Buying Gift Cards at a Discount

Written by Nickel - 14 Comments

Here’s a quick tip for those of you that are intent on giving gifts cards this holiday season… Check your local grocery store to see if they sell gift cards for major retailers and restaurants. Ours does, and that means we can actually save a decent chunk of money on them by using a reward credit card.

For example, our AmEx Blue Cash card offers 5% off on “everyday” purchases, including those made at grocery stores. While we’re not talking about a large sum of money here, every little bit helps. For example, you can effectively get a $25 card for $23.75 or a $50 gift card for $47.50. And even if you’re not looking to give a gift, you can roll your own 5% discount at a variety of merchants by doing this.

Curious as to the types of cards that you might be able to purchase? Here’s a rundown of the things that I saw on the gift card rack in our local grocery store:

American Airlines
Barnes & Noble
Bass Pro Shop
Bed, Bath & Beyond
Best Buy
Blockbuster
Cabela’s
Cheesecake Factory
Chili’s
Cracker Barrel
Home Depot
iTunes
Macaroni Grill
Maggiano’s
Nordstrom’s
Old Navy
Olive Garden
Outback Steakhouse
Potter Barn
Red Lobster
Regal Cinemas
Sears
Starbucks
Toys’R'Us

I’ve also seen gift cards of this sort in gas stations around town, so keep your eyes open when you’re out and about.

Published on December 11th, 2007 - 14 Comments
Filed under: Frugality
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About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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Comments (scroll down to add your own):

  1. I’ve read somewhere that the grocery stores charge more than face value for gift cards to other stores. Do you know if that’s true? Thanks!

    Comment by Chief Family Officer — Dec 11th 2007 @ 12:21 am

  2. We have a grocery store/chain that offers $0.10 off per gallon on gasoline for every $50.00 spent. So not only can you utilize the cash back from your credit card rewards, but you can also lower your fuel costs.

    Comment by liquidpooled — Dec 11th 2007 @ 7:41 am

  3. CFO: These cards were actually selling for face value.

    Comment by nickel — Dec 11th 2007 @ 8:05 am

  4. Thanks, Nickel – that’s good to know!

    Comment by Chief Family Officer — Dec 11th 2007 @ 8:35 am

  5. We also picked up some gift cards on ebay and craigslist that were selling under face value.

    Comment by My Dollar Plan — Dec 11th 2007 @ 9:51 am

  6. Just wanted to mention that the gift card should be used within 6-12 months. Otherwise it would have been better to keep the money in the bank.
    Another way would be to (carry)trade the gift card on eBay for its nominal value, e.g. buy it for 23.75 and sell it on for $25.

    Comment by Jacob — Dec 11th 2007 @ 11:43 am

  7. be careful as a lot of stores charge extra for gift cards. I got burned for 10% on those (for an AMEX giftcard). From now on, I either buy directly from the merchant or give cash.

    Comment by thomas — Dec 11th 2007 @ 12:32 pm

  8. thomas: Visa, MC and Amex branded cards often carry a fee, but store brand cards generally do not, even when sold at grocery stores (or at least that’s the case around here). Nonetheless, it certainly something to keep in mind. Thanks!

    Comment by nickel — Dec 11th 2007 @ 2:12 pm

  9. Good idea, although you should be aware that some stores (around here, most Walgreens stores do it) will only accept cash or debit for gift cards.

    Also, some of the comments say that there is a markup charged on the gift cards. This is usually only on the cards offered through credit card companies. The ones that are store specific usually don’t have any fee.

    Comment by BillyOceansEleven — Dec 11th 2007 @ 3:37 pm

  10. You are a genius!

    I calculate that I need to buy 4 $25 starbucks gift cards in order to get a free $5 latte.

    Comment by Money Conversations Guy — Dec 12th 2007 @ 9:49 am

  11. Don’t forget about some Rx places.

    My list:
    AMC Theaters
    American Airlines
    Applebee’s
    Barnes & Noble
    Bass Pro Shops
    Bed, Bath & Beyond
    Bennigans
    Best Buy
    Blockbuster
    Boston Market
    Cabelas
    Champs Sport
    Cheesecake Factory
    Chilis
    Circuit City
    Cold Stone
    Cracker Barrel
    Footlocker
    Gap
    Hollywood Video
    Home Depot
    iTunes
    JCPenney
    Jet Blue
    Jo Ann’s
    K-mart
    Kohls
    La Madeline
    Landry’s / Rainforest
    Lands End
    Linens n Things
    Logans
    Lowes
    Maccroni Grill
    Marriott
    McDonalds
    Old Navy
    Olive Garden
    On the Border
    Oshmans
    Outback
    Papa John
    Pappas
    Peir 1
    Pottery Barn
    Pottery Barn Kids
    Quizznos
    Radio Shack
    Red Lobster
    REI
    Saltgrass
    Sears
    Sharper Image
    Shell
    Sports Authority
    Starbucks
    SWA
    TGIF

    Comment by sman — Dec 12th 2007 @ 11:55 pm

  12. I know that some will disagree with me, but I just don’t see the downside of rewards credit cards – as long as you pay off the balance every month.

    Comment by rocketc — Dec 14th 2007 @ 9:57 pm

  13. My local grocery store (Publix)would only take Cash. However, CVS pharmacy took credit card.

    Comment by Ryan — Dec 17th 2007 @ 3:19 pm

  14. Be careful when purchasing gift cards from ebay and craigslist. I’ve done this a few times and got scammed on one, even though I am pretty cautious. I ended up losing about $30 due to a seller who refused to ship the card for whatever reason.

    Comment by Odnal — Mar 23rd 2008 @ 3:07 pm

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