Who Said Giving Gift Cards For Christmas Is Tacky?

What do Americans ask for the most each Christmas season? Not clothes or electronics –the most popular gifts requested are actually gift cards. The demand is so high that a secondary market has emerged: gift card exchange.

Essentially, these markets are online sites that purchase unused/unwanted gift cards from consumers in exchange for cash payouts. They then sell the gift cards they obtain for discounted prices. You can typically get up to 75% of the value in cash for the piece plastic that’s been sitting in your drawer since last year. So using gift card exchange sites can be a helpful method to stretch your holiday budget.  Especially for cash strapped college students. Here are a few tips:

Make sure you use reputable websites. Well known gift card exchange sites often have the best deals on cards and offer services like free shipping and money-back guarantees. Using reputable sites also reduces the potential for gift card fraud drastically. Markets such as CardPool.com, CardCash.com, and GiftCardGranny.com are safe bets. Avoid injury by avoiding sites such as Craigslist and relatively unknown websites.

Consider going specific vs. general. Yes, it’s usually easiest to go with a Visa or Mastercard prepaid that can be used anywhere, but these cards are also the most expensive – they usually carry an activation fee around $5. On the other hand, gift cards for specific stores usually do not have this fee.

Popular cards give the least bang for your buck. As would be expected, the most popular cards have the smallest discounts on gift card exchange sites. On average, discounts on cards from retailers such as Wal-Mart, Target, and Toys R Us averaged less than 5%. Compare this to cards from Petco, which averaged 16% off, and Cold Stone Creamery, which were discounted by 23%.

Time your purchase for the best deals. Don’t purchase gift cards too early so that the buying protection period doesn’t waste away. A good rule of thumb is to buy cards a week in advance. Also, for the biggest savings, buy gift cards in January. People are bound to receive cards they don’t like, so a few weeks after Christmas is the peak period for exchanges.

Gift card exchanges are new to most people, but by doing a little research you can save a ton of money this holiday season. You can even make money by exchanging a card you were given for a store you never go to. But unfortunately, you still can’t exchange the sweater Grandma knitted for you!