Use ’em or lose ’em: How to make the most of all those gift cards

Personal finance

The hottest gift of the season could also be the least used.

For the 12th year running, gift cards remain the most popular items on wish lists, according to the National Retail Federation’s annual holiday report.

Gift cards topped all other potential presents, including jewelry, clothing, books, movies, music, electronics and sporting goods. The NRF polled more than 7,000 adults in October. The survey has a margin of error of 1.2 percentage points.

Altogether, Americans are expected to spend close to $30 billion on gift cards alone this holiday season, buying four cards, on average, with each worth about $49, the NRF also found.

However, many of those cards will end up either unused or hawked online.

Enter gift card exchanges. Sites such as Cardpool and Raise help you trade in those unwanted cards for cash.

Despite gift cards being the most desired Christmas and holiday present year after year, Dec. 26 is, according to Cardpool, typically the company’s single busiest day of the year for unloading unused cards.

The problem arises when recipients don’t get the exact gift card they wanted, said Mike Jack, the general manager of Cardpool.

The resale value can vary dramatically but generally ranges from below 70 percent to over 90 percent, depending on the popularity of the card and its availability.

“Every merchant has its own supply and demand,” Jack said.

Some of the most valuable cards include iTunes, Starbucks, Target and Walmart, according to Cardpool. (Alternatively, savvy shoppers can score the gift cards they desire at steep discounts through the same online marketplaces.)

As for making the most of the ones you plan to hold on to, Consumer Reports offers these tips:

Use ’em or lose ’em. Almost $1 billion in gift-card value was left unspent in 2015, according to the latest data from the market research firm CEB.

The biggest mistake many people make is to put their cards in a drawer and forget about them. Instead, keep them handy in your wallet or purse so you have quick and easy access when you are out shopping.

Keep in mind that gift cards do eventually expire, generally after five years, or you could get hit with an inactivity fee after one year.

Reduce your risk. The Federal Trade Commission warns that some issuers won’t replace lost or stolen gift cards while others will — for another fee.

Gift-card givers should give recipients the original purchase receipt along with the card, the FTC advises. If the card is lost or stolen, some issuers will require the receipt as proof of purchase to provide a replacement card with whatever balance is remaining. Additionally, promptly report a lost or stolen card to ensure you recoup the entire value or whatever is left.

And, of course, be wary of gift cards from retailers in or nearing bankruptcy.

Spend every penny. After you’ve used some of the value on a gift card, you can liquidate small unspent balances by requesting a “split tender” payment the next time you shop at that retailer. First, pay with the gift card to use up the balance, and then pay the rest with cash or a credit or debit card.

Some states give consumers another option: In California, for example, gift cards with less than $10 left on them are redeemable for cash; in Colorado you can get cash for gift cards with less than a $5 remaining balance. Find your state’s gift-card laws on the National Conference of State Legislatures website.

“On the Money” airs on CNBC Saturdays at 5:30 a.m. ET, or check listings for air times in local markets.

More from Personal Finance:
How to make sure a balance-transfer card will help you pay down your debt
3 steps to keeping your resolutions to spend less, save more
Employees spend nearly 2 hours a day shopping online at work: Study

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