Guide to the Gift Card Economy

Love ‘em or hate ‘em, gift cards continue to be one of the most popular presents to give and receive. According to a study by CEB Tower Group, Americans loaded over $124 billion onto gift cards in 2014, much of which was gifted in the form of “e-gift cards” or mobile gift cards.

But gift cards weren’t always as easy to use and reliable as they are now. Years ago, card issuers were able to impose a gaggle of fees on their cards that made them much less consumer-friendly. However, the Credit Card Act of 2009 improved consumer protections for gift certificates, gift cards, and general prepaid cards. Upon passage of the law, it became much harder for card issuers to bog down their products with the dormancy fees, inactivity fees, service fees, or expiration dates that had previously diminished their value.

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These protections improved the gift card experience for consumers, while also improving gift card “spillage” – gift card waste attributed to fees and unused or unclaimed cards. As SEB Tower Group notes, spillage peaked at nearly 10% of all gift card funds in use in 2006. Thanks to the Credit Card Act of 2009, spillage now sits at around 1%.

Still, that’s no small sum of money. According to new research, nearly $750 million in gift cards would go unredeemed in 2014.

Where to Sell Your Unwanted Gift Cards

With $750 million in gift cards sitting in sock drawers across the country, it’s pretty safe to assume many people were on the receiving end of a gift card they lost, forgot about, or just didn’t want last year. Maybe it was for a store that isn’t in their area, a restaurant they don’t like, or a retailer they would never use. Regardless, it’s easy to see how someone could end up with a gift card they found absolutely pointless. But what happens now?

The good news is, the Internet has given way to the creation of a ton of gift card resale sites that allow you to unload those unwanted cards for a small fee. In most cases, you will need to resell your unwanted gift card for a loss, but that’s surely better than letting it sit in your sock drawer forever, isn’t it? Here are a few of the sites you can consider as you look for ways to dump those unwanted cards:

There are dozens of other sites out there, but you get the point. Each site works in a different way, but they all have the goal of helping you get rid of cards you don’t want.

In some cases, you may sell your gift card to the site itself, but in others, you may try to sell it directly to another person who is looking for a discounted gift card to their favorite store.

Either way, there are plenty of benefits. Not only can you earn cash that you wouldn’t have earned otherwise, but you can also turn around and use that money for another “gift” you might actually enjoy. And even if you take a loss and sell your card for 80% to 90% of its value, it will surely lead to a better outcome than having a gift card in your sock drawer for eternity, right?

The Benefits of Buying Unused Gift Cards

For every benefit that comes with selling unwanted gift cards, there is an inverse benefit for those who want to buy them. For those who shop at the same store often, or simply want to buy discounted gift cards that they can re-gift to others, the financial benefits are huge.

Let’s take a look at As of this writing, it offers dozens of Wal-Mart gift cards for sale at 4% off their retail value. That may not sound like a lot, but let’s imagine that someone buys Wal-Mart gift cards for all of their grocery spending in a given month, spending $500 at the very least. Saving 4% on all of their purchases would net them a $20 savings over the course of one month – and that doesn’t include any savings they can acquire by shopping sales, price-matching, or using coupons.

But the savings edge deeper when you’re willing to consider gift cards that aren’t quite as popular. Clothing and accessory gift cards for stores like Aeropostale, Abercrombie & Fitch, Famous Footwear, and Zappos are often sold at discounts of up to 25% or more.

Want to eat dinner at Applebee’s? Buy a gift card at 20% off and enjoy a 20% discount on your dinner with little effort on your part. Ready to do some updates on your home? Buy a Home Depot or Lowe’s gift card for around 10% off and save that much on your new deck furniture, kitchen cabinets, or paint supplies. There are literally hundreds of gift cards listed on these sites that make way for huge discounts on things you were going to buy anyway.

Tips for Getting the Most Out of Used Gift Cards You Purchase

Before you buy used gift cards online, have a strategy. Here are some tips that can help you get the most out of your purchase:

Have a Plan

Taking advantage of used gift card discounts isn’t something that works well if you haven’t planned ahead. You’ll need to have plenty of time to find the best deal, plus plenty of time for your gift card to arrive in the mail or by email.

To minimize the hassle and waiting time, make sure you know what you want to buy before you buy your used gift card. Having your purchases mapped out at a specific store can help you purchase the appropriate value card and avoid getting stuck with a gift card you don’t want or can’t use.

