Discounted Gift Cards: The New Coupon

I'm currently house-sitting in Anchorage, where one of my duties will be kid-wrangling while my niece does the Alaska Run for Women. The first order of the day: Breakfast at IHOP, my treat — and at 8% less because I'll be paying with a discounted gift card.

Sites like Plastic Jungle, CardCash, Cardpool and Swapagift re-sell unwanted gift cards to hundreds of different retailers. A secondary-market aggregator called Gift Card Granny can help you find the deepest discounts.

Discounted gift cards are as good as coupons: They provide a consistent discount of 3% to 30% or more. While I don't buy a whole lot of Stuff, I do use these cards to save money on haircuts, groceries, movies and more.

Where do they come from? Most often from someone who needs or wants the money more than the card. Since resale sites will pay up to 92% of face value, it's an easy way to raise some fast cash.

But plenty of cards end up on the market because they were colossal fails. Maybe your well-meaning uncle thinks you're as interested in fly-tying as he is. Or maybe you unwrapped $25 in plastic scrip to a shop where the cheapest item is $40. (Extra bummer points if it's an item you don't particularly want, or a store you'd never visit otherwise.)

Heck, I've even heard of a vegetarian being given a gift card to a steakhouse. True story.

A card for every buyer
Suppose you're an independent-movie-house kind of person who never sets foot in chain restaurants? There's probably a discounted card out there for you, too, such as:

  • Animal lovers: PetSmart, PetCo or 1-800-PetSupplies
  • Homeowners and DIYers: Lowe's, Home Depot, Ikea, Sears
  • Tech fans: Apple, Best Buy, Dell, Radio Shack, Staples, Office Max, Office Depot
  • Travelers: American Airlines, hotels, Travelocity, BedAndBreakfast.com
  • Car owners: AutoZone, Pep Boys, gas cards
Tip: Some “cards” are actually e-codes, i.e., good only online. One woman I know accidentally bought a $50 e-code for Wal-Mart. So she shopped online for….a $50 Wal-Mart gift card.

 

Even if you're on a super-tight budget and/or you prefer thrift shops and yard sales, chances are you hit “regular” stores once in a while for things like kids' shoes, undergarments, OTC meds or school supplies. If so, discounted gift cards will take some of the sting out of paying retail.

Of course, if you're OK with secondhand aspirin or yard-sale underpants you can just keep on keepin' on.

How to get the best deal
I suggest going to Gift Card Granny to look for the deepest discounts. Note: If Cardpool is one of the best choices, you can sweeten the deal by purchasing through a cash-back shopping site called Mr. Rebates, which offers a 1% rebate for Cardpool purchases.

Don't see what you want? Set an alert on Gift Card Granny and you'll get an e-mail when the card becomes available. This is easy to do and also easy to cancel when (a) you get the card you need or (b) the e-mails start to get on your nerves.

Certain cards sell out fast — especially supermarkets and gas stations — so be ready to jump as soon as the alert hits your inbox.

Some sites offer additional services. I get “retailers of the week” e-mails from ABC Gift Cards, cluing me in about higher-than-usual discounts. Recently I helped a friend buy more than $300 worth of Lowe's gift cards at 8% off, to pay for landscaping materials. A few days later Cardpool sent an e-mail touting 9% off Lowe's cards for the next 48 hours. (Now they tell me!)

Tip: Keep cards from your favorite stores with you at all times, in case you see a hot deal or manager's special.

 

There's a subtle danger involved with the use of these cards: That the discount will tempt you into buying more cards than you need. Don't buy anything that busts your budget. Even if it's on sale.

Six uses for a discounted gift card

    1. End run around the wedding gift registry. If your BFF is registered at Bed Bath & Beyond and Macy's, buy a discounted card and use it to pay for your present.

 

    1. Pump up PTA attendance. Offer a gift-card door prize at the next meeting. If you don't see more parents there I'll reimburse you for the cost of the card.(Just kidding!)

 

    1. Black Friday boost. Poised to grab $2 DVDs and $10 smartphones? They'll be even cheaper if you pay with cut-rate cards.

 

    1. A gift in and of itself. If your brother loves a particular store, give him a card and let him buy whatever he wants. Buy it well in advance, though, because there's a chance you'll receive a seasonal or special-occasion card, e.g., a card decorated with holly or a wedding cake. (If so, take it to the store and buy a new card with it. If you don't allow enough time to do that you're going to look like either a re-gifter or the kind of cheap bastard who buys discounted gift cards. Neither epithet would bother me much, but you might have thinner skin.)

 

    1. Something for your kid's teacher. Trust me: Ms. Smith absolutely, positively does not need another “No. 1 Teacher” mug. However, she might want something to put in the mugs she already has. I just saw Coffee Bean and Tea Leaf cards and Caribou Coffee cards for 10% and 12% off, respectively.

