Gift cards are one of the five back gift card popular gifts during the holidays. But, while they simplify gift-giving by eliminating worries about the recipient's taste or which specific items he or she might already have, not all are created equal.
Some may come with purchase or shipping fees, and credit card issuers generally frown on manufactured spending by purchasing a large number of them in an attempt to hit a sign-up bonus threshold.
1. Save Money
There are plenty of things you can count on every holiday season: time off from work and school; an overweight, bearded out-of-towner crashing through your home’s chimney with a shopping cart full of gifts; annoying office parties; embarrassing family photos; overeating and, unfortunately, billions in gift card value that goes unredeemed. Fortunately, you can avoid some of these pitfalls by playing your cards right when purchasing gift cards.
If you use a rewards credit card to buy gift cards, you’ll earn cash back or points on the purchase. You’ll also save money, since you’ll pay less in the form of purchase fees. Purchase fees are typically a percentage of the card’s face value and tend to increase with the amount purchased. For example, a $50 Mastercard gift card will cost you an extra $2.95 when purchased online.
You’ll also save money by buying gift cards in bulk, if possible. Some retailers, such as CVS and Walgreens, offer 5% or 0.50 back when you buy two or more cards at the same time. However, make sure you check the card’s expiration date and balance before doing this, as some cards have activation fees that you’ll need to pay to get the full value of the gift card.
Keep in mind, though, that most credit card issuers frown on so-called manufactured spending. Using gift cards to meet spending thresholds for credit card sign-up bonuses could trigger red flags and result in the issuer clawing back rewards or shutting down your account altogether.
2. Get Cash Back
Credit card rewards programs often let you redeem points for gift cards. That’s a nice option to have if you’re trying to reach a signup bonus spending threshold, such as $3,000 in three months. However, you have to approach gift card purchases with caution. If a credit card company suspects you’re buying lots of gift cards to manipulate the system, they might cancel your reward points or even close your account.
You can also use gift cards to help you earn cash back when using a card that offers bonus rewards in certain categories. For example, the Bank of America Customized Cash Rewards card gives you 3% cash back in the category you choose each quarter, which includes drugstores, online shopping and home improvement/furnishings. You can also get 2% back on grocery stores and wholesale clubs. The card has a $2,500 cap in rewards categories per quarter, and then it’s 1%.
A strategy that works well with many credit cards is to use gift card purchases to help you earn more cash back or bonus rewards. For instance, say your card gives you 6% cash back at supermarkets. You can buy a few $50 gift cards at the supermarket, then spend them on something you need, such as a $200 toilet at Home Depot.
To find these deals, download the free Ibotta app and check its offers. The app pairs with a number of major grocery stores, as well as retailers like Target and Walmart. It also lets you earn cash back on gift card purchases from other merchants. The app is available for iOS and Android phones and tablets. You can also use the Honey browser extension to score bonus cash back on your online shopping.
3. Shop Online
There are a few things you can pretty much count on every holiday season: clumsy, bearded out-of-towners crashing through your chimney; obnoxious coworkers singing at the office Christmas party; and gift cards. If you’re a savvy consumer, you can use those cards wisely this year to rack up rewards and get more value from them.
Gift cards are widely available, from online retailers to local supermarkets, and can be used at any merchant that accepts them. Moreover, many are reloadable, which means you can take the money on them and turn around to spend it at other stores. Using a credit card to buy and then redeem the card’s funds can make even more sense, especially since most card issuers allow you to do just that — plus you can earn cash back or points on the purchase itself (assuming your credit card offers such bonuses).
A good example is the Five Back Visa Reward Card issued by Pathward, N.A., which allows you to earn 5% back on purchases from Amazon and Whole Foods Market. This is in addition to the card’s bonuses on restaurants, gas stations and local transit/commuting.
To find these opportunities, go to the card’s website or app and log in with your account. Then click the Accounts and Lists tab, located toward the top of the home screen, followed by Gift Cards. To reload a card, select the yellow Reload your Balance button. You’ll need the last four digits of the card to do this, as well as your email address and password. Note that this will eat into any remaining balance on the card, so be sure to plan accordingly.
4. Get a Free Gift
Gift cards make holiday shopping simpler by reducing the risk that you'll purchase a gift your recipient might already have. However, billions of dollars in gift-card value have gone unused in recent years. Here are a few tips to help ensure yours don't end up in a drawer full of unopened sock clutter.
Free gift card offers can be found at restaurants like Olive Garden and Applebee's, as well as retailers such as Target and DSW. These retailers typically offer a bonus gift card when you buy certain amounts of gift cards during special promotions.
If you want to include a free gift-card offer in your Five Back promotion, select Products in the side menu of your CommentSold dashboard and then click Add Product. Name the product, enter a description and choose an image to represent it. Next, specify the cart subtotal minimum a shopper must meet to trigger the offer and then toggle the ‘Gift With Purchase' switch to On. You can only enable one gift-card-with-purchase product per campaign. For additional instructions, check out this help article.
5. Get a Free Gift Card
Gift cards are an easy way to get something you want without the risk of overspending. Gift cards are also a great way to give gifts to others. And, with the right apps and strategies, you can earn free gift cards just by doing the things you already do.
Some of the easiest ways to earn free gift cards include taking online surveys and shopping with a cashback or rewards app. Many micro-task apps, such as PrizeRebel and i-Say, will pay you in gift cards for things like watching videos, testing new products, or completing daily challenges. Other options include signing up for offers with partner companies to earn points that can be redeemed for gift cards at stores such as Amazon, Xbox, Kroger, or iTunes.
Another simple option is to install a rewards browser extension or download a shopping app, such as Capital One Shopping or Shopkick. With these apps, you can earn rewards credits (called “kicks”) when you shop at your favorite retailers. In the case of Shopkick, you can even earn kicks just by walking into a store or scanning items with your smartphone.
In addition, online survey sites such as Branded Surveys and Opinion Outpost often offer gift card rewards as payout options. Lastly, sites such as Swagbucks and Bing will pay you in credit for things you’re already doing, such as shopping, watching videos, or changing your search engine settings. The key is to choose the best programs that fit your schedule and habits, and don’t overextend yourself by participating in too many passive income opportunities. If you’re unsure which options are the best for you, ask friends and family for advice. Most people will be happy to help you find the right app or service.
