Reselling a gift card? This is peak season for scams
You have lots of options to exchange gift cards, but be careful with online sales
Expert on fraud, travel and debt.
If at the holidays you received gift cards you’re unlikely to use, be careful if you try to sell or cash them in online.
Fraud.org, a part of the National Consumers League, warns in a fraud alert that each January it sees an uptick in scams involving the resale of unwanted or unused gift cards.
In one such scam, a gift card holder finds a “buyer” on eBay or Craigslist. The seller emails the codes on the back of the card so its value can be confirmed, and the fraudster pays via PayPal or some other person-to-person payments app.
Once the “buyer” has the codes, he or she quickly uses the gift card online, then cancels payment, says John Breyault, a vice president at Fraud.org.
Beware “anytime you’re dealing with someone you don’t know,” Breyault says.
A better option, he says, is to use a gift card exchange.
How gift card exchanges work
Legitimate gift card exchange websites, such as CardPool.com, Raise.com and GiftcardZen.com, let you sell your gift card to an interested buyer. There’s also a new app that will help you cash in your gift card.
With all of these, you won’t get face value for your gift card, but you will get some of the gift card’s value back that you can use however you want.
At CardPool.com, for example, a $25 Starbucks gift card currently will get you an Amazon.com gift card worth $20.01 or you can get a check from CardPool for $18.88.
Another option is to sell it on CardPool’s marketplace, where you’re likely to receive about $20 from a buyer.
An app to cash in your gift cards
If you have a gift card from Visa, Mastercard or American Express, you can convert it to cash using the Prepaid2Cash app for iPhones and Androids.
How it works: Scan your gift card using your phone’s camera. Once the card is accepted, your cash is deposited in your bank account, typically within two to three business days.
Prepaid2Cash charges 7.5 percent, plus $1.50, for each transaction, so a $100 gift card will net you $91.
Research gift card resellers first
Before you use a gift card exchange site, Breyault recommends checking with the Better Business Bureau to see if there are complaints against the company, and check to see if the company guarantees its transactions.
Shelley Hunter, spokeswoman for GiftCards.com, also recommends being sure the gift card exchange site is backed by legitimate investors, and that it has customer service available.
If a site offers you “face value or more, it’s probably a scam,” Breyault says.
The value of a card is based on its usability, Hunter says, so a gift card for Walmart should bring you about 80 percent to 90 percent of its face value, while a gift card for a teen clothing store with few locations around the country would typically bring about 60 percent to 70 percent of the face value.
Other options for unused or unwanted gift cards
If you aren’t going to use the gift card yourself, you have some other options.
Target: Many Target locations will let you exchange dozens of gift cards, including Walmart, Macy’s and Barnes & Noble, for a Target gift card.
Gift card exchange kiosks: These work similar to Coinstar machines in which you pour your coins and select a gift certificate. As with an online gift card exchange, you will get less than face value. To find a location of a nearby kiosk, just key in your ZIP code. To prevent fraud, you will need to bring your state driver’s license or ID, mobile number, a credit card or debit card, and an email address. You present them to store personnel during its regular customer service operating hours.
Regift your gift card: If you know someone who will use the gift card, give it to that friend, family member, co-worker or a homeless person you see regularly on the way to work.
Donate it to a nonprofit: You can donate your gift card to a nonprofit, which might be able to use it or auction off a high-value gift card as part of a fundraiser, Hunter says. You may even be able to deduct your gift card donation on your taxes.
With gift cards that you’re unlikely to use or with remaining balances you are unlikely to tap, you have options. If you decide to cash in your gift card, be careful, Breyault and Hunter say. You don’t want to hand over your gift card to a fraudster and be left with nothing.
See related: Gift cards: What to do when a retailer files for bankruptcy, 7 things you need to know about gift cards, How to replace a lost or stolen gift card (or replace an unwanted one), Buying gift cards with credit cards gets easier now
- You can now rent a car with a debit card without all the hassle – If you prefer to use debit cards instead of credit when you travel, your next trip may be less stressful. Some travel companies have relaxed their restrictions on using debit cards to book rental cars ...
- Wearable payments are finally starting to take off in the U.S. – A growing number of U.S. brands and financial services companies are embracing payment-enabled wearables that you can tap to pay without fumbling for a physical phone or card ...
- Contactless cards get crucial boost as Chase embraces tap-and-pay – Chase is preparing to roll out contactless technology on all its newly issued and renewed Visa cards ...