 

  1. Giveaway on your website. Nothing gets virtual butts in virtual seats like a giveaway. Put a gift card up for grabs and promote the heck out of your contest. No one has to know you didn't pay full price. Unless, of course, your card has hearts and Cupids on it.

Treats for less
I brought along several other kinds of discount cards on this trip:

    • Red Robin, 8.9% off. Pricier than I'd like, but the fries and drinks are bottomless and it's a family-friendly joint.

 

    • McDonald's, 11% off. The play area is a good place to burn off kid-beast energy when it's 45 degrees and raining sideways. (This has nothing to do with me and McNuggets. It's totally, completely about the kids.)

 

  • Regal Cinemas, 15% off. Two words: Summer movies.
Tip: My daughter and son-in-law get free movie tickets and soft drinks at AMC through the My Coke Rewards program, then pay for their popcorn with a 20%-off AMC gift card. Yes, movie concessions are not frugal. But they're fun, if you budget for them.

 

I don't go to restaurants much. But I like to take my niece and her kids out to eat when I visit. So why not do it for 8% less?

Besides, this time around my food will be free. That's because I have a social media relationship with IHOP, which just sent me a coupon for a free “Rooty Tooty Fresh ‘n Fruity” breakfast. The downside? I have to speak the words “Rooty Tooty Fresh ‘n Fruity” out loud. In public.

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LifeAndMyFinances
LifeAndMyFinances
9 years ago

I prefer to find gift cards on Craigslist. They are certainly harder to find, but rather than paying 95% of the value, you can pay as little as 60% of the value or less. People are more willing to give up their cards for cheaper through this medium for some reason. Most likely because they have a smaller audience. 🙂

Donna Freedman
Donna Freedman
9 years ago

True enough. But some people don’t feel comfortable using Craigslist, and some people live in areas where Craigslist isn’t an option or where the Craigslist pickings are mighty slim.

Nicole
Nicole
9 years ago

In this town, if you’re a vegetarian, the best place to go is one of the steak-houses. All the other places put bacon in with their veggies.

Diane
Diane
9 years ago
Reply to  Nicole

Oh, Nicole, your comment sure rings true with me! After 20+years as a vegetarian. I have learned that steak places usually have great vegetarian options. I think it’s because they don’t want one non-meat eater to prevent a whole group from choosing a steak place for a meal. In my experience, fish houses are the very worst! They ASSUME you’re eating there because you WANT fish, so there’s fish in every appetizer, all the salads, soups and entrees. BBQ joints run a close second. Why go there if you don’t want Q? Funny, bacon and BBQ are the things I… Read more »

Barb
Barb
9 years ago

Donna, not telling me anything I dont already know, but a great reminder. Also, most movie theaters have the same kind of deal as amc. I get something free everyweek from Cinemark, this week its a free large soda with anysized popcorn.

Lets not forget all the ways to earn gift cards as well……

Barb
Barb
9 years ago

Donna, not telling me anything I dont already know, but a great reminder. Also, most movie theaters have the same kind of deal as amc. I get something free everyweek from Cinemark, this week its a free large soda with anysized popcorn.

Lets not forget all the ways to earn gift cards as well……

Donna Freedman
Donna Freedman
9 years ago
Reply to  Barb

“All the ways to earn gift cards” is an entirely separate column.

Megan
Megan
9 years ago
Reply to  Donna Freedman

Oooh – will you write on that topic? I’d love to hear more on how to earn gift cards!

Hipjazz
Hipjazz
9 years ago

OOH. How I hadn’t thought of using an e-code to buy an actual gift card…I’m gonna blame pregnancy brain and move on. We buy a lot of our groceries at Target, but Plastic Jungle only had e-codes when I looked. In retrospect, I say “duh!” Thanks for the tip. =)

Donna Freedman
Donna Freedman
9 years ago
Reply to  Hipjazz

You’re welcome. (And congratulations on the pregnancy.)

eileen marie
eileen marie
9 years ago
Reply to  Donna Freedman

I don’t think you can do this at Target -they have pretty strict policies.

retirebyforty
retirebyforty
9 years ago

I haven’t tried this because we don’t like pre paying for anything. I guess it’ll be good for a discounted haircut, but that’s about it. If I have a bunch of gift cards sitting around, I would feel pressure to use them.

LauraElle
LauraElle
9 years ago
Reply to  retirebyforty

Have you tried thinking of the gift cards as pre-paid shopping or a pre-paid activity? I get GCs for Christmas and birthday and use up gradually throughout the year. It’s great to have paid-for movie or coffee shop GCs I can parse out over a couple of months.

Barb
Barb
9 years ago
Reply to  retirebyforty

I’m happy to prepary for things I know I will use-my monthly movie outing and so on.

