As much as people might like to think otherwise, the odds are pretty good that someone won’t use the gift card you tuck in a stocking.
What if you just toss it somewhere? One survey showed that American homes on average have $300 in gift cards sitting unused, said Margaret Mackenzie, CEO of Plastic Jungle, a California-based company that buys and sells unused gift cards online.
The bright plastic is easy to give to teachers, teens, spouses and friends. In 2012, consumers are expected to put $110 billion on gift cards — up 10 percent from last year. That includes electronic cards, cards for restaurants, stores and all-purpose cards that can be used anywhere that accepts plastic, according to CEB TowerGroup’s gift card report.
But what card will someone actually use? There’s the trick. For young college students, gas cards could be a real ticket. What about your spouse?
About 81 percent of shoppers will buy at least one gift card this season, according to the National Retail Federation’s 2012 holiday consumer spending survey. Consumers will spend about $29 billion or an average $156.86 on gift cards. All that can explain why we’re seeing deals:
• Spend $20 on gift cards at participating Taco Bell restaurants and receive one free item up to $5 on its menu. The offer is good through Dec. 25.
• California Pizza Kitchen is offering a $20 reward card when shoppers spend $100 in gift cards through Dec. 24.
• Some retailers, including Target, offer complimentary gift card rewards when consumers buy specific items.
“Retailers have to compete with all the other promotions this time of the year,” said Steve Hoch, professor of marketing at the Wharton School at the University of Pennsylvania.
The closer the calendar moves toward Christmas, he said, some retailers could offer fewer gift card promotions.
It might seem a little crazy during a tight economy to have $300 or so sitting unused in gift cards. But experts say you have to realize that some of those gift cards could be for stores that aren’t in a given area — say, buying a Cheesecake Factory card for someone who lives in an area that doesn’t have one.
Or maybe someone returned an item to a store and the refund was loaded onto the gift card and they can’t find something that fits them in that store.
And some might not be motivated to use $3 or $4 that’s left on a gift card, either, after buying some items with the card.
Mackenzie, of the Plastic Jungle, said the holiday season is huge for online gift card trading exchanges, too.
Late in November, the Plastic Jungle site offered a $50 Applebee’s card priced at $43 or a 14 percent discount, a $500 Ralph Lauren card priced at $455 or a 9 percent discount, and $250 Neiman Marcus card priced at $237.50 or a 5 percent discount.
Some offerings at the site are for electronic gift cards that might only be usable online.
One risk of buying gift cards through any of a handful of online exchanges is that the card could be a fraud. Who wants to buy a $50 gift card that only has $8.24 of value left on the card?
Selling gift cards
While Plastic Jungle has an A rating with the Better Business Bureau, some consumers have complained that when they receive gift cards and try to redeem them, the balance is much lower than agreed upon or at a zero balance.
Other complaints state that consumers selling gift cards are promised payment within several days, but they do not receive it.
For some consumers, the best gift card value could be buying the right card.
“Make sure you know where the recipient likes to shop,” said Janna Herron, an analyst at Bankrate.com who researched gift card fees and rules.
It’s possible to buy all purpose-gift cards, too, through banks and credit unions. But those cards can come with higher fees, too.
You’re more likely to be charged $2.95 to $6.95 upfront to buy all-purpose gift cards issued by banks and credit-card companies, according to the Bankrate.com survey.
The Credit Card Accountability Responsibility and Disclosure Act of 2009 put severe limits on expiration dates and junk fees for some cards.
Yet all fees did not vanish.
About 9 percent of 55 widely held store-branded gift cards surveyed by Bankrate.com charged an upfront fee to buy the card.
For example, Toy R Us charges $1.95 if you buy a gift card online; there is no such fee at the store. Electronic gift cards are sold online with no fee, too.
Beware as well that about 75 percent of the gift cards sold via banks and credit cards charge a fee of up to $3 a month if the card is not used for 12 months or more, the survey noted.
Cash, it would seem, can still look quite lovely wrapped in a red velvet ribbon.