As the holidays approach, many well-meaning friends and relatives will be doling out gift cards—often because they don’t know what else to buy. Now, technology and new Federal Reserve Board rules can make these cards even more of a gift and less of a hassle.
Many shoppers, like Abbrea Askew, have received their share of gift cards for stores they don’t frequent. The 31-year-old stay-at-home mom was looking for a way to get rid of these cards and, through a Google search, learned about GiftCardRescue.com, an online marketplace for selling and buying gift cards. “It works out really well for me,” says the Atlanta resident. “I can stock up on the things I need instead of being stuck shopping at certain stores.”
Says Gerri Detweiler, a personal finance expert at Credit.com: “The good thing about selling gift cards is the ability to turn your card into something you can use, and most of us can use cash. The bad thing is, of course, that you won’t get the full value of the gift card because the company’s going to take their cut for helping facilitate the trade.”
GiftCardRescue pays 65% to 90% of the card’s value. Consumers earn more for popular gift cards, such as those for Walmart, or if they choose an Amazon.com shopping credit, says CEO and founder Kwame Kuadey. Other websites for buying and selling gift cards include Plastic Jungle, Swapagift, UpYourCard, and Card Pool.
Kuadey advises consumers to do their homework. “People go to eBay or Craigslist, but the danger with that is you’re getting the cards from a stranger,” Kuadey says. “You’re trusting that the person who is buying from you will mail you a check. When you’re buying, you’re trusting that the person you pay will mail you the gift card.” Askew also suggests, “When you get the card, make sure the balance is on it.” Pay close attention to the company’s policies, she adds.
A gift card exchange worked for Askew, but holding on to cards doesn’t have to be a waste anymore. Now, thanks to the Federal Reserve Board, there may be less of a rush to sell or trade. The gift card business reportedly exceeded $88 billion in 2009. An estimated 6% of cards went unredeemed or expired last year for reasons such as owners losing the cards or simply forgetting about them. “Very often, if the card is lost, it’s like losing cash,” says Ben Woolsey, director of marketing and consumer research at CreditCards.com.
But if the card is located up to five years later, this is now no longer the case. In light of new Federal Reserve rules for conventional gift cards purchased on or after Aug. 22, consumers may hold on to their cards—gift certificates included—without worrying about their value expiring. Cards won’t expire for five years from the date value was last added to them. Among the other changes: Consumers will clearly be made aware of potential inactivity or service fees, which should not apply unless the card goes unused for one year. To learn more, go to the Federal Reserve website.
With gift card exchange programs, in addition to government reform, you’ll get a gift you want when you want it.