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Are your unused gift cards sitting on dust? You can exchange these cards for cash.
Gift cards are among the most popular gifts during the winter holiday season: 44% of consumers planned to give one as a gift in 2023, second only to apparel at 56%, according to the National Retail Federation.
Many Americans don’t use their cards. According to a 2023 Bankrate survey, 47% of US adults have at least one unused card. Nationwide, those unused balances are worth $23 billion, the report said.
Their average value is $187 per person — a 61% increase from $116 in June 2021, Bankrate found.
However, some websites allow consumers to sell their unused cards for cash.
“Consumers absolutely do not need to leave these gift cards unused in a drawer,” said John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League.
These websites have several different financial models that pay consumers less than the face value of their card. Some sellers pay a percentage of the card’s value, with amounts varying by seller, while others are like eBay for gift cards, Breyault said.
Examples include Raise.com, CardCash.com and GiftCash.com, said Ted Jenkin, an Atlanta-based certified financial planner and member of CNBC’s Board of Advisors.
One “disadvantage” of Christmas gift cards is that recipients generally tend to spend more than the value of the card when shopping, Jenkin said. For example, a $100 card can turn into a total purchase of $118, he said.
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This is one of the reasons why retailers are heavily selling gift cards.
They drive additional sales, Breyault said. According to Global Industry Analysts, the global gift card market is expected to reach $2.3 trillion by 2030, up from $899 billion in 2022.
Recipients can instead redeem a gift card to help pay off household debt or build an emergency cash reserve, Jenkin said.
Some cards “have very little value and some have a lot more value,” so consumers should comparison shop on websites to find the best deal, Jenkins added.
How to Avoid Gift Card Scams
Breyault advises against using Facebook Marketplace or Craigslist to sell — or buy — gift cards. He has seen “a lot of reports” of scams through these sites where consumers have been defrauded.
With other sites, some due diligence is recommended before a transaction, Breyault said. For example, check with the Better Business Bureau to see if consumers have filed complaints about a particular service.
Something as simple as searching for the website name and the word “scam” on Google can also be helpful, he said.
Consumers can also look up the customer service phone number for the website to check if it is working. A disconnected number or a full voicemail box is often a red flag, Breyault said.
In addition to selling an unused card, there are other options, such as donating gift cards to charity or even exchanging them, he added.
Additionally, about a dozen states have laws that require retailers to give cash back to consumers who have partially used their gift cards. Card balances must fall below a certain financial threshold and certain restrictions may apply. Most states require it for card balances around $5 or less, while California, the most generous state, does so for cards with a value of $9.99 or less.
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