Gift cards reached a total of $28 billion in sales! Make sure you don't waste any money with yours!
If you received a gift card or two for the holidays this year, you’re not alone.
The National Retail Federation anticipated spending on gift cards - the most requested present - would reach over $28 billion this year. In fact, 81.1 percent of shoppers intended to purchase at least one gift card this holiday season.
With holiday shopping behind us, it’s time to start thinking about gift returns and exchanges, as well as the best way to spend those gift cards. Before you blow your gift card’s balance on unnecessary items, consider these seven tips for savvy shopping:
1. Register it.
Gift cards are like cash in that if they get lost or stolen, there's no way to get your money back. Unlike cash, however, registering you gift card provides you with protection. Take a few moments to register you card with the retailer or restaurant via their website. This way, you can cancel the card if it goes missing. You may also find added perks upon registration, like a free coffee on your birthday from Starbucks.
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2. Review the details.
Consumer protection laws ensure plenty of time to redeem the card, but it’s still a good idea to read up on the rules and review potential restrictions. Gift cards from credit card companies may include redemption fees, while promotional gift cards - those received for free with a purchase - are usually considered a coupon and may carry product restrictions and rapid expiration.
3. Exchange it.
Gift cards seem like the easiest gifts to get right and yet, there are plenty of people who still get it wrong. Even though it’s the thought that counts, it’s frustrating to receive a gift card to a store or restaurant you don’t like or isn't nearby. Luckily, you can exchange gift cards for cash using sites like GiftCardGranny.com, enabling you to spend the majority of the card’s value on something you really want.
Under the new CARD Act, consumers with gift cards are protected from mounting inactivity fees and early expiration dates. Since 2009, retailers are prohibited from adding fees to cards that haven't been used for at least one year, and cards cannot expire for at least five years. That means you have plenty of time to think about a purchase and buy when you’re ready. This ensures you don't spend the funds just because you’re up against the clock.
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5. Stay on budget.
Shoppers who pay with a gift card pay an average of 20 to 50 percent higher than they would otherwise. If the gift card reduces an item’s cost to a price within your budget, go for it. Otherwise, reign in the desire to spend double the amount of your gift card and try to find something within the balance or as close to it as possible.
6. Avoid breakage.
Leaving a dollar or two unredeemed on your gift card may seem harmless enough, but it’s something many retailers count on. It's called “breakage,” or leftover money on gift cards that never gets used. Though you shouldn't buy unnecessary items just to use up your gift card, keep it stashed in a visible place in your wallet so it's on top-of-mind whenever you go to pay.
7. Re-gift it.
Unwanted gift cards make wonderful (and free) gifts for someone who does like the store or restaurant. Since most holiday gift cards feature themed graphics, you may consider asking the customer service department to transfer the funds to a generic store gift card for less obvious re-gifting purposes. You can also purchase a gift from the store using the card for a more thoughtful approach.
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