How to Buy Discount Gift Cards

You can save money by purchasing gift cards for less than face value online.

Here’s a simple way to save money: Buy discount gift cards. That’s right, you can get gift cards to retailers and restaurants for less than face value, then give them as gifts or use them yourself when you shop or dine out.

"Most people still don’t know about discount gift cards," says Luke Knowles, founder of Gift Card Granny. "So just sharing with people that discount gift cards exist is a gift in itself."

Gift Card Granny does the comparison-shopping for you by aggregating prices from several resellers of discount gift cards. You can start there or CardHub.com to find out which discount card marketplace is offering the best deal on the gift cards you want. Alternatively, go directly to Web sites such as CardCash, Cardpool, GiftCards.com or Raise to find discount gift cards. Before you visit any of these sites, though, here’s what you need to know about buying – and giving – discount gift cards.

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Discounts vary. You can buy gift cards for hundreds of national retailers at a discount because these sites buy the cards for less than face value from consumers who don’t want them. How much a card is discounted depends on supply and demand. The cards that are in least demand have the best discounts, Knowles says. Discounts also are deeper on cards that are plentiful. For example, the average discount on gift cards for restaurants, movie theaters, sporting goods stores and shoe retailers is at least 10%, he says. But the discounts can be much higher. We recently found a $16 Carmike Cinemas gift card selling for $12.50 (a 22% discount) on Raise and a $25 Buca Di Beppo gift card selling for $20 (a 20% discount) on Cardpool. Clothing and department store gift cards are typically discounted 7% to 8%. The average discount for in-demand gas, grocery and electronics gift cards is less than 5%, Knowles says. Gift cards for big-box retailers such as Target and Walmart also have smaller discounts. Discounts also can vary by reseller, so it’s important to compare prices at a several sites.

The cards may have been used. Knowles says that most people who buy discount gift cards buy them for their own use. But if you plan to buy one to give as a gift, be aware that some cards show obvious signs of wear and tear because they have been used (but have funds remaining on them). To increase your chance of getting an unused card, Knowles recommends purchasing one with a face value that’s common for new cards – such as $10, $25 or $50 – rather than one with an odd value. If a gift card is being sold with a value such as $17.50 or $79, that’s a good indication that the card has been used. You also might have luck trading in used gift cards for new ones at the retailers that issued the cards, says Jill Gonzalez, a spokesperson for CardHub.com. Warehouse clubs such as BJ's Wholesale, Costco and Sam's Club sell new gift cards at a discount, but the selection is much more limited than what you'll find online.

You might get a code rather than an actual card. Many discount gift cards are available only as electronic codes rather than physical cards. You’ll receive an email with the gift card code, which can be used for online purchases or purchases in stores if you print out the code or show the code to a store clerk on your mobile device. If you want to give an e-gift card, you can have the code emailed to you, then get creative about how you present it to the recipient by putting it in a frame or getting inspiration from a site such as Pinterest, Knowles says.

Stick with trusted sellers. You may find better discounts on gift cards being sold by individuals on Facebook or on auction sites, but you’re taking a risk, says Shelley Hunter, a spokeperson for GiftCards.com. If you’re duped into buying a card with no funds left on it, it could be harder to get a refund from an individual than from an established business. To avoid potential hassles go with trusted gift card resellers (such as the ones listed above) that vet all the cards they buy for resale, provide guarantees if something goes wrong and offer customer support.

Don’t wait until the last minute to buy. Discount gift cards purchased online can take several days to ship (shipping usually is free), so take this into consideration if you plan to give them as gifts. Also, gift card resellers won’t ship to an address other than the billing address you use when purchasing a card, Knowles says. So if the card is going to a friend or family member who lives far away, budget enough time to receive the card and then mail it to the recipient. Even e-gift cards can take up to 48 hours to receive if you’re purchasing one for the first time. Resellers typically will contact you to verify billing and shipping information to avoid fraud before emailing you a code, Knowles says.

Cameron Huddleston
Former Online Editor, Kiplinger.com

Award-winning journalist, speaker, family finance expert, and author of Mom and Dad, We Need to Talk.

Cameron Huddleston wrote the daily "Kip Tips" column for Kiplinger.com. She joined Kiplinger in 2001 after graduating from American University with an MA in economic journalism.