Are your unused gift cards gathering dust? You may be able to exchange those cards for cash.
Gift cards are among the most popular gifts during the winter holiday season: 44% of consumers planned to give one as a gift in 2023, ranking second only to clothing, 56%, according to the National Retail Federation.
Many Americans don’t use their cards. To that point, 47% of U.S. adults have at least one unused card, according to a 2023 Bankrate survey. Nationwide, those unused balances are worth $23 billion, the report found.
Their average value is $187 a person — a 61% increase from $116 in June 2021, Bankrate found.
However, certain websites let consumers sell their unused cards for money.
“Consumers certainly don’t need to leave these gift cards unused in a drawer somewhere,” said John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League.
These websites have a few different financial models, which pay consumers less than the face value of their card. Some vendors pay a percentage of a card’s value, with amounts varying by retailer, while others are like an eBay for gift cards, for example, Breyault said.
Examples include Raise.com, CardCash.com and GiftCash.com, said Ted Jenkin, a certified financial planner based in Atlanta and a member of CNBC’s Advisor Council.
One “detriment” of holiday gift cards is that recipients are generally inclined to spend more than a card’s value while shopping, Jenkin said. A $100 card might turn into a $118 total purchase, for example, he said.
More from Personal Finance:
Why workers’ raises are smaller in 2024 — and may not go up from here
56 million Americans have been in credit card debt for at least a year
Tips to make your New Year’s money resolutions stick
That’s among the reasons retailers heavily market gift cards.
They drive additional sales, Breyault said. The global gift card market is expected to be $2.3 trillion by 2030, up from about $899 billion in 2022, according to Global Industry Analysts.
Recipients can instead trade in a gift card to help pay down household debt or build up an emergency cash reserve, Jenkin said.
Some cards “have very little value and some have a lot more value,” so consumers should do some comparison shopping on websites to scout the best deal, Jenkin added.
How to avoid gift card sale scams
Breyault advised against using Facebook Marketplace or Craigslist to sell — or buy — gift cards. He has seen “a lot of reports” of fraud via these sites whereby consumers have been duped.
For other sites, some due diligence is advised before transacting, Breyault said. For example, check with the Better Business Bureau to see if consumers have lodged complaints about a particular service.
Something as simple as doing a Google search for the name of the site and the word “scam” can also be useful, he said.
Consumers can also look for a customer service phone number for a site and inspect whether it works. A disconnected number or full voicemail inbox is often a red flag, Breyault said.
There are options beyond selling an unused card, too, such as donating gift cards to charity or even regifting them, he added.
Additionally, about a dozen states have laws that require retailers to pay cash back to consumers who have partially used their gift cards. Card balances must fall below a certain financial threshold, and some restrictions may apply. Most states require this for card balances of about $5 or less, while California, the most generous state, does so for cards of $9.99 or less.
Don’t miss these stories from CNBC PRO:
- There’s one stock Wall Street loves so much for 2024 that five analysts in one day picked it as their favorite
- Morgan Stanley names its top stocks for 2024, including this streaming giant
- Investing tips from Warren Buffett to start the new year on the right foot
- Goldman sees a 50% gain ahead for this Chinese electric vehicle stock, initiates with buy rating
- ‘Twice as cheap’: These stocks’ discount to the S&P 500 is double its average, Ritholtz’s Brown says