Or worse: we buy each other gift cards. Prepaid gift cards are a favorite among those who “get it.” If you wanted something, you would’ve bought it yourself, right? So, here’s a gift card. Go nuts. I wash my hands of whatever purchasing decision you make. To the gift giver, it’s a little bit better than handing someone a wad of cash. For the recipient, it’s a little bit worse. Now, you’re tied into buying something from that particular retailer, preferably for that specific amount. There’s nothing worse than having a $1.24 balance on a Best Buy gift card. It usually means I end up forcing myself to buy something overpriced there that I don’t really need. As you probably suspected, billions of dollars of unused gift card balance stay on the books every year. It doesn’t help consumers, and it doesn’t help retailers either (they have to keep track and report it as liabilities on their balance sheet). And don’t get me started on prepaid debit cards from the likes of Visa, MasterCard, Chase, etc. and their monthly maintenance fees. It’s like gifting someone a leaky bucket of quarters. “For every month you don’t spend this, you lose money!” Yeah, gift cards are a drag. So, this year, don’t buy gift cards for your friends, family, and coworkers. Treat the one you really love. That’s right, buy gift cards for yourself.
How to Launder Gift Cards for Fun and Profit
If you are clever, you can use gift cards to make a slight profit. How? Buying gift cards for yourself and using them immediately. In this way, you can reap the benefits of any promotions—like cash back rewards on your credit card or grocery store fuel discounts—while paying for things you were already going to spend money on.
You can even buy yourself gift cards for things you don’t need to pay for now but will use later. For example, I’ve subscribed to Netflix for years already, but I still gifted myself some Netflix credit to get the Giant Eagle GetGo FuelPerks. I bought the gift card online; they emailed me the redemption code, I logged into Netflix and applied the balance to my account. (Click your profile, then Your Account then scroll down to Gifts & Offers.)
And because I bought this with my credit card, I earned points on that, too. I was already paid up on my Netflix account, so the gift card balance will just go toward my future bills.
All this took me less than five minutes.
Cash in Prepaid Debit Cards for Gift Cards that Don’t Have Fees
This trick works if you are the unfortunate recipient of a prepaid debit card, too.
You can do this for other services that you use a lot, too, like iTunes or Starbucks. There’s really no excuse to let prepaid debit cards linger.
Conclusion
Is it illegal? Is it unethical? After all, this isn’t what the card issuers and retailers intended. To that, I say, eh, not really. Think of all the ways that credit card companies and banks try to trick us on a daily basis with their adjustable interest rates, introductory credit card rates, confusing terms, and those deathly “superchecks” for your credit card account with astronomical interest rates. If you save a few bucks here and there while zeroing out inefficient gift card balances, then I think there’s no harm done. It’s not like you’re getting free flights by buying skids of pudding. And if the retailers find that they are losing money with gift cards (and I don’t think they are…), then maybe they’ll do us all a favor and put an end to them altogether. Got a gift card tip? Share it in the comments below. Comment Name * Email *
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