Americans love to receive gift cards for the holidays. The National Retail Federation surveyed Christmas shoppers and found that 3 in 5 Americans expected to receive a gift card this year. Total gift card sales for 2012 totaled over $110 billion, according to CEB TowerGroup’s annual gift card report—that amounts to a little more than $950 in gift cards for every American household. Most of those people will tell you that receiving a gift card is not the same thing as receiving the gift card you want.
Not all retailers and restaurants are created equal. Odds are, if you’ve received gift cards from several retailers, there might be a few gift cards that leave you less-than-excited. Although a large number of Americans tend to stash their unwanted gift cards in a forgotten drawer, there are better options to deal with these types of gift cards.
Redeem them for cash. If you’d rather have cash instead of a useless gift card, you might want to look into whether the card can be turned into cash. Although most retailers restrict cash redemption, there are a number of states with laws requiring companies to redeem cards for cash—provided your card balance is under a certain threshold. There are also other viable ways to convert cards to money.
For example, you might be able to sell the card online. A number of websites allow you to sell or exchange your gift card. Using these approved card exchanges is one of the best options for selling or exchanging gift cards since most cards will be void without pre-approval by the retailer. Unfortunately, you might lose value relative to the card balance because of market prices or website fees. However, it’s more money than what you’d receive by not using the card.
States with gift card laws. Some states with gift card laws include California, Colorado, Maine, and New Jersey. Each state requires card balances be less than a certain amount before cash redemption is mandated. The threshold is usually around $5 to $10.
Exchange the card for a card you want. If a retailer requires that you use the gift card to make a purchase, you may have the ability to convert your card to one you’ll use. This is done by purchasing another gift card or prepaid debit card for the same value at the gift card retailer. All cards have different policies and many of them will not allow this type of conversion. Nonetheless, it’s a possibility worth exploring.
Popular retailers that allow conversion. There is no restrictive language in Walmart’s gift card policy that prohibits conversion, meaning you should be able to purchase other gift cards or prepaid debit cards. Target allows conversion with other gift cards, but not prepaid debit cards.
According to industry estimates, unused gift cards in 2012 were around $1.8 billion, or about $15 for every U.S. household. Yet most of the money-saving options above are as easy as using a gift card. This year, you might want to try redeeming or converting your unwanted gift cards before banishing them to some forgotten nook or cranny.
JP is a writer for the money blog 20's Finances. He is an MBA and the financial officer for a nonprofit organization.