Holiday gift card sales have reached record highs this year, a trend that retailers are more than happy to accept.
Since the money placed on gift cards doesn’t count towards a company’s bottom line until it’s spent, retailers are focusing on encouraging shoppers to redeem them right away. This is especially true given the fact that many retailers have seen disappointing profits this holiday shopping season. Overall, most major businesses saw sales increase only at the expense of extra-deep discounts that hurt their profit margins.
Although you probably don’t care about helping retailers with their bottom line, you will be interested in getting the most out of your gift.
Here are a few reasons to spend that gift card now.
In light of disappointing profits, many businesses are extending their holiday sales to lure customers back in. This is good news for consumers seeking to maximizing their gift card’s spending power. Most of the sales you’ll see will be on overstocked electronics and toy items that retailers are hoping to blast through before sales drop off.
And, since manufacturers frequently introduce new models of their products in the early months, this year’s models are likely to be discounted. Bottom line: unless you plan to upgrade, you’ll get the best prices if you buy now.
Reportedly, some retailers are offering bonus gift cards to consumers who make purchases over a certain dollar amount in the next few weeks. Of course, this tactic is designed to motivate larger purchases at a time that holiday spending is winding down — but if you already have gift card money to spend, using it now allows you to take advantage of these limited-time offers.
Businesses would prefer for you to buy high-ticket electronics, toys, and full-price apparel with your gift cards, but they won’t complain if you help move some of their seasonal clearance merchandise. Items that are already discounted allow you to purchase more for your money, and may help you get a head start for next year’s holiday planning. Right now you’ll see 50-75% off Christmas merchandise like wrapping paper, decorations, and gift sets.
The majority of gift cards don’t have an expiration date; if one does, laws require that it be clearly printed on the front of the card. Even if your card doesn’t expire for the usual five years, it may start incurring inactivity fees if not used after a full year. Be aware of your card’s expiration date, as well as any fees associated with not using it. In any case, the longer you wait to use a gift card, the greater your chances of losing it, or its losing value. Just use it.
One possible reason you might be hanging on to a gift card is a disinterest in shopping at that particular store or chain. Rather than wasting it, put it up for sale on one of the many gift card exchange websites, where you can often get face value in cash, or trade for a gift card you will spend.
Some people see gift cards as impersonal, but really they’re just the gift of choice. However you look at it, gift cards are free spending money. Use them right away to maintain the gift mentality they were given in — and so you’re more likely to spend it on something you want, and not just something you need.