Wednesday, September 23, 2015

Don't Leave Money On The Table: Discounted Gift Cards

Gift cards are some of the most popular gifts given. About two-thirds of all American consumers have purchased a gift card at some point - there's millions of these things floating around. But you'll always find people who don't want to use them for some reason. Either the card is for a store they don't shop at or they forget they have them, or some other reason. As a result, there is over $1 billion dollars loaded on gift cards that goes unclaimed.

Companies have sprung up to help consumers tap into those funds. People can sell their unused gift cards for cash to these companies, who them turn around and sell them to others who want them at a slightly higher price, but still a discount to face value. And larger companies are getting into the act. Costco sells gift cards now for all sorts of venues - you can get a $50 gift card to a restaurant for $40. Instant $10 savings!

But if you know where to look, you can get even bigger savings. A couple of websites that buy and sell gifts cards that I have used are Gift Card Granny and Gift Card Rescue. These sites offer guarrantees that the cards they sell are valid, which is a nice for my piece of mind. Although they sell cards for all types of stores, you'll find the biggest discounts on cards for specialty stores - cards for places like Pier 1 Imports, Williams Sonoma, or Ann Taylor often can be had for discounts in the 20% to 35% range. The smallest discounts are found on cards for places that everyone shops at frequently - places like gas stations and grocery stores. Often, these discounts are only 3% to 5%. In my opinion, that's not even worth it - your savings won't even cover your sales tax.

This is a great option to keep in mind when you are planning a large purchase. For example, a couple of years ago, I found two china cabinets I wanted to buy at Pier 1 Imports. The total price, with tax, was about $650. I went online and searched for discounted Pier 1 gift cards. I found a bunch and bought them. Here's my order. The column on the left is the card value and the column on the right is what I paid for it.

So I bought $645.74 in gift cards for $516.57. That's a 20% discount. And I bought these cards with a credit card that gives me 1% cash back, so my savings were actually 21%. I don't remember if this was my situation or not, but if you then wait to buy your item at the store until it goes on sale, you can save even more.

I ended up getting $650 worth of furniture for about $520 dollars. That's a savings worth shopping for.

As I mentioned, not all the gift cards these sites sell are good deals. Sometimes the discount is so slight, it's not worth it. And companies have caught on to this practice and sell their cards directly to the sites for small discounts, which get even smaller as they are passed on to you. But if you know you are going to make a large purchase from a specialty store, it worth the few minutes it takes to check these sites for discounted gift cards. You could save a hefty chunk of change and not leave any money on the table.


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