How to Save Money by Buying Gift Cards Online

May 5, 2010 by Jim

arm1.static.flickr.com/121/274310388_f9f630f027_m.jpg" class="r" alt="Starbucks Gift Card">Whenever I buy something online, I look to try to reduce the price of the item as much as possible. As a consumer, there are a variety of tools you can use to be a savvier shopper. Most consumers know to use a credit card with at least 1% cash back to reduce the price a small bit. Others shop online to avoid sales tax.

However, one trick I’ve used lately is buying store gift cards on the second hand market. If you’ve seen gift card industry statistics, they’re astonishing. There are billions of dollars lost each year in gift card value and several startups have stepped into the space because they sense an opportunity. The online buying and selling of gift cards is growing and that means opportunity not only for these startups, but savvy consumers.

How This Works

You can buy gift cards online for less than the face value of the card, which means more savings at the register or checkout screen. For example, with Mother’s Day right around the corner, you’re probably thinking about buying Mom some flowers. If you’ve been scoping out the various flower deals, perhaps you’ve settled on a bouquet from 1-800-Flowers. You’ve scoped out the coupons, you’ve checked all the partnership websites giving a small percentage off if you buy through their affiliate link, and now you want a little extra edge.

Buy a gift card online. It’s treated like any other form of payment, plus you can buy it with a credit card and still get the cashback! (incidentally, you can buy 1-800-Flowers gift cards online for 25%-30% off!)

Where to Buy Gift Cards

If you want to buy some gift cards, you have two options:

  • eBay – I’m always hesitant to use eBay because I’m always worried about being scammed. There’s something about buying hundreds or thousands of gift card dollars that makes me a little uneasy. There are plenty of people who have had no problem buying gift cards on eBay, I’m simply not one of them.
  • Gift card marketplaces – The two big ones I’ve heard about are Cardpool and Plastic Jungle, though there are certainly a lot of players in the space. I trust these places more than eBay because they’re larger businesses with funding, rather than individuals.

It’s important that you shop around and find the ones that offer the best deals and selection for the store you’re interested in. For example, Card Pool can save you 14% on a Bath & Body Works gift card but only has a $122.89 card available. Plastic Jungle’s best discount is 13% but you have the choice between a variety of values, one as little as $50. If you only need $50 of value, it makes little sense to buy the $122.89 card just to get an extra percent of savings.

So you get 1% cashback when you buy the Bath & Body Works gift card, you get a 13-14% discount on the face value of the card, plus whatever coupons and discounts you can wrangle from other partners.

So the next time you are going to buy something, consider buying a gift card first.

Have you done this before? If so, any additional tips for squeezing out a little more savings?

(Photo: rahims)

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