Saturday, December 26, 2009

Smart spending: 7 ways to use gift cards wisely

By ANNE D'INNOCENZIO Associated Press

Got a stash of gift cards for the holidays? Better use them wisely.

That's become a little easier, because many retailers have eliminated expiration dates and fees that sap the cards' value over time.

The changes come well ahead of proposed rules from the Federal Reserve that wouldn't allow gift cards to expire for five years, among other changes.

Even so, about $5 billion, or about 6 percent, of what Americans spent on gift cards this year won't be used, including what's lost to fees, according to TowerGroup. That's down from a high of 10 percent in 2007, said Brian Riley, research director at the financial-services consulting firm.

It's easy to waste those nifty pieces of plastic. You might forget about them by sticking them in a sock drawer, or you might not spend the full amount. But in this tough economy, every penny counts.

“You should treat it like cash and have it be a contribution to something you really need or want,” said Laura Gurski, partner in the retail practice of consultant A.T. Kearney.

Here's how experts advise wringing out the full value of cards you receive:

1KEEP IT SAFE.Experts say that as soon as you get a gift card, put it in a safe place. That means stashing it in an envelope reserved just for gift cards. Some say to just put them in your wallet along with the credit cards.

“Don't leave them sitting on a desk,” said Dudley Blossom, chairman of the marketing department at LIM College, a fashion college in Manhattan.

2MAXIMIZE THE VALUE. Buy discounted merchandise when redeeming a gift card. Shoppers wanting to take advantage of post-Christmas discounts should do so between today and Jan. 2.

That's because stores won't be swimming in holiday leftovers through February, because they came into the holidays with lean inventories.

“You'll find the peak” of inventory right after Christmas, Riley said.

You also should look for any special discounts from retailers like J.C. Penney specifically for gift-card users.

Riley says it's better to spend beyond the value of the gift card because that will ensure that you used all of it.

Many shoppers don't redeem gift cards to their full value — but $3 on a gift card is $3 that's not coming out of your own pocket.

Want to buy that winter coat but couldn't afford it? Use the gift card toward the big purchase.

Gift cards may be free money, but experts say you shouldn't just buy anything, particularly in the difficult economy.

“You have to plan what you want to use it for,” Blossom said.

Gurski said customers getting an all-purpose card such as an American Express gift card should use it on necessities such as groceries.

Don't like that particular store? Then get together with friends and swap cards.

You can even do it online., a leading credit card comparison Web site, just launched a gift card application for Facebook.

Its main feature is the Gift Card Wish List, which let users pick favorite stores so friends know what gift cards they'd like.

But it also has a gift card exchange, which lets friends post cards they want to buy or sell at a discount.

Card-bearing customers can turn to sites like or to exchange gift cards or even donate them to charity.

But there is a price. At, customers can sell the card for cash and get up to 90 percent of the balance. (There's a minimum gift card value of $25). Customers can no longer list their cards on the site for direct swapping and must sell them directly to the company.

If you receive a card as a gift before the holidays, regifting is always an option.

You can also use the card to buy a holiday present for someone on your list.

This is some great advice.... Have a great week everyone!


At 6:21 AM, Blogger Renie Burghardt said...

Funny, I am going today to lunch at a larger town, and then to spend my gift cards! Great advice in the piece, Lucy!

Happy Sunday!


At 6:29 AM, Blogger Granny Annie said...

We spent our first gift card on our anniversary dinner this week. It was a joy to use. I gave a bunch to the grandkids and have about decided they are the best kind of gifts to give. These are helpful tips because I wondered what happens if little amounts are left on the cards. Whew, I'll bet those benefits to the issuing companies really add up.

At 6:51 AM, Blogger Cliff said...

yep, all good advice Lucy.
I know we've had some that never got used.
Hope you guys had a Blessed Christmas.

At 5:56 PM, Blogger Jim said...

Good advice Lucy! I even know all that and still I have old ones that I can't even find.
I like the idea of keeping them all in one place. Unless lightening strikes that is a really great idea. One strike would burn up the whole mess!

I hope your Christmas was good and now, HAPPY NEW YEAR!!

At 10:15 AM, Blogger LZ Blogger said...

I think that the biggest secret to using Gift Cards is this... actually "USE" them! They make as much money off of people not using them as they do from the use of them and the margins are a LOT higher that way too! ~ jb///

At 10:56 AM, Blogger Putz said...

I AGREE WITH EVERYTHING YOU SAID, BUT AM HAVING trouble with beginninning next year and endinging this year, dreampt of a fire ending all of my ideas, but did a resolution blog on beginning anew, so do i stop and follow my dreqm or beginn and follow my resolution????????????

At 8:27 PM, Blogger Mountain Mama said...

I'm sure your readers will take heed to your good advice. I didn't receive a gift card this year but am pretty frugal with my pennies!
Happy New Year!

At 12:02 AM, Blogger Jess said...

Hope you had happy holidays...lots and lots of love to you


At 2:58 PM, Blogger Jim said...

I used my last years Frye's card to buy part of Mrs. Jim's Christmas present. No problem there with age.

At 3:03 PM, Blogger Jim said...

Forgot to wish you guys a

At 10:41 AM, Blogger Big Dave T said...

I got just one gift card for Xmas, one from Best Buy. I have no idea what I want there.

Have a happy New Year's down there. Your frugality must be wearing off on us, by the way. We got a book on "365 ways to stay cheap" and my wife says we do most of them already.

At 8:46 PM, Blogger Rachel said...

Good advice Lucy. I say a lot of them don't get used, and that is profit for the place they were bought!

Happy New Year!

At 10:26 AM, Blogger Ralph said...

Good advice. I try and use them as I get them but once in a awhile those expiration dates got me.

At 12:48 AM, Blogger Jim said...

Boo! Did you read my hint about recycling the 1999 calendars?
They will work for 2010.

I'd like some hints or directions for doing my income tax for 2010. Can you write up a blog on this for me?

At 6:51 AM, Blogger Cliff said...

Thanks for the link Lucy, Jerry from Indy had just sent me that. Neat snow machine for sure.

At 7:24 AM, Blogger Lee Seibert said...

Yes Yes Yes. Using gift cards is the wisest thing to do. Don't let them go to waste. In fact I am working on a free service to help you do just that.


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