Gift Cards 101: The smart ways to buy, sell, and use them

• Know the rules, then use them fast: Balances last 5 years; inactivity fees after 12 months; some states cash out small leftovers (e.g., CA <$10)
• Buy low, sell smart: Warehouse clubs = easy 20% off; sell via eBay for max value or Raise/CardCash for quick cash
• Add cards to your phone, photo front/back + receipt, set 30/60-day reminders, spend risky retailers quickly, and zero out prepaid balances by buying an Amazon e-gift for the exact amount

Americans buy billions of dollars’ worth of gift cards every year and then a shocking amount sits unused in wallets and junk drawers. A whopping $244 per person on average according to a Bankrate survey.

It's time to fix that. Here’s a no-nonsense gift card playbook including tips to make them easier to use, how to buy cards at a discount, where to sell the duds, and how to keep from losing them.

First, the gift card rules worth knowing

Expiration: By federal law, the money on most gift cards can’t expire for at least five years. If there's a date on the card and it “expires,” you’re entitled to a free replacement from the store or brand with your remaining balance.

Fees: Dormancy/inactivity fees generally can’t hit until 12 months of no use and even then, only once per month and only if they've warned you about this ahead of time.

Small leftover balances: Some states let you cash out smaller balances. For example, California requires cash back on most store cards under $10. Ask at the customer service desk if this is an option in your state.

What this means for you: My general rule of thumb is to use cards sooner rather than later and thereby avoid store closures, policy changes, and plain old forgetfulness.

The best places to buy gift cards below face value

• Warehouse clubs: Costco, Sam’s Club, and BJ’s regularly sell popular restaurant and entertainment cards at 5%–25% off. I often buy gift cards at Costco as you can buy a 4-pack of $25 gift cards for only $79.99, an easy 20% savings. It’s nice to get the savings up front. If you already have a membership, this is the easiest win.

Reputable online marketplaces:

• Raise - The savings is not as good as a warehouse club, typically in the 3% -15% range. They offer a 90-day money back buyer guarantee which covers you if you buy an inactive card, get an inaccurate balance, or if the wrong card gets mailed to you.
• CardCash - They are similar to Raise, but they only offer a 45-day guarantee on their gift cards. But unlike Raise, they offer they ability to trade an unwanted card for other brands, sometimes giving you a better return than cashing out.

Pro tip: If you don’t like fine print, stick to the warehouse clubs when buying gift cards. If you’re comfortable following a couple of steps, marketplaces have the potential to save you more, just be sure to spend the balance right away.

The best places to sell unwanted gift cards

Have a card you won’t use? Cashing out is better than letting it gather dust.

These four options are worth a strong look:

• eBay – Selling gift cards on eBay has the highest upside if the store or brand is hot and you run an auction or "Buy It Now" at market price. But keep in mind that category restrictions and selling fees do apply.
• GiftCash.com – A very straightforward option: you enter the brand and balance and get back an instant cash offer. If you accept the offer, they'll pay you via ACH or PayPal after verifying the card.
• Raise - You can list and set your price (you’ll pay a fee when it sells). Good for popular brands than move quickly.
• CardCash – They’ll give you a quick quote for cash or trade which is handy. Expect less than face value, but it’s simple process and fast.

Reality check: You won’t get dollar-for-dollar cash back when selling at the above spots. Popular stores fetch more and niche brands fetch less. Still, 75–90% is common enough that it beats losing the whole thing.

Don’t lose them: 5 tips that actually work

1. Add it to your phone right away. Many store and Apple Account cards can be redeemed/managed right in Wallet; follow the on-screen “Redeem” steps and it’ll live on your phone until you need it.

2. Photograph everything. Front, back, and the receipt. If a balance ever goes missing, you'll be able to use those photos as evidence with the issuer or marketplace.

3. Set a “use-it” reminder. Tell your phone to remind you in 30 days and again in 60 days. If you haven’t used the gift card by then, plan a shopping trip or sell it.

4. Register the card if the brand allows it. Registration can help if the card is lost or if there’s suspicious activity. (Not every brand offers this, but check.)

5. Spend store-specific cards quickly if you see bad news. If a retailer is rumored to be closing or restructuring, don’t wait, use it SAP. Whether gift cards get honored can depend on a court’s decision so spend it quickly.

Use-it-soon strategies (so the value doesn’t vanish)

Attach the card to a real errand. For example, if you have a restaurant card in your wallet, put a lunch on the calendar this week. Have a Home Depot or Lowe’s gift card? Buy the air filters and light bulbs you’re going to need anyway.

Keep track of your balance and split it smartly. For example, tell the cashier, “Please put $X on this gift card and the rest on my credit card.” That zeros out the card so you’re not stuck with $2.17 forever.

Know your state’s cash-out rule. In some places you can ask for cash back on small leftovers (e.g., under $10 in California, under $5 in Oregon and Washington). It’s worth a quick ask at customer service.

Smart way to use a remaining balance on a prepaid card

Chances are there’s a mostly-spent prepaid Visa/Mastercard cash card in your wallet and you’re not sure what to do with the leftovers.

Turn it into cash to spend on Amazon, right down to the last cent.

Here’s what you do, find the exact remaining balance, then buy an Amazon gift card for that amount and add it to your account. Then you can toss the prepaid card knowing you’ve accounted for every cent.

Here are the exact steps:

1. On Amazon, buy an e-gift card for yourself - Go to Gift Cards → eGift Card (or “Reload your balance”), choose Custom amount, and enter the exact card balance. Set delivery to your own email.
2. Register a billing ZIP (important) - On the card’s website, add your name, address, and ZIP. Amazon runs an address match and unregistered cards often decline.
3. Buy the gift card with the prepaid card only - At checkout, add the prepaid card (as a new credit card) and make sure no other card is selected when paying.
4. Redeem instantly - Open the email you’ll get from Amazon, click Apply to your balance, and you’ve consolidated that odd leftover into your Amazon Gift Card balance.

Pro tip: Avoid trying to split an Amazon order across multiple credit cards. Amazon doesn’t support split tender (gift card + credit card).

How to give a gift card the right way

I have two simple rules when it comes to gifting a gift card along with a couple of niceties:

1. Give a brand they already use. Grocery, gas, pharmacy, Target, Amazon—cards that disappear into everyday spending get used fastest (and are less likely to be lost).
2. Avoid activation-fee traps when possible. Those general-purpose Visa/Mastercard gift cards sometimes charge purchase fees. If you want flexibility, consider a major merchant instead.

What if something goes wrong?

Did your balance disappear on a secondhand card? File a claim with the store or brand and include any evidence you might have like screenshots or receipts showing your previous balance.

Did the retailer suddenly stop accepting cards? If you just bought the gift card on a credit card and the retailer stopped honoring cards (e.g., due to a closure or bankruptcy), ask your card issuer for a chargeback for “goods/services not provided.”