Community Corner

Gift Card Tips for the 2013 Holiday Season

Be savvy when purchasing gift cards this year.

With the holiday shopping season underway, CardHub has released its 2013 list of gift card tips and trends to help consumers maximize their savings:

  • Blurred lines between gift cards and prepaid cards: Retailers are increasingly attempting to get customers to register their gift cards and reload them when funds are low. The Reloadable Walmart Gift Card is one high-profile example of this practice, which is aimed at promoting loyalty and gathering useful consumer analytics. This stands to further confuse the distinction between gift cards and prepaid cards in the minds of shoppers, potentially leading to increased costs.
  • Watch Out for faux gift cards: Not only do consumers often mistakenly purchase prepaid cards thinking they are gift cards due to the positioning of in-store displays, but a loophole in the CARD Act allows non-reloadable prepaid cards (aka gift cards) that are received through a loyalty, award or promotional program to expire with no restriction. For context, normal gift cards cannot expire until five years from the date of issuance. It’s therefore important for consumers to verify that they are indeed buying/receiving actual gift cards this holiday season and to read any applicable fine print related to their product.
  • Mobile is hot, but not necessarily ready for primetime: E-gift cards have been gradually gaining traction in recent years, and increased mobile functionality stands to foster more widespread use of such products this holiday season. That’s good news for time-crunched shoppers looking to avoid shipping fees on their holiday gifts or buy at the last minute this holiday season. However, retailers still have work to do in this area for electronic gift cards to achieve true staying power.
  • Consider discounted gift cards: One might assume that sales and savings don’t apply to the gift card market, as gift cards are more akin to currency than retail products with traditional product margins. That’s not the case, however, as you can buy gift cards at discounts of up to 40 percent through online gift card exchanges.
  • General-purpose gift cards are costly: General-purpose gift cards, like those from Visa and American Express, tend to charge various fees because that’s the only way their issuers can turn a profit. Store-issued gift cards, on the other hand, do not need to charge any fees, since the retailer books a profit the moment you buy its gift card.
  • Scour your drawers for buried gift card treasure: More than $43 billion in gift cards have gone unused since 2005, according to TowerGroup. That’s important to note because those of us who have a lot of unredeemed value sitting in drawers at home can still get something out of it. After all, the CARD Act prohibits a gift card’s funds from expiring within five years. Consumers have three basic options when it comes to unlocking the value of unused gift cards. First, you can sell unwanted gift cards for cash. Secondly, most stores allow you to trade in old unused gift cards for new ones, which is great news for re-gifting cards that have developed noticeable wear and tear as a result of sitting idle for years. Finally, most states have programs that allow you to recoup unused funds from expired gift cards under unclaimed property laws.
  • Don’t pay for shipping: Roughly 30 percent of gift cards from major retailers charge for shipping, according to CardHub data, but these fees can be avoided by utilizing a gift card search tool to identify the retailers that offer free shipping and/or digital gift cards, which can be sent directly to someone’s inbox.
  • You can’t go wrong with a gift card: Not only are gift cards the most requested type of holiday present for the seventh consecutive year, according to the National Retail Federation, but the average consumer is expected to spend $163.16 on gift cards alone during the 2013 holiday season. In short, most of the people on your gift giving list want gift cards this year.


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