Gift Cards Explained

Updated: Mar 26, 2021

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Saving money on gift cards is easy. Discounted gift cards are a very real product and you can find discounts in a number of places. Learn what kinds of discounts to expect, what types of gift cards are out there, and where you can purchase them.

Discounted Gift Card Benefits

Everyone asks if discounted gift cards are real because the idea of getting a gift card for cheaper than the value seems too good to be true. The truth of it is, they are real because companies use the discount as a marketing tactic to spread the word about their product or service by offering a discount at the very beginning.

Discounts Available on Gift Cards

It can depend on where you buy the gift cards and what type of gift cards you buy as to what discount you can expect. On average, 5% or 10% is the average for discounts. This means if you buy a gift card valued at $50, it will likely cost you between $45 and $48 to purchase. It may not seem like a lot but it adds up fast.

Any kind of discount provides you with the ability to save money. Since gift cards operate like cash, you have the ability to save more money when you make the purchase with the card. Save money when you buy the card with discounted gift cards. Then shop a sale or use a coupon at the store or business that the gift card has been issued at. At the end of the process, it may be possible to turn the total discount into 20% and possibly more.

What Types of Gift Cards are Out There

There are a number of types of gift cards out there. Be creative as to where you shop and you can find discounted gift cards for any number of products and services. You may even opt to shop at a different store than usual just because of being able to get a discounted gift card there.

Common industries for gift cards include:

  • Clothing stores
  • Restaurants
  • Rental car companies
  • Airlines/Cruise lines
  • Hotels
  • Home Improvement stores
  • Auto stores
  • Top websites (such as and

Since you can find discounted gift cards in just about every place, it makes shopping and gift buying easier. Spend the money upfront in order to save money on common transactions. This makes buying gifts, travel and everyday purchases more affordable. Look hard enough and almost every store offers a discount on a gift card somewhere.

Where to Buy Discounted Gift Cards

It’s important to know where to purchase the discounted gift cards. They are available all over the place so it’s a matter of convenience more than anything else.

Wholesale stores may offer discounted gift cards. These are usually only discounted by a few dollars but it may be the most convenient way to buy the gift cards. If you wait until the holidays, there may be additional incentives that provide you with several gift cards for gifts as well as an additional one for you.

Some credit cards offer discounted gift card opportunities. You may be given points to use towards the discounts. This way you can use some of your points accumulated to take 10% or even 15% off some of the gift cards. A $100 gift card could end up costing you only $85 or $90, which is a good deal.

There are also various websites that offer discounted gift cards. These are usually in conjunction with various marketing sites. You usually don’t have to pay shipping and handling. You just choose the card that is right for you, pay the total and wait for the card to ship to your home.

In some cases, you can also find gift cards available for use online. This provides you with a special code to enter during the checkout process. The benefit of this is that you don’t have to wait until the gift card arrives in the mail to use the gift card that you’ve already purchased.

Digital Gift Cards Still On The Increase

As mentioned before, traditional, plastic, gift cards are extremely popular, especially around the holiday season when many consumers buy a gift card as an easy gift alternative.

However, digital gift cards look set to overtake traditional gift cards as the market continues to expand at an increasingly rapid rate.

Giving a gift card is an easy solution when shopping for gifts at any time of the year, especially for someone who is difficult to buy for as they allow the recipient to essentially choose their own gift.

The majority of retailers now offer plastic reloadable gift cards which function in much the same way as a prepaid debit card, albeit limited to one particular merchant.

It is possible to give the gift of coffee from Starbucks, office supplies from Staples or clothing from GAP. There are gift options available for almost every high street store. Last holiday shopping season, around $91 billion was spent on plastic gift cards.

However, a recent study by consulting firm Urban Wallace Associates who are based in Lexington, Mass. shows that the market for digital versions of these gift cards has doubled in the past three years and the prediction is that consumers are ready to leave plastic behind. Senior Editor of Incentive Magazine, Leo Jackson said,

Simply put, digital gift cards are easy. They are easy to distribute via email and digital gift cards can be used online, at home, at work or even from a Smartphone so there is no need for the user to trek to a bricks and mortar store.

Digital gift cards are protected by many of the same rules that their plastic counterparts are. They must adhere to the regulations set out by the Credit CARD Act of 2009 requiring retailers to disclose information about fees and limitations that apply to the gift card. Digital gift cards also have many unique features which also contribute to making them more attractive to consumers.

For example, it is much easier to replace a lost digital gift card via e-mail because the retailer can instantly void the lost redemption code and issue a new one. In addition to this, digital gift cards are much more environmentally friendly since often the retailer can simply scan a barcode or key in a redemption voucher directly from a Smartphone. Even if the digital gift card must be printed out, this is still more environmentally friendly than plastic cards.

NJ Treasury Department Sets Sights On Unused Gift Cards

New Jersey residents are being warned not to misplace or forget about gift cards they receive thanks to recent changes to the state’s unclaimed property law.

