that the recipient won’t know that you paid less than face value for it. So making your gifts appear 30% more expensive than they truly are can just be our little secret.

3.  Wish lists eliminate guesswork
It’s often difficult to determine what to give people during the holidays, especially if you’re dealing with teenagers or co-workers you don’t know a ton about. As long as you are connected with them on Facebook or know their e-mails addresses, however, this shouldn’t be a problem because that’s all it takes to find their Gift Card Wish Lists. Now, this does not mean that you have to give them gift cards, as the information you can glean from seeing their favorite stores will help focus your present search, no matter what you plan on buying. Just think: Even if you do strike out in terms of what you buy, you’ll know that your recipients will be happy with store credit from a retailer they really like.

4.  You can pay with credit card rewards
If you’ve been saving up your credit card rewards, now might be the time to redeem them, as most credit card companies allow you to redeem for gift cards. Not only that, but with many credit cards, the number of points or miles needed for a certain gift card denomination is less than what’s required to get an equal amount of cash. Therefore, there’s value in gift card rewards redemption, so it’s worth at least looking into.

5.  There’s no need to pay fees
We’ve gotten pretty used to fees being a big part of our plastic spending vehicles, especially with all the recent commotion concerning monthly debit card usage fees. However, you will be pleased to know that fees are certainly avoidable when it comes to gift cards. Only about 30% of gift cards charge for shipping, so delivery costs can be minimized by simply filtering those cards out of your search results or focusing on digital gift cards, which are delivered via e-mail. What’s more, service charges are typically only found with general-use gift cards (e.g. American Express Gift cards, Visa Gift Cards), so avoiding them will allow you to avoid such unnecessary costs.

6.  You should treat gift cards like cash
By “treating your gift cards like cash,” I mean you should not lose sight of the fact that you are indeed spending real money when using a gift card. For some reason, people sometimes lose touch with reality when wielding plastic, and overspending with a gift card can nullify any savings garnered. According to the aforementioned Consumer Reports Survey, 66.7% of consumers spend more than the face value of their gift cards. While gift cards can indeed be helpful in terms of affording necessary big-ticket purchases, you must be careful to avoid using them for the wrong reasons.

7.  You’ve got time
The CARD Act—the personal finance reform legislation that took effect in February 2010—prevents a gift card’s funds from expiring less than five years after it was issued or money was last loaded on it.

8.  Don’t forget to read your card
This year marks the first holiday season that gift card issuers are required to print disclosures about fees and expiration dates on their gift cards. So, in order to better understand the terms of your gift card, just flip it over.

Discussion

Antonia Naten
I was never one to give gift cards, hated it actually, but these days its so much easier to find and purchase them then traditional gifts. I really don't purchase too many gift cards and its mainly for friends and co-workers - but I even started to add them into family gifts as well. I throw in an occassional Amex giftcard or Visa as a stocking stuffer for my kids and my mom or even ones to stores I know they favor like Gap or Old Navy. This year, I noticed these "aircards" for my daughter's cell phone company, Tracfone, and I'm adding a few to her stocking this year -- I figure that it will be easier for both of us instead of me having to go online to purchase minutes for her. I actually hadn't considered these cards until I was online on the company's website a few days ago and then it spurred me to look up other cards. While I still don't think they can take the place of a gift itself, I think the whole "giftcard" idea does make it easier for everyone and even can allow for a little creativity here and there.
November 27 at 05:59 am

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