It's the season to give and when we don't quite know what that gift should be, we get a gift card. That way, the recipient can choose their own gift, right? Gift cards are big business, amounting to an estimated $90 billion dollars in spending annually. If you're that recipient of a gift card this year, there are some tricks to get the best bang for the buck. Here are six ways you can get the most out of gift cards. (For more, see Why Retailers Love Gift Cards.)
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- Don't Forget
Before all else, don't forget you have that gift card in the first place. Did you know that up to 10% of all gift cards are never used - putting billions into retailers pockets, for free! Even if you have a gift card to some place you don't like to patron, avoid feeding this money pit. Put the gift card in your wallet - maybe in front of your credit or debit card, so this money doesn't slip your mind.
- Don't Blow It
That gift card is free money, right? It's with this mindset that a lot of people spend with gift cards anyway: when paying with gift cards, an average 20% more is spent on an item. Don't fall into this trap of feeling like you're spending free money - this gift card represents your cash now. Spend it like you would dollars in your wallet.
- Catch a Sale or Coupon
So how would you spend that gift card money if it were your cash? We all like a sale, so be sure to wait for one to get more bang for your gift card buck. January is a good time, but don't be afraid to wait a little longer if you know you'll need, say, clothes for summer. Look for coupons for your gift card retailer - just because you're using a gift card doesn't mean you can't get a discount, too. Consider signing up for email notifications from the gift card retailer, so you can pounce when your gift card money gets you the best value.
- Shop Online
Most retailers now have an online presence, so be sure to check the web. Deals are often better online, and selection of sizes and such wider, as items come straight from a warehouse. Be sure to do a quick internet search using your retailer name and "coupon code" to make sure you're not missing out on an extra discount. (For more, see 7 Tips For Shopping Online Safely This Holiday Season.)
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- Trade It
Can't find any use for your gift card at all? Maybe you got a spa service but hate that sort of thing, or got a dinner at a steak restaurant when you're a vegetarian. Think of making a trade; there are many online gift card trading or selling services, where you can still get some cash value for your off-the-mark gift card. Make sure you check the fine print and what cash value you'll get for giving up your gift card.
- Donate It
Still can't find any use for that gift card? Consider donating the value to charity. Some gift card trading websites like Plasticjungle.com allow you to choose from a list of charities to give your gift card balance to - making your gift card balance a great gift to an organization in need. Your gift may even be tax deductable as a charitable donation; check your gift card exchange service for details. (For a related reading, check out The Top 5 Most Charitable American Cities.)
The Bottom Line
Don't squander your gift card balance just because you weren't the one forking over cash. By using a sale, coupon or even an online trading service you can make sure your gift gives you what you really want, because wasn't that the point of the gift card in the end? Above all, don't feed the billion dollar gift card money pit retailers love - it should be your gift, not theirs.
For the latest financial news, see Water Cooler Finance: FBI Insider-Trading Bust.