Stack Used Gift Cards With Other Sales or Promotions

Just because you use a gift card doesn’t mean you can’t take advantage of sales, coupons, and other promotions. Before you make an online purchase with a used gift card, check sites like for online coupons you can stack. Meanwhile, check store websites and fliers for paper coupons you can use when you make your in-store purchases. If you’re taking the time to buy a used gift card, you want to save as much as you can, right?

Make Sure the Store Still Exists

What happens when you buy a gift card to a store that has closed its doors? You are completely out of luck. Before you buy a used gift card, make sure the store issuing your card isn’t closing any time soon. Otherwise, you might be stuck with a worthless gift card keepsake.

Read the Fine Print

Before you buy a used gift card online, make sure to read the fine print. Make sure there are no exclusions, hidden fees, purchase fees, or shipping and handling fees you are unaware of.

If the point is saving money, you need to understand and be aware of any fees that will get in the way of that goal. Analyze any fees that do exist and make sure that the purchase is still worth it before you proceed.

Check Purchase Guarantees

Some gift card resale sites offer certain protections that guarantee the safety of the funds on your used gift cards., for example, guarantees the use of your gift cards funds for up to 100 days from the date of your purchase, up to a maximum of $1,000 per customer. Make sure you understand the limitations on any purchase guarantees available so that you can keep your gift card purchases under those limits.

What to Watch Out For

The gift card economy may be alive and well, but below it sits a dark underbelly of illegal activity. The truth is, there are a lot of risks associated with buying gift cards, and that risk isn’t just limited to used gift cards. In fact, many of the scams involve brand new gift cards you buy directly off of a store rack.

Here are some popular gift card scams, and how you can avoid them (or at least minimize their damage):

Gift Card ‘Draining’

As Consumer Affairs reports, this is where a consumer purchases and activates a card in one store (or online) only for someone else to effectively “drain” the funds from the card just a few hours later. In many cases, this fraud is based on the thieves’ ability to get the card’s PIN number, which is usually on the back of the card. According to Consumer Affairs, you should always check new and used gift cards for tampering before you purchase them. Obvious tampering could be a sign that someone already has your PIN number — and is ready to use it.

If you turn out to be a victim of a draining scam, contact the retailer who sold the card immediately. They may be able to investigate your claim and refund your money. If you buy a used gift card from an online resale site, contact them immediately. Most sites, including, offer certain consumer protections and guarantees regarding the funds on the used cards they sell. If your card is drained, they should be willing to refund your money.

Fraudulent Gift Cards

Since most online gift card resale sites make guarantees on the cards you purchase, thieves have taken to online auction sites to sell fraudulent gift cards with absolutely zero value. You have probably seen used gift cards on, for example, and these are the kinds of offers you should watch out for.

To avoid getting ripped off, never buy a used gift card from a site that won’t let you verify its value and offers no guarantees. If you do, you’re just asking for trouble.

Gift Cards Purchased with Stolen Credit Cards

According to, thieves have also found they can purchase gift cards with stolen credit cards, sell them for cash, and walk away. If that’s the case, you may find that your used gift card is canceled by the retailer.

To avoid this sticky situation, only buy used gift cards from retailers that offer guarantees and never buy them from an individual off the street or online.

Other gift card scams can include gift card “swapping” where a thief swaps an empty card for one that is already loaded with a cashier, and gift card “tampering” where a thief replaces a worthless card for a fully loaded one then attempts to return it to the store. In both cases, you can protect yourself by checking gift card packaging for tampering, keeping all your receipts if you buy a gift card directly from a store, and sticking to retailers that offer guarantees when you buy used cards instead.

Editorial Note: Compensation does not influence our recommendations. However, we may earn a commission on sales from the companies featured in this post. To view our disclosures, click here. Opinions expressed here are the author’s alone, and have not been reviewed, approved or otherwise endorsed by our advertisers. Reasonable efforts are made to present accurate info, however all information is presented without warranty. Consult our advertiser’s page for terms & conditions.

Holly Johnson

Contributing Writer

Holly Johnson is a frugality expert and award-winning writer who is obsessed with personal finance and getting the most out of life. A lifelong resident of Indiana, she enjoys gardening, reading, and traveling the world with her husband and two children. In addition to The Simple Dollar, Holly writes for well-known publications such as U.S. News & World Report Travel, PolicyGenius, Travel Pulse, and Frugal Travel Guy. Holly also owns Club Thrifty.