When you receive a gift card from a friend or relative, it is common for consumers to tuck it away for a later date, especially if they are already saving for a big-ticket purchase.

However, when gift cards are not used within two years of issue, New Jersey residents run the risk of losing the value of the card to the state. The Treasury Department of New Jersey has brought in changes to unclaimed property laws and has made it a requirement for gift card issuers ad resellers to track zip codes on all gift card purchases.

This will allow the treasury to seize any unclaimed gifts once the 2 year period has expired.

Many states operate unclaimed property legislation known as ‘escheat’ laws, although these are usually related to the state begin allowed to claim property of a deceased resident which is unclaimed by surviving family members.

In total, 26 states (Numbers might have changed due date) currently take possession of a deceased person’s estate after 3 years of inactivity. However, the move by New Jersey marks the state out as the first to attempt using personal information from gift card buyers to allow them to stake a claim on potentially unused funds.

A lawsuit has already been filed by American Express and the Retail Merchants Association in an attempt to prevent the legislation being passed, citing that it places an ‘undue burden on businesses.’ President of the New Jersey Retail Merchants Association, John Holub said,

Retailers and gift card issuers like American Express have had serious concerns about escheat law since it was passed nearly two years ago.

American Express have gone so far as to remove all gift cards from sale in New Jersey retail locations rather than comply with the law. Blackhawk Network who are responsible for gift cards issued for Barnes & Noble, Home Depot and Sears have also pulled gift cards from sale in New Jersey.

The legal risk, technological burden and steep cost of complying [with the new law] is simply too great,

said Holub. It has been reported that gift card issuer InComm who issue cards on behalf of iTunes, Macy’s, Starbucks and many others are also preparing to follow American Express’ lead. InComm also issue prepaid Visa and MasterCard debit cards under the Vanilla brand name and will no longer offer these for sale in New Jersey as well.

In response to these actions, Treasury Department spokesman Andy Pratt said,

We’re working with industry groups to determine the best way to have merchants collect Zipcodes. We’re not requiring it until we come up with a policy that is uniform and as least onerous as possible.

This indicates that the policy has not yet been finalized. The State of New Jersey took ownership of almost $80 million worth of unclaimed property in 2011.

It is estimated that somewhere between 4 and 16 percent of all gift cards are never redeemed, according to studies by Nielson and Providence College. Previously these funds remained with the merchant, but it is easy to see why the state is eager to take their own slice of this potential profit.

With issuers pulling their gift cards from sale at retailers across the state of New Jersey it is also becoming increasingly difficult for consumers looking to pick up a last minute gift. President and CEO of InComm, Brooks Smith said,

In addition to the compliance issues this law creates, we are very concerned that our New Jersey consumers will not have continued access to their gift card funds. States should not have the right to remove funds from an unexpired gift card.

Potentially $1.7+ Billion Left on the Table via Gift Cards

It’s hard to imagine, but estimates are startling when it comes to cash left on the table in the form of unused gift cards this year. While we’re getting better at using every penny available on Aunt Edna’s Visa gift card, there’s still a lot of holiday loot that’s not bought every year via those convenient gift cards. In fact, this year, that number is expected to hit the $1.7 billion mark.

Most of us will use it all; in fact, it’s estimated a full 75% of consumers will not leave a single dime on their gift cards. And a third of us will not only use our gift card, but we’ll kick-in our own cash in the process too, at least $25, according to CEB surveys.

Here’s what many consumers don’t know, however. There are new rules, courtesy of the 2009 CARD act that puts into place compliance guidelines associated with expiration dates and burdensome fees.

The advisory company also forecasts 85% of Americans will give at least one gift card this holiday season, and we’ll spend close to $110 billion to do it. Here’s the interesting twist this year: we’ll spend $19 billion on restaurant gift cards.

This is considerably higher than in previous years, partly because more restaurant chains are coming on board. Meanwhile, the traditional gift cards offered by the big credit card companies like American Express, Discover and Visa, will easily top $40 billion and store-specific cards, like Wal Mart, Bass Pro Shops and Target will total close to $37 billion.

Even digital gift cards, like those we buy at Amazon, have seen a big jump this year, the growth isn’t nearly as aggressive as the traditional gift cards, which is surprising because it was expected this particular gift card option would be the fastest-growing for years to come.

The fact we’re spending more this year on gift cards could suggest the economy is on the mend. There have been many signs, including record-breaking Black Friday, Cyber Monday and this week’s Free Shipping Monday – all of which have surpassed early expectations.

The lower drop in unemployment is another sign, too. Still, many are wondering whether or not finding a solution to the fiscal cliff before the holidays could have lent to even stronger sales.

At any rate, it’s believed the numbers will grow quickly each year with expectations by 2020 of more than 10% growth in some specific card areas.

