Techniques to pay less than face value or boost buying power
By Erin Peterson
Gift cards have plenty of benefits -- they're convenient, they're never the wrong color and they fit perfectly inside an envelope. But they do have one major drawback: Recipients know exactly how much you spent on them.
Or do they?
Though the fact is rarely advertised, gift cards can be bought for less than they're worth. You might be able to buy a gift card for half price -- or even less -- and your recipient will be none the wiser. (Unless, of course, that recipient is you.)
If you know how and where to shop, sometimes you can get a lot more than you pay for. Here's how.
Auction sites. Auction sites such as eBay often offer cards for less than full price -- but you'll need to do some research to make sure the card is legit. Be sure to check the seller's ratings and ask about any expiration date or non-usage fees that might apply. "If you can get at least a 30 percent discount on the card, I think it's worth it to go through those steps," says Fatima Mehdikarimi, a shopping and finance expert who runs ShoppingQueen.com.
Gift-card specific sites. Swapagift.com and Certificateswap.com are niche sites that cater to people looking to buy, sell, and trade their gift cards. "Their discounts aren't usually quite as good as the ones on eBay, but they have an extra layer of protection," says Mehdikarimi. At these sites (unlike a typical auction site), the gift card's value is secured with the seller's credit card, and some sites will guarantee your purchase up to a certain amount. You'll tend to find a flood of new cards -- and likely bigger bargains -- after holidays such as Christmas, Valentine's Day, and Mother's Day.
Tax-rebate bonanzas. Sears, Kmart, and Kroger are among the retailers that are offering 10 percent bonuses on gift cards purchased with tax rebate checks. There are some key details you'll want to keep in mind before you buy: At Kroger, cards can only be purchased in increments of $300 ($330 loaded on the card). At Sears and Kmart, only those receiving paper checks can take advantage of the deal, and the gift card must be equal to the total amount of the stimulus check.
Holiday bonuses. During the holiday season, local restaurants will look to get on your shopping list by offering extra on a gift card to sweeten the deal -- an extra $25 on a $100 card, for example. If you're looking for a deal on an upscale salon or spa, Mother's Day and Valentine's Day are two holidays where you'll be more likely to get more bang for your buck. A grand opening banner above a locally owned store is also a good sign, says Shakira Brown, a shopping expert who runs the site retailsecrets.net. "In the service industry, you'll see a lot of gift card specials where you can get 20 percent to 50 percent off the face value," she says.
Bulk buys. Plan to be giving the same $50 bookstore gift cards to all your friends and family for years to come? A large volume order might help you save some cash -- as long as you're willing to shell out quite a bit upfront. At Dave and Buster's, for example, discounts kick in at $500, while you'll have to spend at least $10,000 to rack up any savings at Best Buy. To pursue this option, get in touch with the corporate sales department of a company and ask about volume discounts.
Grocery grabs. You can swing by a clothing store to buy a gift card -- but you might also be able to pick up the same card from your local grocery store. You'll pay the same amount upfront, but if you've got a credit card that pays you back 5 percent for purchases made at a grocery store, the best option is clear.
Specialized sites. Sites like Restaurant.com and Citydeals.com offer gift certificates at steeply discounted prices or throw in "extra value" credits (usually about 10 percent of the total) for the retailer. You'll see offers from Olive Garden, Pier 1, Borders, and plenty of locally owned spots. Be sure to check the restrictions -- at Restaurant.com, for example, the gift certificates may require a minimum purchase and tack automatic gratuities onto the bill.
Miles and points. Those frequent flier miles that are languishing in your account can often be redeemed for gift cards for movies, clothing stores, and other retailers. And while you may be able to get cash back for points you've earned on your credit card, you may be able to get a gift card worth more than the money. "If you're someone who pays their bill off every month, these are freebies," says Brown. "Take advantage of them."
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Or do they?
Holiday bonuses. During the holiday season, local restaurants will look to get on your shopping list by offering extra on a gift card to sweeten the deal -- an extra $25 on a $100 card, for example. If you're looking for a deal on an upscale salon or spa, Mother's Day and Valentine's Day are two holidays where you'll be more likely to get more bang for your buck. A grand opening banner above a locally owned store is also a good sign, says Shakira Brown, a shopping expert who runs the site retailsecrets.net. "In the service industry, you'll see a lot of gift card specials where you can get 20 percent to 50 percent off the face value," she says.
