Gift Card Exchange Websites: Is Regifting for Money Safe?
You can sell your gift card, but beware of these pitfalls
Got a gift card? It’s the thought that counts, of course. But say you don’t want to buy more coffee from that chain down the street or drive across town to shop at a snooty boutique. No one wants to see tens — or hundreds — of dollars worth of free merchandise go to waste. So what can you do with gift cards you won’t use?
If you can’t regift them to friends or family, consider selling them on a gift card exchange website. These sites, such as www.cardavenue.com, www.plasticjungle.com, www.swapagift.com and www.cardpool.com, have sprung up to deal with the huge number of gift cards that never get used. (Each year an estimated $1 billion dollars in gift cards go unredeemed, according to Marketwatch.)
Just make sure to use a reputable website, says Christina Tetreault, staff attorney for Consumers Union, the policy division of Consumer Reports. “Don’t use informal sites like social media and Craigslist.” Scammers troll these sites, she told SafeBee, and there’s no middleman to help protect you.
To help determine whether an exchange site is legitimate, Tetreault recommends you check “secondary gift card market” website reviews. Examples include www.resellerratings.com, www.sitejabber.com and www.gift-card-exchange-review.toptenreviews.com.
“Look for a site that vets buyers and sellers as much as possible. And never provide the card’s PIN until the transaction is complete,” Tetreault warns. Buyers can use the PIN to make purchases without having the physical card.
The Federal Bureau of Investigation (FBI) agrees. In June 2015 the agency issued a consumer warning about gift card scams and giving out PIN numbers in advance.
In particular, the FBI cautioned would-be sellers that some disreputable gift card resellers agree to pay for a gift card but reverse the payment for the transaction after receiving the card’s PIN number. They use the card’s PIN to make purchases online, and you are out both your money and your gift card.
If you believe you have been a victim of a gift card scam, you may file a complaint with the FBI’s Internet Crime Complaint Center at www.IC3.gov.
Related: Free Stuff? Don’t Take the Bait
How exchange sites work
These sites usually accept all kinds of gift cards (including from stores, restaurants and theatres). The site confirms the value of the card and pays you a percentage of that value, typically about 60 to 85 percent, though it can go as high as 92 percent, according to Consumer Reports. They then resell the card to someone else for a profit.
To get most money for your card, you’ll need to shop around. According to Consumer Reports, no one site offers better deals all the time. It depends in part on supply and demand, meaning that value of the card may vary from day to day.
Based on demand, some cards are typically worth more than others. Consumer Reports notes you’ll likely get a lot more for your Wal-Mart or Whole Foods cards, for example, than for a Brooks Brothers card.
According to Consumer Reports, you may have trouble selling the card if your name is on it, since most people don’t want to buy a card made out to someone else. In addition, many of the sites do not accept cards with expiration dates.
Another tip: “Do not use person-to-person payment apps like Venmo for a gift card sale,” says Tetreault. “It could be construed as a commercial transaction and you may not receive the protection you expect.”
What to hold out for
Once you’re sure you’re dealing with a reputable business, compare the offers. “The reputable sites will vary a little, so read the terms and conditions before you decide to go with them,” says Tetreault. Aside from what they’ll pay for your card, look for:
- Free shipping if you’re sending in a gift card by mail
- An email address and/or phone number for the company (in case there are problems, you want to be able to talk with a human being)
- A money-back guarantee (given the many gift card scams out there, this may be the most important feature of all)
“If there’s any doubt in your mind about what you’re getting into, don’t do it,” says Tetreault. “Gift cards are a lot like cash and have very few consumer protections.”