“People think of gift cards as this foolproof gift, but the truth is that you never really know what somebody likes,” said Sarah Roe, a spokeswoman for gift-card listings aggregator GiftCardGranny.com. “Getting some cash in your pocket is definitely better than throwing that gift card in your regifting closet and forgetting about it.”
Indeed, the average American has $100 in unused gift cards, according to research firm CEB TowerGroup. And last year, an estimated $750 million in gift cards went unclaimed in total, the company said.
But a group of websites is trying to fill that gap by buying and reselling gift cards that would otherwise sit idle.
Let’s say, for example, your well-meaning aunt bought you a $100 gift card to Omaha Steaks. But you’re a vegetarian. You can go to CardCash.com — which, with $100 million in annual revenue, is one of the largest online gift card exchanges — and receive $70 in return for the gift card. You simply type in the gift card number, the pin number and the card’s value.
After that, the site verifies the card’s balance. If everything checks out, you can get paid through PayPal, with a check or a direct deposit to your bank account. Or, if you’d like, you can opt for a gift card to another merchant, such as Dell or CVS.
The site determines the going rate based on supply and demand for any given retailer.
“A gift card to Wal-Mart or a gas station will get you a great value, something like 93 cents on the dollar,” said Elliot Bohm, co-founder and chief executive of CardCash, based in Brick, N.J.
But a gift card for a luxury brand or a smaller retailer that is less in demand may garner just 71 cents on the dollar.
The site then takes that gift card and resells it for a discount. Wal-Mart gift cards, for example, were marked down 1 percent earlier this week, while American Apparel gift cards were discounted 22 percent.
A number of similar sites and services have cropped up over the years. Some, like CardBucks and eBay allow you to set your own price for the gift card and will help match you with an interested buyer. And another site, Raise, lets you list your unused or half-used gift cards. Once you find a buyer, the site takes a 15 percent cut of the sale.
But Timm Walsh, chairman of the Retail Gift Card Association, cautions consumers — including those who want to sell their cards in exchange for another one — to tread carefully because some sites may sell gift cards that don’t have the advertised value on them.
“It’s buyer beware in that channel right now,” said Walsh, who is also vice president of corporate sales for the movie theater chain, Regal Entertainment Group. “Buying from the retailer directly is still your best bet.”