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Tips on Gift Cards (Our Favorite Last-Minute Gift)

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After months of shopping including big sale days like Black Friday and Cyber Monday, hopefully you’ve managed to cover everyone on your list. But what about the person who got overlooked, or decided to join for the holidays last-minute? The idea of spending hours browsing the shelves of a crowded store for one last gift just doesn’t sound like much fun anymore (or ever).

When this happens—and it happens to the best of us!—a common solution is to reach for a gift card. They’re easy to buy and practically guarantee that your recipient will get the item(s) they want in the end. Nearly everyone offers gift cards for sale so you can pick a store or restaurant that you know the person will like, or buy an elegantly-packaged prepaid card (like MasterCard, American Express, Visa, etc.) that offers the flexibility of cash.

Best of all, here’s the LOZO on gift cards: you can often buy them at a discount! So this season whether you’re giving or receiving gift cards or gift certificates, here are some tips to keep in mind:

For the Givers: Tips on Buying Gift Cards
  • Buy Gift Cards at a Discount: Just as with any purchase, do some comparison shopping to make sure you’ve got the best deal. For example, Costco sells a variety of gift cards in store and online at a 20-40% discount. Employee perks programs, local fitness centers and other membership programs sometimes offer similar discounts. You might pay $80 or less for a card with a value of $100! Try Plastic Jungle for a variety of cards at a discount if you can’t find it elsewhere.
  • Get Free Bonus Gift Cards: During the holidays, it’s not uncommon to see local restaurants and other stores selling gift cards or certificates that come with a bonus free card. For example, Friendly’s restaurants offer a free $5 bonus with a $25 gift card purchase. This is a great chance to pickup two gifts for the price of one, or even to stock up for yourself: when you go to redeem the cards you can still stack them with coupons for even bigger savings.
  • Avoid Fees on Prepaid Gift Cards: Most prepaid gift cards charge a fee whether you’re buying them from a retailer, a bank or directly from the credit card company that issues it. Fees tend to be lowest when you purchase from the credit card company or bank directly. In some cases, you might even be able to get the fee waived. Your chances will be best if you have a pre-existing relationship with the provider or bank. For example, as of 12/20/10, Chase waives the fee for their Visa gift cards if you have a Premier checking account or better.
  • Avoid Shipping Fees: If you’re buying online, try to avoid shipping fees by selecting “in-store pick-up” or opting for an online or e-gift certificate that can be emailed rather than shipped.
For the Gift-ees: Tips on Using Gift Cards
  • Use Gift Cards like Money: Although it may be tempting to make an impulse purchase with your gift card, remember that you’ll get more value from it if you use it during a great sale or apply a coupon to your purchase (provided there aren’t any restrictions about coupons). Why not stretch those “free” dollars so you can get even more bang for your buck? Think of your cards as real money and you’ll avoid wasting them on something you don’t really need. You can always sell them for cash as well (albeit at a 10-30% discount) at sites like Plastic Jungle.
  • Spend Every Last Penny: Oddly, even though prepaid cards offer the most freedom (in that you can use them to shop at multiple venues) they can also come with some annoying restrictions. The most common is when they require you to spend the exact amount that’s been issued on the card. For example, if you have a $6.76 balance on your prepaid card and want to make a $10 purchase, you'll have to try to split the bill into a $6.76 charge (pay by prepaid card) and a $3.24 charge (pay by another card). This can make it difficult to spend the full amount. In cases like this, we recommend using the card to buy gas or to put the credit on Amazon where you can add it to your account to apply to any purchase (even better: there’s no expiration date!).
Happy Holidays and happy last-minute shopping!

As of 12/22/10, here are a handful of great Gift Card deals available at national chains ("GC" = "gift card"). Check stores in your local area for more deals!
  • AMC Movies (in theaters): $10 Concession card with $50 GC purchase
  • Children's Place $10 eGift card bonus for $40 EGC purchase
  • Friendly's (in restaurants): $5 bonus card with $25 GC purchase
  • OfficeMax $10 bonus rewards with $50 GC purchase
  • Outback Steakhouse $20 bonus card with $100 GC purchase
  • $25 certificate for $2 with code HOLIDAY
  • RiteAid (in store coupon): $5 off $25 iTunes Gift Card

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