The holidays are over. The presents are unwrapped. And you have a pile of gift cards that you may never use.
You’re not alone. According to CEB TowerGroup, nearly $1 billion in gift cards go unused each year.
Good news for retailers. Bad news for you.
So, what can you do if you want to convert an unused gift card to cash?
Access the gift card aftermarket where sellers can unload unwanted gift cards and buyers can scoop them up at a discount.
Supply and demand drives the dollar amount of the discount offered, but both buyers and sellers are acquiring or disposing of the gift card below face value.
Gift cards can be found across most major retail categories, including department stores, restaurants, home and garden, hotels and travel, health and beauty, clothing and toys.
If you are looking to cash in your gift cards, here are a few options to navigate the $130 billion gift card market:
1. Cardpool.
Cardpool buys unused gift cards in exchange for cash or a gift card to another retailer. You will receive a dollar amount less than the face value of the gift card – up to 92% cash back – and then Cardpool will resell the gift card at a premium to the price Cardpool paid you, but still at a discount to the gift card’s face value. Cardpool’s most popular gift card brands include Macy’s, Best Buy, Home Depot, Victoria Secret, Kmart, Hyatt and others, which are sold at a 3-7% discount to face value.
2. CardCash
CardCash is the largest gift card exchange. CardCash sells gift cards at a discount up to 35% and buys gift cards up to 92% of face value. The Top 5 selling gift cards at Card Cash are Walmart, Target, Home Depot, Lowes and TJ Maxx. In 2013, CardCash raised $6 million in funding from Guggenheim. In 2014, CardCash acquired its largest competitor, Plastic Jungle. CardCash also has agreements for gift card exchange with Walmart, Amazon, CVS and United Airlines.
3. Gift Card Granny
With over 350,000 discount gift cards across over 1,000 retailers and restaurants, Gift Card Granny is one of the largest discount gift card providers. Gift Card Granny, which allows users to buy and sell gift cards at a discount to face value, says it receives 12 million visitors each year. In 2016, Gift Card Granny’s best selling gift cards were Amazon, Best Buy, iTunes, Target and Walmart.
4. Card Kangaroo
Card Kangaroo offers discounts up to 35% when you buy gift cards, and offers up to 92% of face value when you sell or trade gift cards. The company sends a check or a PayPal transfer within 24 hours.
5. Raise
Raise is an online gift card marketplace. Like OfferUp, EBay or Craigslist, users set their own prices to sell gift cards.
6. Coinstar Exchange Kiosk
The maker of Coinstar kiosks (which convert coins to cash) and RedBox (DVD rental kiosks) now offers a kiosk to sell your gift cards for cash. Coinstar Exchange accepts gift cards from over 150 leading national retailers and restaurants, including Crate & Barrel, Hewlett Packard, Petco, Marriott, Gap, Walmart and others. While you need to visit the kiosk to convert a gift card to cash, the kiosk will pay you immediately (rather than waiting for a check or money transfer).
Other Gift Card Resources
There are numerous other gift card apps that compete in the gift card space:
- Gyft: buy, send and redeem gift cards
- Giftcards.com: make your own gift cards
- E-gifter: purchase and send a gift card from a group of people
- Giftagram: gift-giving of curated gifts
- Elfster: gift exchanges
- Slide: organizes gift cards
The good news is that spillage, or unused gift card volume, has declined over the past 9 years from 7% to less than 1% of the gift card market.
The bad news is that fraud may be on the rise. That seems counterintuitive as major credit and debit cards shift to more secure chip readers. However, many low-cost gift cards will not migrate to chip readers and still rely on more vulnerable magnetic strip technology, which is considered less secure and prone to fraud.
Before using a gift card app or website, you should check the gift card balance to save time. You can call the phone number on the back of the gift card, or use Cardpool, Gift Card Granny or Raise, for example, all of which have gift card balance checkers.
CEB TowerGroup expects electronic gift cards to reach $18 billion in sales by 2018, driven by payment offerings from Apple and Chase as well as money transfer services such as Venmo and PopMoney.
Zack Friedman is the founder of Make Lemonade, a personal finance platform that offers free and unbiased financial advice, including to the over 40 million borrowers looking to manage, repay and save money on their student loans. Follow Zack on Twitter and read his columns in Forbes.
