Save money with gift cards(Read article summary)
The online gift-card resale market is thriving. Trent Hamm explores the market and how it can save you money.
A while back, I needed some minor home maintenance materials. I had a short checklist of things – a new air filter for our air conditioner (possibly several if there was a sale), some masking tape, some paint for a bit of touch-up work, and a few other odds and ends. None were extremely urgent, but I needed to make a stop in the next few weeks.
Naturally, whenever I’m going to be spending significant money, I search around for discounts. After all, if I can save $10 on an item or a store trip with 15 minutes of internet searching, it’s well worth it.
For some reason, I typed in “Home Depot coupon” into the search form in the upper left corner of my browser, but I had it set to search “eBay” rather than the usual “Google,” since I’d just been looking up values of some trading cards using eBay. I glanced at the results and I found a bunch of Home Depot gift cards. (I was confused as to why I was looking at eBay listings at first, but I quickly figured it out.)
Anyway, I couldn’t help but notice that many of the cards were selling for below face value. I saw $50 face value cards selling for $40 and often less than that.
Naturally, my frugal wheels started spinning. The only thing that kept me from clicking “Buy It Now” was one not-so-little concern: how do I know that the card is legit? In other words, might I be buying a card that’s already been used?
This seems like a natural “middle man” business for an entrepreneur: buying gift cards at, say, 60% or so of face value, verifying the card, and selling it at 80% or so of face value. You keep that 20% in the middle.
If there’s a decent idea out there, chances are someone has done it, and it turns out that several had.
For the first few times I tried this, I used a service called Plastic Jungle that’s now defunct; for the last few times, I’ve used a virtually identical service called Cardpool. Both of these are/were exactly as I described: a clearinghouse for unwanted gift cards.
For that initial Home Depot trip, I bought a $50 Home Depot gift card for $42 and it worked like a charm, instantly saving me $8 on stuff I would have already purchased.
Since then, I’ve used these kinds of gift cards for lots of things. I used $450 in Hyatt gift cards for a convention-related stay at a Hyatt Regency hotel about a year ago – all of those cards were about 10% off of face value. I’ve picked up a few cards on discount for various family restaurants around here for the occasion when our whole family goes out to eat together – again, saving at least 15% on our ticket.
All of these cards were picked up using Cardpool or a similar service and I have not yet had a false gift card. Even if I did, Cardpool has a guarantee program.
A few quick caveats:
If you have an unwanted gift card, you won’t get near the face value out of it. No card broker is going to pay you anywhere near the face value of the card. You might get a better return via eBay, but then you run some risk of having to deal with scams. How are you going to disprove that the card wasn’t in fact already used if someone disreputable buys your item and then claims the gift card was used up when they receive it? Even then, you’re still not getting close to face value for the card.
What does that mean? If you can reasonably use a card you already have, do so. If you sell it, you’re going to take a loss on it.
At the same time, the only time it makes sense to buy a gift card is if you are absolutely sure you’re going to use it. For example, there are really only a few restaurants near our home where we feel comfortable taking our children, so gift cards to those places are a sure thing. Similarly, if I’ve already booked a room at a particular hotel, finding a gift card for that chain is also an absolute sure thing.
If I ever use the word “might” or “maybe,” I don’t buy the gift card. It’s simply not something I actually need to use, thus it’s not something I should be spending my money on.
Having said that, buying gift cards at a discount can be an easy way to cut your price on a purchase that you know you’re going to make. I’ve been very happy with the process.