Five Things To Remember About Gift Cards

Last holiday season was the first in which there were new rules in effect for gift cards, making them a bit more consumer-friendly.

The biggest rule change was the end of the “use it or lose it” quality of most gift cards, which would expired if not used in a short period of time. Now, the CARD Act prohibits gift cards from expiring sooner than five years from the date they were issued or money was last loaded.

Since gift cards are likely to be the most sought-after holiday gift, according to the National Retail Federation, there are some things to keep in mind when doing your shopping.

1. Avoid unnecessary fees

While the CARD act did away with some gift card fees, others remain. Generally, the cards with the most fees tend to be the ones issued by credit card companies. These are known as “general purpose” cards and can be used wherever the credit card is accepted.

While that's convenient, stores that sell gift cards are usually a better deal. The deals get better if you search for gift cards that offer free shipping or digital gift cards.

2. Discounts are available

Yes, you can get discounts on gift cards, which is sort of like buying money at a discount. You can save up to 30 percent but the person receiving the gift will just assume you paid full price. You can find more information about discounted cards here.

3. Gift card sellers have to provide more information

The 2011 holiday season is the first in which gift card issuers are required to have transparent disclosures on their cards. This is the second part of the CARD Act rules affecting gift cards. The added information means consumers can feel confident that what they see is what they get.

4. Buy Gift Cards with Credit Card Rewards

Lots of us have credit card rewards that pile up unused. A gift card is a great way to use them. Twenty-eight percent of consumers plan on using credit card rewards to buy presents this holiday season, according to American Express.

This is a particularly useful strategy when it comes to buying gift cards because most credit card companies offer more value with gift card redemption than with cash back. For example, Citi ThankYou Points are 37 percent more valuable when redeemed for gift cards as opposed to cash.

5. Unused gift cards can be cashed in for cash

You probably don't want to give the recipient cash as a present, but if they truly would rather have the greenbacks, it is easily arranged. They can sell unused cards for cash via online gift card exchanges. Even expired cards can be the source of some cash through state programs.