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10 Ways to Make the Most of Gift Cards

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the gift that gives

Gift cards are the ultimate no-brainer gift, and they're more popular than ever. More than 9 out of 10 Americans had either given or received a gift card as of 2015, according to the online marketplace Gift Card Granny, and buyers spent an average of more than $153 on gift cards during the holidays last year. Whether you're giving gift cards, receiving them, or both, read on to discover how to avoid any unpleasant surprises and make those gift cards work a little harder this holiday season.

Related: 50 Unique Holiday Gift Ideas for Everyone Priced Under $50

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know the different types of gift cards

There are two major types of gift cards: open and closed loop. Open-loop cards aren't tied to a specific brand or retailer, and they're typically backed by a big bank or credit-card issuer such as American Express or Visa. They can be used almost anywhere, but there may be $3 to $7 activation fee. Closed-loop cards, on the other hand, are good only at certain stores or websites. The advantage is that they typically have no fees.


read the fine print

Worried about expiration dates? Federal law bars non-use fees and requires at least five years before gift cards expire. Be particularly watchful with open-loop cards, however, as tighter expiration dates are more common. Another type of gift card to check closely is any promotional gift card given as a bonus or reward. Many expire relatively fast.

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don't pay full price for a gift card

Sites such as Cardpool, Gift Card Granny, and Raise allow consumers to purchase unwanted gift cards at a discount. Savings vary depending on the retailer. A recent scan showed 45 percent savings with 1-800-Flowers.com but just 2 percent savings on a Kroger gift card. Also, check redemption rules. Only some gift cards or codes can be redeemed in stores, while others are restricted to online use.

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don't get stuck with a gift card you don't like

Before buying something unneeded just to use a card, consider the alternatives. Sell a gift card for a bit under face value online; re-gift it to someone who may have use for it; donate it to charity at GiftCards4Change; or use it to buy something that can be gifted to someone else. Also consider taking the card to a Coinstar Exchange kiosk. Commonly found at large grocery stores, they accept cards from more than 150 high-profile retailers in exchange for cash as long as they have a balance over $20, although they don't offer face value.

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don't keep gift cards in your wallet (or keep them at all)

Gift cards can quickly clutter a purse or wallet. One easy solution: Use your phone. Apps like Gyft and Slide allow users to scan a card or manually enter the number, then generate a bar code a store clerk can scan. Or, instead of downloading another app, take a picture of the front and back of the card in order to use the number online even without the card. This is also a way to record the necessary information in case of loss or theft.

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skip the physical card altogether

E-gift cards are simply codes buyers receive online. They can usually be used in stores, as well, although buyers should confirm this beforehand, as a handful of retailers restrict their use to online purchases. When buying an e-gift card, be sure you have the correct, current email address for the recipient. If the code ends up in someone else's inbox, the recipient can claim it as their own.


reap rewards, even when buying gift cards for others

Restaurants frequently offer bonuses with certain gift-card purchases in November and December. Last year Chili's, Bonefish Grill, and Olive Garden gave gift card buyers a $10 bonus with the purchase of $50 in gift cards, according to DealNews. Some grocery stores offer fuel points with gift card purchases. Kroger gives a fuel point per $1 spent, and routinely doubles or even quadruples the rate for gift cards.


get (a little) money back

In about a dozen states, you can get some cash back once a gift card falls below a certain balance, such as $3 or $5. Residents of California can cash out any gift card with a balance less than $10, and some banks will reportedly cash out a gift card when presented with I.D. Check your state's Department of Consumer Affairs website to see what the rules are.

Major Retailers on the Brink
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watch out for retailers in trouble

A retailer can file for bankruptcy even as it continues to keep store doors open and sell merchandise. Be warned that the company may stop accepting gift cards immediately after bankruptcy proceedings begin, or may only accept them for a limited time. It may also be bought out by a new owner that refuses to accept the old gift cards. Golfsmith, Logan's Roadhouse, Aeropostale, and PacSun are among the retailers on GiftCards.com's 2016 "critical condition" list, so anyone with these cards should use them as soon as possible.

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protect yourself from gift card fraud

According to Scambusters.org, one of the biggest gift-card scams is customers being sold fake or used gift cards on auction websites such as eBay. Another risk is scammers who scan the magnetic strips of unpurchased gift cards at stores, enabling them to record the serial numbers. Once the owner activates the card, the scammer can use it. Avoid gift cards on auction sites and stick to reputable card resale websites. At the store, consider sticking to cards that are not sold from publicly accessible racks or ask the clerk for one that hasn't been displayed yet.

Related: 10 Signs You're Getting Scammed While Shopping Online