Obviously it depends on your will power. In my case prepaying generally gets me clost to twenty percent off and more, on things that I normally do and get.

Donna Freedman
Donna Freedman
9 years ago
Reply to  retirebyforty

Just buy them as needed, then?

Samantha
Samantha
9 years ago

Thanks so much, Donna.

I just used the e-code for Walmart I’ve had forever, to purchase a real gift card. They are shipping it to my house for free, and next time I’m in the store, I’ll use it!

Super useful info!

Kelly
Kelly
9 years ago

Thanks, Donna, great article.

Also, I’m right there with you on the ridiculous-names-for-menu-items issue. Not cool, IHOP, not cool at all.

Donna Freedman
Donna Freedman
9 years ago
Reply to  Kelly

Or how about the famous “Moons Over My Hammy,” at Denny’s? 😛

Loretta
Loretta
9 years ago

I had never heard of these sites, so I was glad for this info. I have seen gift cards cheap on Craigslist, but I was worried they might not be legit. I’ve been burned by Craigslist many times! I’m assuming these are checked out in some way before reselling, so I think this just might help me out during the upcoming wedding season! Thanks!

Donna Freedman
Donna Freedman
9 years ago
Reply to  Loretta

The cards are indeed checked out before they’re sold.
When buying in person, from Craigslist or a friend at work, you could call the 800 number on the card. This could feel embarrassing, as though you were calling the seller a liar, but you should do it anyway.

Tanya
Tanya
9 years ago

Great tips; I have never bought discounted gift cards, but now that I have some suggestions for frugal ways to use them, I will try it. Thanks.

E. Murphy
E. Murphy
9 years ago

This is probably a stupid question, but how do you know they are good cards with the full amount on them when you buy from private parties?

Hipjazz
Hipjazz
9 years ago
Reply to  E. Murphy

There’s usually a number on the back of the card you can call to check the card’s balance. The most practical thing to do would be to call that number in front of the Craigslist person you just bought the card from…now, how to do this diplomatically, without coming off as “I think you might be a criminal”…that one, I haven’t figured out.

Marsha
Marsha
9 years ago
Reply to  Hipjazz

Anyone selling a gift card to a stranger has to expect that the card will be checked out. And the seller should make sure the money they receive for the card isn’t counterfeit.

If I was selling a card, I would insist that they check it out, so they couldn’t come back to me later and complain that it wasn’t valid.

jackowick
jackowick
9 years ago

If you have a “large” purchase you are saving for, accumulating gift cards can be a way to put the money into something that is only liquid for your purchase. For example, if you need a new lawn mower, and you buy $50 worth of HD cards per month (at a discount), you won’t be able to blow it on something you don’t need. Everyone’s money is different, everyone’s strategy is different.

Marsha
Marsha
9 years ago
Reply to  jackowick

But what if Sears (or whoever) has a much better deal when I’m ready to buy?

krantcents
krantcents
9 years ago

You’ve opened my eyes to a new way of saving money. I presume, you must do some planning to find out what is available and if it has to be mailed or not.

Donna Freedman
Donna Freedman
9 years ago
Reply to  krantcents

Once you find the deal you want on Gift Card Granny, click on it and the site doing the selling will tell you what to do next.
It’s pretty simple. You can even buy postal insurance if you’re worried about the card going astray in the mail. (Hasn’t happened to me yet.)

Jenn
Jenn
9 years ago

Not post-related, but wanted to say Congratulations to JD for being on Time’s list of 2011 Best Blogs.

A well-deserved honor!!!

Jenn

rumorsofmydemise
rumorsofmydemise
9 years ago

This is great! I hadn’t thought of discounted gift cards before; but now I have another great way to save on the textbooks that I can’t find at the library.

Justin @ MoneyIsTheRoot
Justin @ MoneyIsTheRoot
9 years ago

I wrote an article about this several months back on my blog. Discounted gift cards have been around from quite some time, and it still amazes me how so few people take advantage of them. Home Depot and Lowe’s cards are great for home updates, and AMC cards for movies, and even discounted cards to gas stations…

Amber
Amber
9 years ago

I pointed my newly fianced friend to check these out as she buys stuff preparing for her wedding. One thing I did notice at GCG was that the discount was much greater for specialty shops (e.g. REI or Mikasa 15-20%) than for someplace like Target (avg. discount around 2.9%).

Paula @ AffordAnything.org
Paula @ AffordAnything.org
9 years ago

I didn’t know about the secondary market / gift-card aggregater.

I’ve looked through a few of the discount gift card sites, but I don’t do it regularly because it’s too cumbersome to look through ALL the discount sites. An aggregater really helps.

I find these sites are best when you use them to buy cards for stores you regularly, consistently shop at — Target and Home Depot, for me.

