Monday, June 11, 2007

The great thing about gift cards...

Time to go shopping
Originally uploaded by tomeppy.
... is that you can buy them on eBay.

A number of guests at our wedding last October gave us gift cards of varying increments to some restaurants and shops. We have wanted to use them, but because we prefer to buy things used whenever we can, it has been hard to actually consume the gift cards. The other problem is that I've sometimes gone to the store to get something, and realized upon arriving that I should have brought the gift card currently sitting at home. One gift card, the one for The Cheesecake Factory, we knew rightaway that we would not be interested in using. So we looked to see whether it would be feasible to sell them on eBay. Indeed, a massive market of buying and selling gift cards and certificates exists.

How can the gift card market help you in your frugality?
Buyers -- if you know what store currency you are looking for, you can get the gift card on eBay for up to 20% off face value (10-15% is the norm). Gift cards are most beneficial if you (1) already know the store or restaurant where you will spend money and (2) have the ability to postpone your purchase by a few days or a week. (3) Gift cards may also be beneficial if you shop the same store(s) regularly, i.e., you don't have to worry whether or not you will make future purchases there.

For example: I decided that I wanted to purchase several episodes the Bravo show Work Out off of iTunes at $1.99 each. Granted, the truly frugal thing would be to watch it for free or not at all, but we don't have broadcast or cable, and I decided it would be worth the money to me. Instead of immediately purchasing the episodes at full price, I found an iTunes gift card auction on eBay that was about to end. The $15 gift card (which fit the number of episodes I was planning to buy) cost me $13.26 (free electronic shipping), giving me an 11.6% saving for very little of my time, not to mention +1 to my eBay reputation.

Another example: Those past a beginner stage of frugal living probably brew their own coffee. Or quit the caffeine habit. But those who have decided that the value of their daily cup of Starbucks is worth more than the monetary cost can purchase a $50 gift card on eBay for $45 and get their month's caffeine at 10% off. Find a better priced auction and increase your savings, but already that's $200 in your pocket if you spend $2000 on coffee a year.

Finally: Have a friend whose birthday is coming up in a few weeks? They are into electronics and other stuff, so you figure you will get them a Best Buy gift card (Whether or not gift cards make good gifts is debate that will be left for another day -- I come from a Chinese cultural background and have no qualms giving cash). By buying the card on eBay, you pay less for the gift card, and they can still purchase the same amount of stuff. If their birthday is tomorrow, or TODAY, this may limit your options somewhat. But fortune favors those who plan ahead.

N.B. As with all eBay transactions, use good sense before you bid. Check out the seller's reputation, types of goods they typically sell, and feedback comments from buyers. If you have any questions about the items, definitely ask.

Happy bidding.

*Photo by tomeppy