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Dear Maya,

I received a bunch of gift cards this holiday season and I still haven’t spent the ones I received last year.  I’m trying to keep my spending under control and I worry that by walking into some of these stores I would be setting myself up to overspend.  At the same time, I feel bad about wasting the cards that friends, family and co-workers bought with their hard-earned money.

Sincerely,

Gift-Card Worrier


Dear Gift-Card Worrier,

You’re right to be concerned.  Gift cards are big business.  Large retailers employ people whose entire jobs consist of devising gift card strategies that drive dollars—and foot traffic—their way.

These gift card czars are getting increasingly sophisticated and effective at enticing people to buy the cards.  After all, cards are more flexible than traditional gifts and more gift-y than cash, they say. U.S. gift card spending is expected to top $120 billion and account for 18% of holiday spending, according to this gift card report.

Those of us on the receiving end of the card storm must get savvier about spending them. To get the full benefit of the card without incurring additional, unwanted expense, start by taking an inventory of all of your gift cards. Note the amounts, special restrictions and possible expiration dates.  (If the amount isn’t printed on the card, call the retail outlet or check their website.)

Once you know what you’ve got, make a plan for spending or selling them as soon as possible.  Here’s how.

Spend it online.  Websites offer a wider selection of items, boosting the odds that you’ll find something you need or want.  Plus, when shopping outside the store, you have more time to compare prices, consider alternatives and hit your spending target on the nose.  You aren’t under the gun to make quick decisions and calculations in the hustle, bustle and adrenaline rush of shopping trips.

For example, take that Starbucks card you likely have.  (There are 450 million of them in circulation and one in ten American adults have one.) If you carry it around in your wallet, it encourages you to swing by the ubiquitous coffee shop and buy whatever strikes your fancy in the moment. Take my word for it, that move could become habit forming and leave you with a hankering for Starbucks long after the gift card’s funds have been exhausted.

By contrast, online you can judge the store’s offerings in a lower-pressure environment and select something useful to you, whether that’s a CD from a new artist or a travel mug to carry your less-expensive homebrewed coffee or tea.  You can also calculate exactly what your costs are including shipping and handling and hit your card’s limit right on the nose.  If saving your money’s a priority, spending a little under or eating up some of the card’s value in shipping costs is better than overspending in the store.

Spend it offline.  Even if you choose to spend your card in person, doing some online research in advance can help you stay on budget.  You can check prices before you head to the store or restaurant to map out what you will buy when you arrive.  Having a list can help you stay focused amid sophisticated point-of-purchase distractions.

Give it up.  Although gift card neglect is declining, there are still tens of millions of gift-card dollars that are never redeemed online or in person. Don’t become a part of this statistic.  If you truly don’t want anything from the retailer in question, give the card to an individual or a charity you think needs or would appreciate it.

Trade it in. Consider selling unwanted gift cards through an exchange website like CardCash.com. Such sites let you sell gift cards and receive a portion of its face value by check, PayPal or direct deposit into your checking account. They also allow you to trade your cards for other cards that you prefer, say, an Amazon gift card, which gives you a wider array of items to choose from.

Talk about the gift that keeps on giving.  Imagine that someone paid $100 to give you a massage gift card and you turn around and sell it online for $80 bucks.  You’ve got some cash, someone else has gained the full value of the gift card at a discount, and a third-party has earned a commission.  Alas, none of this is what the giver had in mind.

Questions: Do you prefer receiving gifts, gift cards or cash? Have you ever tried a gift-card exchange service? What’s your advice for spending gift cards wisely?

Please scroll down to post your thoughts below or post your own question for the column in the sidebar to the right.  Thanks!