Want to Save Money Every Time You Shop? Pay With a Discounted Gift Card

Holiday shopping is here – but remember, only amateurs pay retail.

In addition to frugal hacks like cash-back shopping, price comparison websites, online coupons and rewards credit cards, true deal hounds will seek out the secondary gift card market.

Sites like Raise, Cardpool, Plastic Jungle and ABC Gift Cards provide new homes for unwanted retail scrip. At these and other secondary market sites you can buy cards at less – sometimes a lot less – than face value.

Although cards for popular retailers like Target and Walmart may offer only a 3 percent discount, others may hover in the 10 to 25 percent range. (I’ve heard of specialty cards going for 50 percent off, but that’s rare.)

At these sites you can also sell any cards you have but don’t want, earning up to 92 percent of their value (and sometimes more if you agree to take an Amazon credit instead of cold, hard cash).

How do these cards end up as orphans? Either they’re not a good fit or the sellers would rather have the money.

Or sometimes both: A reader on my personal website was given gift cards to a steakhouse and a bath-and-body shop. Lovely gifts in theory, but she’s a vegetarian who’s allergic to fragrance. So she sold them via Plastic Jungle and earned $80 to spend on something she could actually use.

On the other end of such deals is someone who pays less for a dinner out or gets to shop for fancy bath products at a discount. Everybody wins.

You’ll win all year long if you use secondary-market scrip to pay for everyday wants and needs. An astonishing variety of discounted cards are available for groceries, remodeling/DIY materials, gasoline, coffee, clothing, pet supplies, haircuts, fast food, movie or concert tickets, toiletries, massages, meals out, shoes, and trips to the dollar store.

A coupon that never expires

In terms of holiday shopping, it’s true that buying gift cards limits you to specific stores. But a lot of us already know we’re getting fancy fruits from Harry and David’s for our parents or something from Toys R Us for our nieces and nephews. Using a discounted card means automatic savings – it’s like a coupon that never expires.

You can also just give the cards themselves. The babysitter might enjoy some credit at iTunes or Macy’s; the sister who just got her first apartment could use a Target gift card to buy the odds and ends that make a house a home. (Or for toilet paper. It’s her call.)

Don’t wait until the last minute to order, though. Since the cards are secondhand they might have specific motifs, such as wedding bells or birthday cakes. (If that happens, go into the store in question and use the card to buy another card. Yes, it’s silly.)

The easiest way to find the best deal is through an aggregator site called Gift Card Granny. Type in the card you want to buy (or sell; more on that below) and check the rates among the sellers displayed. The aggregator will also let you set an alert for a card you want but don’t see listed.

You may see eBay among them. If you like that online auction site, by all means go ahead – just make sure you aren’t being charged for shipping. The secondary card sites generally mail the products for free.

If the best discounts are through Cardpool or Raise, access either one through a cash-back shopping site. You’ll get rebates of up to 1.5 percent that way.

The tragedy of “gift-card bulge”

Sometimes you’ll see gift cards for sale on Craigslist. Obviously you need to be careful about this, since (a) the card may have been used up or (b) the seller might take your money and then take off.

To protect yourself, meet in a public place and make it clear in your email or phone call that before turning over the cash you’ll need to check the card balance. You do this with the 800 number or website URL on the back of the card.

If the person is a scammer he or she simply won’t show up, or will show up and hope you’ll be too embarrassed to actually check the balance. (Don’t be.)

The cards you buy from secondary sites have all been checked before being resold. However, some sites will guarantee them only for a certain period of time, e.g., 45 to 60 days. I’ve never had a problem using these cards, but neither do I let them languish in my wallet.

In fact, I have at least one drugstore and one movie-theater card in my wallet at all times. To the delight of my young nephews, I often have a McDonald’s gift card, too. Tote that scrip with you in case you suddenly remember you need to get something at Walgreens, or in case you find yourself craving French fries.

To prevent “gift card bulge” in your wallet, store cards on your smartphone with apps such as GoWallet, Clutch, Gyft, Tango Card and Lemon Wallet. Even if a retailer can’t scan directly from your mobile device, most of them can hand-enter the information.

Selling your unwanted scrip

Is it tacky to resell a card someone gave you? Nope. Once a gift is yours, you can do whatever you like with it. That includes regifting it, donating it to charity or shooting it full of holes with a nail gun.

Besides, sometimes you receive a card that:

• Is for a retailer that’s nowhere near you. A card to a restaurant chain whose closest franchise is 25 miles away is a card that will likely languish in a desk drawer. The Chicago Tribune reports that an estimated $41 billion in gift cards remained unspent between 2005 and 2011.
• Isn’t big enough. Yes, that sounds spoiled. But if someone gives you a $25 gift card to a high-end handbag store, the present will end up costing you money.
• Just doesn’t interest you. Don’t care much for candles, kitchenware, sports gear, fast food? See “languish in a desk drawer,” above.

Or maybe you simply prefer the Amazon credit. That was me one Christmas, when $75 worth of might-or-might-not-get-used cards became nearly $64 worth of buying power on the world’s largest online retailer.

So go ahead and write the thank-you note. Just dance around how the present will be used, e.g., “Thank you so much for your gift of a card to (Retailer-I’d-Never-Shop-At). It was so kind of you to think of me during the holidays, and your generous gift will be put to good use.”

It will, too — just not quite in the way the giver expected.

Tips from the pros

Keep in mind that secondary-market cards should help you stick to your spending plan – they’re not an excuse to overbuy. So if you can’t afford to go shopping, don’t.

A few more ideas for getting the most for your money:

Set those alerts: Some brands sell out almost instantly, which makes it hard to luck into them. So ask Gift Card Granny to let you know when your favorite cards are available – and be ready to pounce. (Me, I’m always poised to grab a Cinemark or Regis card.)

Seller beware: The rates can be noticeably different, so click “sell gift cards” on Gift Card Granny and compare the percentages carefully.

Amazon bonuses: At least two sites, Cardpool and Plastic Jungle, pay up to 5 percent more if sellers will accept an Amazon gift card credit.

Register them: A site called ScripSmart lets you sign up for email alerts such as “retailer just filed for bankruptcy” (it happens) or “nag me” reminders to spend the cards. Remember: They’re no good to anybody if they’re stuck in that desk drawer.

What’s the best deal you’ve ever gotten on a discounted gift card? Brag below or on our Facebook page.