Donna’s Deals: 7 Tips to Purchasing Gift Cards

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With 41% of people saying gift cards are what they want most this holiday season, Wallet Hub just released these tips on getting the best gift card. And if you want to know which are the most popular gift cards, Wallet Hub says the top five gift cards are Amazon, Visa, Walmart, iTunes, and American Express.

1. Look For A Discount. You might assume that sales and savings don’t apply to the gift card market, since gift cards are more like currency than retail products with traditional product margins. That’s not the case, however, as the best gift cards can all be bought for less than face value.

2. Avoid Card-Network Gift Cards. Gift cards from Visa, Mastercard and Discover might seem like they’re as good as cash, since they can be used anywhere, but they’re actually quite inferior. While retailers make money immediately when one of their gift cards gets purchased, these card-network gift cards make money from fees. There’s generally a fee of at least $3.95 when you purchase such a gift card, followed by a $2.50 monthly inactivity fee if the card isn’t used for 12 consecutive months.

3. Don’t Confuse Gift Cards & Prepaid Cards. Despite often being displayed next to each other in stores, gift cards and prepaid cards are very different animals. Gift cards are designed to be used only until the original balance is gone. Prepaid cards, on the other hand, are reloadable and designed to serve the same purpose as a checking account with a debit card.

4. Beware Loyalty Cards. A loophole in the law 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.

5. Resale Is Always An Option. If you don’t end up using a particular gift card or the recipient doesn’t like it, you’re not out of luck. You can sell it on a gift card exchange or simply swap gift cards with a friend or family member.

6. Buy Gift Cards With Rewards. Most credit card rewards programs allow you to redeem your points/miles for gift cards from a wide variety of major retailers. In many cases, you can garner more value from this type of redemption strategy than redeeming for cash. For example, under Citibank’s rewards program, you need 10,000 ThankYou points to get $50 in cash back, whereas you only need 5,000 points (50% fewer) for a $50 gift card.

7. E-Gift Cards Are Great In A Time Crunch. E-gift cards have been gaining traction in recent years, and increased mobile functionality stands to foster greater use of such products this holiday season. That’s good news for time-crunched shoppers who want to avoid the shipping fees that many major retailers charge for physical gift cards ordered online.

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