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Saving money with discounted gift cards

2015 November 24
by Kirk Kosinski

Online and B&M stores often have sales, such as the upcoming Black Friday and Cyber Monday, but what if you can’t wait?  What if you need to buy something immediately?  Or, what if the sale prices aren’t quite low enough for your liking?  Luckily there is another way to score additional savings: discounted gift cards.  This is an excellent way to save a few (or more than a few) extra dollars on your purchases.

Gift cards can often be obtained at a discount to their face value.  If you plan to spend about $50 somewhere, for example, you might be able to buy a gift card for that store for $45.  In this example $5 isn’t much, but the discount can quickly add up, especially for larger purchases.  Large purchases are often a great opportunity to use discounted gift card since you can usually plan ahead, providing enough time to obtain the gift cards.  Other potential purchases are those that are regular and predictable.  Gas and groceries would be perfect, although many credit cards already offer a generous 5% cash back for these.  But sometimes you can find deals on these gift cards, or if you don’t have a credit card with good bonuses you can at least save something.  There are a variety of ways to purchase gift cards at a discount.

This used to be my top choice for buying gift cards.  At one time the selection was consistently excellent and good deals could be usually found.  eBay was especially good around 2008 when you could get extra cash back through the now defunct Live Search Bing Cashback since they had incredible promotions (30% or more cash back).  Nowadays there is more competition and gift card deals are less common on eBay.  eBay also introduced their own cash back program, creatively called eBay Bucks, to replace third party ones (although currently some categories qualify for cash back through sites like Ebates).  An eBay Buck is like regular money, but it only works on eBay, and it’s fun!! 😉  Seriously though, it’s similar to cash back programs offered by many retailers.  The standard cash back amount is 2% but there are frequent promotions of up to 10% (make sure to sign up for promo emails), which of course would be in addition to the discount (if any) on the gift card.  When buying a gift card through eBay there may be a risk of a dishonest seller, so be sure to pay with a credit card using PayPal for the most protection against such fraud.  Also it is best to use the gift card immediately to prevent the seller from using it (e.g. by using the card number and PIN online).

Gift card resellers
A few years ago a bunch of these websites sprung up seemingly out of nowhere.  They specialize in gift cards, buying and selling a wide variety of gift cards.  Some of these sites have since gone out of business but I’ve found the remaining sites to be reliable.  The sites I use most are Raise, Cardcash and my personal favorite Cardpool.  The discount these sites offer on gift cards varies.  Cards for gas stations might only be discounted a few percent, but others such as restaurants might be discounted 20% or more!  One useful trick to know is that some gift cards will be accepted at multiple retailers or restaurants that are part of the same parent company.  A couple examples include T.J.Maxx and Marshalls and Red Lobster and Olive Garden (the latter might change eventually since Red Lobster is no longer under the same parent).  These cards often are priced differently despite being effectively equivalent.  Besides buying and selling physical gift cards, some resellers also sell digital gift cards.  I’ve bought several of these through Cardpool and they are almost always delivered within minutes, reducing the need to plan purchases in advance.

The main downside of buying gift cards from these resellers is the risk of fraud, similar to eBay.  Reputable gift card reseller have policies to protect buyers, such as a guaranteed window the card will be valid, but it’s still recommended to buy the gift card with a credit card and to use it sooner than later.  Maybe I am lucky but I’ve yet to experience a problem.  Thankfully the vast majority of people using gift card resellers are honest.

If you have a Costco membership you have probably already noticed that they sell gift cards at a discount.  While the selection is limited, it is an excellent option since the discounts are often competitive to the dedicated gift card resellers.  Even if the price is higher than other options, the premium might be worth it due to the minimal risk of fraud.  This is especially the case if you plan to actually give a gift card as a gift instead of using it yourself.  It might not look good if the recipient tries to use the card only to find it has no value.

You can find a huge selection of full price gift cards at Target, and if you have a REDcard you can get 5% off!  This is good for the few gift cards that are hard to find elsewhere.  Mainly I buy Steam gift cards at Target since I haven’t found another source with a consistently better discount.  Similar to Costco, there is basically no risk of fraud when buying gift cards from Target.


Some cash back credit cards offer 5% for grocery purchases, and most markets have a good selection of gift cards, so if you have such a credit card you can extend that 5% discount to many other establishments.

Besides the above there may be other ways to buy gift cards at a discount.  For example, I have seen ads for gift cards on craigslist.  However, I haven’t tried them.  The options outlined above are the ones I’ve happened to use.  If you’ve used any other sources or have any feedback feel free to submit a comment.

I’ve also posted some articles with other money-saving tips, so be sure to check them out if you haven’t already.
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