JACKSON, MISS– As the shopping season is underway, many are looking to skip the hassle and just go for gift cards.
According to finance site Wallethub.com, gift cards to Target, Best Buy, Netflix and Walmart are some of the top winners this holiday season.
To avoid your gift card becoming junk-drawer clutter, the site released 10 tips for making it count this year:
- Look For A Discount. You might assume that sales and savings don’t apply to the gift card market, but that’s not always the case.
- Avoid Card-Network Gift Cards. Gift cards from Visa, MasterCard and Discover might seem like they’re as good as cash, since they can be used anywhere, but they pack other fees, such as $2.50 a month for every month it isn’t used.
- Don’t Confuse Gift Cards & Prepaid Cards. Despite often being displayed next to each other in stores, gift cards and prepaid cards are very different animals. Gift cards are designed to be used only until the original balance is gone. Prepaid cards, on the other hand, are re-loadable and designed to serve the same purpose as a checking account with a debit card.
- Beware Loyalty Cards. A loophole in the law allows non-reloadable prepaid cards (aka gift cards) that are received through a loyalty, award or promotional program to expire with no restriction. For context, normal gift cards cannot expire until five years from the date of issuance.
- Resale Is Always An Option. If you don’t end up using a particular gift card or the recipient doesn’t like it, you’re not out of luck. Rather, you can sell it on a gift card exchange or simply swap gift cards with a friend or family member.
- When In Doubt, Just Give Cash. Cold, hard cash might seem a bit less personal than a gift card, but it completely eliminates guess work from the equation and is the most versatile gift anyone can give. Plus, you might be able to give your recipient more value without shipping fees or shopping trips to worry about.
- Tap Into Unredeemed Value. Have you contributed to the billions of dollars in gift cards that have gone un-redeemed in recent years? Check your drawers and find out. Any gift card from the past five years is most likely still good.
- Buy Gift Cards With Rewards. Most credit card rewards programs allow you to redeem your points/miles for gift cards from a wide variety of major retailers.
- E-Gift Cards Are Great In A Time Crunch. E-gift cards have been gaining traction in recent years, and increased mobile functionality stands to foster more widespread use of such products this holiday season.“E-cards make redemption easier in terms of logistics, time, and salience (once you enter the card number to your account, the money is there waiting to be used),” says Ayelet Gneezy, associate professor of marketing in the University of California, San Diego’s Rady School of Management. “In short, this is one domain where I expect digital to provide consumers great value.”
- Avoid Using Gift Cards As An Excuse To Overspend. When redeeming gift cards, two-thirds of consumers spend more than their cards’ face value, according to Consumer Reports. This is likely due to the same psychological factor that leads consumers to spend more with credit cards than cash: the money somehow seems less real.