Don’t Buy Into Holiday Gift Cards

Buying a gift card or certificate might be one way to deal with people whom you have no idea what to get for the holidays. And true, for the person receiving a gift card, it can feel like free money.

However, if you’re going this route, you’d probably be better off just handing them a wad of twenties. After the jump, the reasons why, and what to do if you’re stuck with a crap gift card.

Frequently, purchasing a gift card results in lost money. Predictably, many of them just never get put to use, but what happens just as often is that the recipient doesn’t spend the entire amount. According to an article in the New York Times, five to 15 percent of the card’s value becomes abandoned. So what happens to the extra money? Here’s where you get involved in a depressing consumer scheme, where the leftover value goes back to the store. In a nutshell: “If you buy a gift card for a family member or friend, there’s a good chance you’ll give a little gift to the retailer or bank that issued it as well.” We bet you’re not thinking, Well, gee, since Visa was so good to me this year, I’ll let them keep the change.

So what to do with that Ann Taylor credit of $200 that mom so excitedly gave to you? There are now several websites that can help you convert your gift cards to cash, or exchange them for other retailers. Although you’ll likely lose some value of the card this way as well, services like GiftCardRescue.com will give you a quote, and either let you sell it for cash, or trade for an Amazon credit (smarter, seeing as you can buy pretty much anything on Amazon these days). [New York Times]

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