How many of you purchased or received a gift card for Christmas? At our house there is usually a few gift cards that are given. I love to give Starbucks cards to a few of my grown kids. The National Retail statistics show that gift cards top the list for the eighth year in a row, and gift card purchases in 2014 will beat all previous records, reaching nearly $32 billion. The most popular gift card purchases this year are for department stores, second is restaurants, then coffee shops, entertainment and electronics.
Gift cards are the one stop fits all type of gift. They are never returned because they don’t fit or the color is wrong. In reality, they are like you just gave the recipient “cash”! Stores are extremely happy if you purchase a gift card. The retailers know that gift cards are a money-maker for them. It brings new and old customers in the door and encourages shoppers to spend. Once customers are in the door with gift cards in-hand, about half of them will spend more than the card is worth. What’s more, many customers never use their gift cards at all. When a retailer collects money right away and issues a store credit that is never exchanged for goods, this is profit for the business.
If you received a gift card this holiday season, here are a couple of tips on how to make the most of them and avoid the spending trap:
Use them right away so they don’t get tucked away in your wallet somewhere and you forget about them. Some will charge you fees so use your cards right away to make sure you get every penny of credit you deserve.
If you received small gift cards, that are not Starbucks, ($5.00 or $10.00), it is almost impossible to just spend that little without overspending. Turn your small-dollar gift cards in for something better to avoid overspending. Sites like Cardpool.com and CardCash.com allow consumers to sell their gift cards for cash or trade them with others. We have one of these machines at our local Safeway store, check where the nearest location for you may be.
I hope that everyone had a fabulous Christmas!