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 â€“ 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 Iâ€™m going to be spending significant money, I search around for discounts. After all,Â if I can save $10 on an item or a store trip with 15 minutes of internet searching, itâ€™s well worth it.Â
For some reason, I typed in â€śHome Depot couponâ€ť into the search form in the upper left corner of my browser, but I had it set to search â€śeBayâ€ť rather than the usual â€śGoogle,â€ť since Iâ€™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,Â I couldnâ€™t help but notice that many of the cards were selling for below face value.Â I saw $50 face value cards selling for $40 and often less than that.Â
Naturally, my frugal wheels started spinning. The only thing that kept me from clicking â€śBuy It Nowâ€ť was one not-so-little concern:Â how do I know that the card is legit?Â In other words, might I be buying a card thatâ€™s already been used?
This seems like a natural â€śmiddle manâ€ť business for an entrepreneur:Â buying gift cards at, say, 60% or so of face value, verifying the card, and selling it at 80% or so of face value.Â You keep that 20% in the middle.
If thereâ€™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 calledÂ Plastic JungleÂ thatâ€™s now defunct; for the last few times, Iâ€™ve used a virtually identical service calledÂ 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, Iâ€™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 â€“ all of those cards were about 10% off of face value. Iâ€™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 â€“ 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 wonâ€™t get near the face value out of it.Â 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 wasnâ€™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, youâ€™re still not getting close to face value for the card.
What does that mean?Â If you can reasonably use a card you already have, do so.Â If you sell it, youâ€™re going to take a loss on it.
At the same time,Â the only time it makes sense to buy a gift card is if you areÂ absolutely sureÂ youâ€™re going to use it.Â 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 Iâ€™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 â€śmightâ€ť or â€śmaybe,â€ť I donâ€™t buy the gift card. Itâ€™s simply not something I actually need to use, thus itâ€™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 youâ€™re going to make. Iâ€™ve been very happy with the process.