Sunday, November 11, 2007

How to save money by buying discount gift cards

Did you know that you can buy gift cards at a discount? You sure can. Thousands of gift cards are given each year and many times the person who receives the card doesn't need it. Now what do they do? They list it for sale on Ebay. That's right, every day people put unneeded and/or partially used gift cards from every major store in America up for auction. Ebay has more of them added every hour of every day. As the gift card market continues to grow, so will after market sales. This is a great way to save money during the Christmas holidays.

Why would anyone sell a gift card for less than retail value? It has to be a scam! No, actually it doesn't. While I am sure that some of the gift cards that go up for sale are stolen, I doubt that they are the majority of cases. There are many legitimate reasons why someone would sell a gift card to the highest bidder.

The gift card they received may be to a store they do not frequent or may not be local to their area. If grandma sends them a $25 gift card to the Olive Garden but the closest one to their house is an hour away, they might not be in a hurry to spend $10 in gas to go use it. Or maybe they just prefer to dine elsewhere.

Sometimes people just get too many cards for the same store at once. Seven $500 gift cards to Target as wedding gifts might be more than the happy couple will spend at the store in a year. Perhaps they could use cash in order to save for the down payment on their dream house. A gift card is not going to earn them interest.

Many stores offer gift cards as special promotions. Lowes or Home Depot runs ads for a free $250 gift card with the purchase of a certain number of shingles (or other item). Perhaps it is easier to do that than issue rebates, or maybe they do it so you have to spend the money at their store--a wise business decision on their part. A free gift card is great but if they already bought all the items they needed for their project, they might be willing to discount the card for cash today. Basically it comes down to the time value of money. A $250 gift card that they won't use for a year or $200 in cash today, hmmmm. What would you do?

Another reason is that many companies no longer offer cash refunds. If someone returns an item without a receipt, they will only get a merchandise card. Again, if they won't be needing anything from that store in the next few months, maybe discounting it is a wise choice. If they returned the item due to damage and no longer plan to shop with the retailer, then selling the card really is their only option.

So there are legitimate reasons why gift cards are auctioned off on Ebay. However that doesn't mean they are always legit. One way to protect yourself is to pay the seller with a credit card, that way you have some protection on top of Ebay's protection. You can also ask the seller for the card's code on the back and then call the store to verify the amount remaining on the card and that the card has not expired. I only deal with high feedback long term sellers on Ebay but after the Christmas holiday season you will find many new sellers popping on Ebay looking to sell their unused or partially used gift cards. The overwhelming majority of them will be legitimate sellers with valid cards but always take precautions.

Ebay's policy states that a seller may only auction one gift card per week, and no cards over $500 are allowed. So if you check a seller's feedback and see that they auctioned a gift card for the same amount last week, it is due to the one gift card at a time policy. They must sell them one at a time, which helps control the possibility that someone might list a bunch of bogus cards and then disappear.

I have never had a problem buying discount gift cards off Ebay. I am cautious though. As soon as I receive the card in the mail I immediately take it to the store and have them scan it to make sure it is valid and has the correct amount that I paid for on it. Never leave feedback for a seller before confirming this.

Enjoy your discount shopping while avoiding the clearance racks, or shop the clearance racks and get an even bigger bang for your buck!

Check out these great discount gift card deals going on at ebay:

Best Buy Discount gift cards
Walmart Discount gift cards

Old Navy and Gap gift cards

1 comment:

John said...
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