Fiona
Fiona
9 years ago

It’s possible that a lot of these resellers are actually thieves. On gift card reselling sites, you see a lot of gift cards with odd balances, like $63.72 instead of a round number as you would expect a gift card to have. I don’t know about things like Home Depot or movie theaters, but it’s really common for clothing retailers like Anthropologie. One possibility is that the person got the card as a gift, bought something for less than the value of the card, then decided to sell the rest–but chances are most people who find one thing the like… Read more »

Amber
Amber
9 years ago
Reply to  Fiona

I suppose it is possible as you say, but if it were a common problem wouldn’t the stores be taking more action against such resale markets? Or trying to validate the card by connecting the ID to a personal credit card? I haven’t seen any kind of warnings aginst using these cards. I think if someone spends $307.12 at Anthropolgie, hopefully they go home to realize how foolish they’ve been and try to recoupe the rest of the cost of the card.

Donna Freedman
Donna Freedman
9 years ago
Reply to  Amber

@Fiona: I suppose it’s possible that someone shoplifted, “returned” the item and then sold the card for cash. Anything is possible. To me it seems like an awful lot of work: go in the store, steal something successfully, wait a bit, “return” it, put the card up on the site and wait for someone to buy it. Maybe that’s how a tiny minority of Americans make their money. I doubt it. It could be that some have uneven balances because the sellers got Anthropologie items as wedding gifts, returned them for store credit and eventually decided they needed the cash… Read more »

Pat
Pat
9 years ago

I discovered this trick about 6 months ago, and it works great! I’ve had very good luck w/ebay and plasticjungle, I’ll have to try the other sites as well. I buy the cards with my cashback credit card, earning an extra 1 – 2% off, and then I usually only buy the big ticket items when they are on sale, giving me a further discount. I have a very nice grill from Lowe’s this way — $230 grill on sale for $200, bought with a card that cost me only $185, which I earned ~ $2 cash back. So $183… Read more »

SB(One Cent At A Time)
SB(One Cent At A Time)
9 years ago

I have a Citi platinum card, which offers ‘extra cash’ as reward points. I bought once a $50 target gift card for $45 worth of extra cash, accumulated in few months. They do offer various other gift cards.

If you have a Citi card and are wondering how to spend your points, gift cards are the best thing for your points, and when you talk about gifting, a gift card, to me, is the best.

Nicky at Not My Mother
Nicky at Not My Mother
9 years ago

JD, just letting you know that your Facebook “send” button isn’t coming through on Google Reader, so you just get a bizarre “this article!” note in the middle of each article.

Alex
Alex
9 years ago

I did the “accidental buy” thing – I bought an $80 Apple Store gift card (for $70!) instead of an iTunes one. (Steeper discount, wasn’t thinking). I then proceeded to buy 3 iTunes gift cards (2*$15, 1*$50) from the Apple Store.

Diane
Diane
9 years ago
Reply to  Alex

Good save, Alex!

Cheryl
Cheryl
9 years ago

I just want to point out that you should only buy a gift card for a company that is healthy financially. Once a company declares bankruptcy, the cards are often worthless. I’m thinking of Lines and Things and particu;arly Blockbuster, as my daughter received some of these cards as gifts, and they are now unusable.

Amber
Amber
9 years ago
Reply to  Cheryl

Just don’t let them sit around gathering dust. Everyone knows when a store is going out of business, they don’t just shut down overnight. Also it is not like Blockbuster is out of business, so your daughter may still be able to resell her card to someone who uses their online downloading or other outlets.

April
April
9 years ago

So searching giftcard granny brought me to ebay and I saw mutiple cards selling for more then their face value, can anyone tell me why someone would pay 258 for a 200 card or why some cards are for odd amounts? Maybe i should just stay away from ebay.

Donna Freedman
Donna Freedman
9 years ago
Reply to  April

People who bid higher than the face value may be counting on recouping their “losses” by way of eBay Bucks and cash-back shopping.
(It sounds weird to me, too.)
The odd-amount gift cards are either cards people used for a while but now want to sell, or merchandise credit for returning an item to a store. I wonder how many are from people returning unwanted wedding gifts?

Steve
Steve
8 years ago

If you buy a gift card on craigslist, make sure you go through switchon3.com. You don’t have to pay anything until they have the gift card in hand and have verified the balance.

Discount Gift Cards
Discount Gift Cards
6 years ago

Is there also the process of bidding for getting the discount gift cards, or we can buy these cards directly.

Donna Freedman
Donna Freedman
6 years ago

If you’re buying from eBay you’re bidding. Otherwise you’re just paying a stated price with no delays.

Elaine Parrish
Elaine Parrish
6 years ago

Its a great thing to having the discounted gift cards. I got so much discount for my father’s gift and I am so happy. its a nice services Thanks.

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