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Don't let gift cards sit; use them or trade them

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By Eileen Ambrose
The Baltimore Sun
  • Carlos Osorio / Associated Press

We want gift cards and like to give them, but for some reason we don't always use them and wind up wasting billions of dollars.
A recent poll by Consumer Reports, for instance, found that one-quarter of people who received a card as a holiday gift last year still haven't used it, and more than half of those had two or more unredeemed cards.
We have lots of excuses. We forgot about the card or lost it. The store didn't have any merchandise we wanted. Or the retailer isn't nearby, or we don't like the store.
This has spawned an online secondary market where gift card exchange sites, such as,, and, help consumers buy and sell unwanted retail gift cards at a discount.
Sellers can get about 70 percent to 90 percent of the value of their cards. The more popular the retailer, the higher the price.
"It at least gives consumers the option to get something for an unused gift card," said Tod Marks, senior editor at Consumer Reports. "It's like life support for unwanted gift cards."
Gift card sales are expected to reach a record $100 billion this year, up nearly 10 percent from the year before, according to TowerGroup, a research and advisory firm. About $2 billion of that, though, will be lost through fees and expired, stolen or misplaced cards.
The losses were much worse before federal protections kicked in last year that, among other things, prevent cards from expiring within the first five years.
Still, $2 billion is a lot of money to leave on the table. And if we don't use it, somebody else will. Here's some advice for getting rid of them:
Don't spend, invest
The most innovative use of unwanted gift cards this season goes to, which caters to small investors by helping them set goals and begin investing for as little as $25.
Between now and the end of January, GoalMine is accepting unwanted gift cards with values of $25 and up that will be sold at, a card exchange site. Consumers decide whether to deposit the proceeds in an FDIC-insured savings account or in a stock or bond mutual fund.
As a further incentive, GoalMine promises to redeem the first card for 150 percent of its value. The card can't be worth more than $50.
Gift card exchanges
These middleman websites for consumers wanting to buy, sell or swap cards have been growing. PlasticJungle, one of the major players, bought and sold cards worth about $18 million last year.
Sites deal in gift cards from hundreds of national retailers, so you likely won't be able to sell a gift card from a local shop. Cards usually must have a value of $20 or $25 still on them.
Sellers send their cards to the exchange, which verifies the value. They can get as much as 92 percent of the value of the card, but that's for the hottest retailers.
Buyers can pick up cards at a discount of up to 35 percent, although the saving is much less on popular cards.
Some sites offer a money-back guarantee if a card's value turns out to be less than promised. That's a big advantage over trying to sell a card on your own through Craigslist.
If you're going to buy or sell on one of the exchange sites, check out more than one. has a gift card exchange feature that aggregates card deals from various sites.
Consumer Reports' Tod Marks, who researched gift card exchanges earlier this year, says no single site gave the best deal every time.
Before buying or selling, read the terms, which also can vary among the sites. And buyers should make sure the site guarantees the cards it sells.
Also buyers should beware of cards with a value that's an odd number -- say, $63.45 -- which could signal that the card was given to a customer as a refund on a purchase, said TowerGroup's Riley. Refund cards, he said, don't have the same legal protections as gift cards.
If in doubt, he said, ask the site if the card is from a refund.
Many of the gift card complaints deal with the merchant going out of business. When that happens, card owners generally stand in line with all the other creditors and may get little or nothing. Try to avoid this by buying cards from healthy retailers.
You can also set up an account with, which sends out email alerts if a retailer appears headed for bankruptcy. ScripSmart also offers a "nag me" alert to remind you to use your gift card.
Story tags » Personal FinanceRetail



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