Consumers like gift cards because it allows the recipient to choose exactly what he wants. It eliminates so many returns, too since the recipient is available to try clothes on or to choose the right color and brand.

It stands to reason it’s a fast-growing sector. The variety of gift cards fuels growth, too.

There’s another consideration, too. Often, we receive gift cards for stores we don’t shop at. It seems like a wasted effort until you consider the fast rise of swap sites that allow consumers to trade in those less than ideal gift cards for those they’re far more likely to actually use.

These sites have been popping up over the past few years and have filled a niche that would otherwise result in even more unused gift cards. Some sites even allow a trade-in for cash.

But there’s a catch. Depending on the service the consumer uses as well as the popularity of the card, consumers might also receive only part of the face value of the card.

The sites are easy to use and require visitors to first create an account, which is always free, and then provide details of the card, such as merchant name, value, and expiration date. Each site has different rules it plays by, but it all comes down to the same thing – it allows users to trade gift cards.

Each site, after keying in all of the information, will provide the user with the value or card redemption amount. Users then may choose to receive cash via PayPal or select a new gift card from the site.

Once the consumer’s unwanted gift card is mailed to the company, he sees either a new gift card or cash to his PayPal account – usually within two days.

There is a cost, though. While setting up the account is free, there are sites that charge additional fees, shipping costs, and even service fees. Not only that, it can be easy to lose track of expiration dates and other restrictions on a gift card.

The sites are great for those wishing to not see a relative’s money go to waste, but like everything else in the credit sector, paying attention to the details is crucial. Some sites even allow users to donate their gift cards to charities.

American Express eGift Card – Versatile and Convenient

There are a lot of ways to send money these days. Using an online electronic gift card, though, is simple and secure and still offers shopping at a variety of retailers all over the internet. When it comes right down to it, there is no gift more versatile, flexible, and widely-appreciated than cash. Obviously, though, sending cash is not easy because it can get lost in the mail or could be stolen or sent to the wrong address. Wiring money is a decent alternative as it only takes a matter of hours, but it can be very expensive after all the fees you pay. Buying an American Express eGift Card online from American Express, though, is quick and easy.

For Any Occasion

In terms of gift-giving most people would agree that it really is the thought that counts. However, sometimes the best regard is to just send someone some extra cash so they can pick up a few things that they really need or want. That is probably why the gift card industry has been so successful of late.

Just a decade or two ago, a gift card (or gift certificate) was something that you could really only buy at one particular store. Usually, then, you would try to buy one at a department store that carries a variety of products. The recipient, then, would have to physically visit the store to pick out the things that they want to purchase.

These days, though, electronic gift cards can be used in several different ways. Most notably, they can be purchased directly from credit card companies for much broader use. For instance, you can buy an American Express eGift Card that will be accepted anywhere in the world that takes American Express. This makes one of their eGift cards the perfect gift for:

  • Birthdays
  • Christmas
  • Graduations
  • Student expenses
  • As a “Thank You”
  • “Just Because”


While other gift cards – both online and at a physical store – may require you to pay cash or use a debit card for a purchase, an electronic gift card from American Express gives you a couple of convenient options for buying a gift card for someone you love.

  • Charge the value of your gift card to your American Express card
  • Use your American Express Membership Rewards points
  • Charge the value of the gift card to another credit or debit card (bearing Visa, MasterCard, or Discover Card symbols)

Basically, you can purchase a gift card the traditional way by charging its value to your American Express credit card. This makes it very easy for you to send a quick reward or gift to someone at a distance.

However, you can also apply some (or all) of the Membership Rewards Points you have earned to a gift card that you would like to send. Finally, you can use any major credit card. You can also use a combination of Membership Points and card charge to cover the full cost of the gift card. No matter how you pay, though, the online form will still ask for some standard information:

  • Your name
  • Billing address
  • Your phone number
  • Birthdate
  • Your e-mail address


Not only is it easy to purchase an electronic gift card from American Express. They are also very easy to use. Now, because they are electronic they are only available to use online, but with the online marketplace expanding as it is, it is certainly not a detriment.

First, though, the person receiving your gift actually needs to receive it. Fortunately, this is a very simple process. Basically, once you fill out the information needed to send the card, it will be e-mailed to them in a matter of minutes. All that they need to know is:

  • Their e-mail address
  • The value of the card
  • The name of the recipient (optional)
  • Your name (optional)
  • Personal message (optional)

Once you do this, the card will be sent via e-mail to your recipient. They can then use it anywhere in the online world that accepts American Express.

The Final Word

Whether you buy them for yourself or for others, you can save a significant amount of money on gift cards. As long as you know when and where to buy them, you can get good deals and please people with a great gift.

Giving an electronic gift card like the American Express eGift Card is a convenient way to give or send money to someone at a distance. While they won’t be able to use it in physical stores, the card is accepted online with any retailer that takes American Express.


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