Instant savings with discounted Gift Cards

I recently finished a great book – Pogue’s Basics: Money. Be Freaky Frugal and get it from your library if you can. Anyway, the book taught this old dog a few new tricks! One of the tricks is using discounted Gift Cards for regular purchases – especially online purchases.

Before Mrs. Freaky Frugal and I moved to downtown Philly, we belonged to BJs where I’d go once a month to buy food, paper goods, and toiletries. Now that we’re in a smallish apartment, we can’t fit the supersized stuff from BJs. Plus BJs is a hike by car.

We generally rely on Trader Joe’s and Aldi for basic groceries and paper products. Their prices are great and they’re biking distance. Gotta love’em.

But we refuse to pay the rip-off prices for toiletries at drugstore chains like Rite-Aid and CVS. The prices suck even with coupons.* I finally understand why you can’t swing a dead cat without hitting a drugstore in Philly – the store’s margins are so ridiculous they need almost no sales volume to be profitable.

We also try to avoid driving places – we prefer to walk or bike as is the Freaky Frugal way. So I hate driving to Walmart for toiletries but I LOVE Walmart prices. Buying Walmart online seemed like a logical solution since there’s free 2-day shipping on orders over $35. I use discounted Gift Cards which generally give me 5% or more off the purchase. I combine this with cash-back rewards sites (3%) and cash-back credit cards (2%) for a whopping 10% off. Cha-ching!

Although the amount of money we save each month is relatively small, these regular savings can have a big impact on your financial independence.

Really Stupid Comic #4

Finding Gift Cards

I’ve used a couple of good sites to search for discounted Gift Cards. These sites aggregate different Gift Card vendors so you can find the cheapest vendor for a particular card.

  1. Gift Card Wiki: Seems to have the most statistics and has reviews of Gift Card vendors.
  2. Card Bear: Has a nice feature that shows whether you should buy a Gift Card or wait for better prices.

You can also sign up to be emailed when a Gift Card discount hits a certain threshold. I use this to wait for good prices on Walmart Gift Cards.

Tips for buying and using Gift Cards

I’ve learned a few things the hard-way.

  • Make sure the vendor has a decent money-back guarantee period. Look for at least 60 days and carefully review the terms of the guarantee. The terms aren’t always what you’d expect from a “100% Money-Back Guarantee”.
  • Buy email/electronic gift cards whenever possible – they’re easier to deal with. No need to wait for snail mail.
  • Check the balance of the Gift Card as soon as you get it. You can do this at the store website where you’ll use the card.
  • Use the Gift Card ASAP. I buy Gift Cards no earlier than a week or two before I first use them.

I’ve had one problem so far – a Gift Card I bought from Raise.com. I tried using it over and over again, but Walmart always cancelled the order even though the card showed a balance of over $18. Argghh!

Maybe there’s some kind of fraud detection when the card is registered to the original owner in a different state? I don’t know but for whatever reason it didn’t work.

I contacted Raise and I eventually got a refund after several back-and-forth emails. Raise pointed out that its 1-year money-back guarantee “only covers your purchase price for gift cards that are not active, or have an inaccurate balance.” None of that was true for me but they made an exception which I really appreciated.

Thanks for reading! Would discounted Gift Cards work for you?

* At least use discounted Gift Cards if you do buy from a drugstore chain. For example, you can currently get 13% off a Walgreens Gift Card!

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19 comments

  1. I’ve looked into it but I’m always afraid I’m going to get screwed. I mainly stick with Amazon. 5% off with the credit card, 15% off if you play the subscribe and save game.

    1. Grant – Thanks for bringing Amazon up!

      I haven’t been screwed yet and I’ve purchased about 10 discounted Gift Cards. I did have the one problem with Raise but that worked out OK. You’re right though – it could happen.

      Amazon is another good approach if you have a Prime Membership. I just don’t want to pay for the membership on principle. Also some of the Walmart store brands are just as good as brand-name and REALLY cheap.

      The good news is that Amazon and Walmart are in a dogfight and we, the Freaky Frugal, are the winners!

  2. Wow I thought I knew most saving tricks, but I’ve never even heard of this one. Maybe I missed it, but do you know how they’re able to sell the cards at a discounted price? Regardless, I really like this idea and I’ll definitely have to start trying it out!

    1. Matt – Good question!

      The cards come from people that no longer want the Gift Cards. I guess people get them as gifts and don’t really need them. Gift Card vendors either buy and resell or provide a ebay-like marketplace for people that want to sell.

      The discount you can get is basically determined by supply and demand. I imagine the supply shoots way up after Christmas.

  3. Oh yay! New post! Lol!!!
    I had the same experience with Raise. People steal credit cards, buy gift cards with it before the credit card is reported as missing, get the gift cards and sell it online for a real profit before they trace the gift card and cancel the poor soul who brought it. It’s common. Best to buy gift cards with an uneven balance like $97.88 vs $100.

    1. Lily – Yep, I finally posted again. I only post twice per month because anything more feels like a job. 🙂

      It’s interesting that you also had a problem with Raise. I haven’t had any problem with several other Gift Card vendors I used. I really like you idea of looking for uneven balances. That makes total sense.

  4. We need to be better at using gift cards people give us. We have a couple of restaurant ones, but my kid doesn’t eat anything there so we don’t know when to use it. I’ve went on sites to buy gift cards from discount stores that we usually shop at, but not to my surprise, they were sold out until further notice. I guess people are catching on lol.

    1. SimpleMoneyMan – Welcome!

      Kids can be finicky eaters – mine were. Now that they’re adults that eat more different stuff than I do. Go figure.

      You could sell your restaurant cards that you don’t want at the same sites. But it would be at a discount. It’s way better than not using them at all.

      You can sign up to be notified when new cards become available on the sites I listed. Cards come and go quickly so you have to act fast.

  5. I like buying discounted gift cards for the savings and I generally use card pool. I haven’t had any issues. I feel the same way about Rite Aid and CVS…I was forced to go there this past weekend due to time constraints and it was way over priced. I generally shop at Target since there’s one near my work and I also like their store brands just fine so the savings are great.

    1. I’ve used CardPool as well with no problems!

      I live in the city and Target has started to open smaller stores here. There’s a Target store right across the street from a CVS so it’s easy to comparison shop. I was pretty shocked about how much more CVS cost than Target. You can sometimes use the CVS coupons to come out about the same as Target with no coupons, but why bother?

      1. And I almost always have a coupon at Target (their Cartwheel app). Also, forgot to mention that when I use CardPool to buy discounted gift cards, I also use a shopping portal…Topcashback, I believe. You get like 2% cash back on your purchase of discounted gift cards.

        1. Yep, I use TopCashback as well. And I got the 2% cash back from my initial purchase with Raise.com. There are restrictions for existing customer so YMMV.

          I’ll eventually writing a post on TopCashback, BeFrugal, and EBates.

  6. Thanks for sharing! These are great ideas; it didn’t occur to me that one could buy discounted gift cards. And barring situations like your raise.com faux pas, sounds like a fairly low risk thing to do, for the ROI.

  7. My wife and I love to use gift cards to purchase things especially when we know that we’re going to be going to that store. Definitely is a great discount and something that we love hunting for 🙂 Thanks for the great tips.

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