Savings Strategy: My discount gift card experiment

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NEW YORK (AP) — “Delivered.”

The notification and the bright green address bar on the Web browser gave me peace of mind in the midst of the hectic buildup to Christmas. My niece’s present arrived at her home in a suburb near Pittsburgh, five days after I purchased it online.

One down, 13 family members to go.

With a large family and a limited gift fund, it’s always a challenge to buy presents for everyone without breaking the bank. This year, I decided to try using discounted gift cards to do my shopping, in the hopes of squeezing a bit more out of my tight budget.

THE STRATEGY

Websites that let users buy and sell store-branded gift cards have been around for a few years. The idea is simple: individuals who have unwanted cards can sell them and get some cash back, while fans of those retailers can benefit from some discounted purchasing power.

My strategy was to buy discounted cards to use myself. By combining them with store sales, free shipping codes and cash-back rebates, I hoped to maximize my savings.

I visited GiftCardBin.com and PlasticJungle.com and found cards for a few stores I expected to shop in: Williams-Sonoma, Lowe’s, Macy’s and PetSmart. I spent a total of $223.93 for cards worth $243.71, immediately saving 8 percent.

As the total value indicates, resale cards aren’t always unused, which makes them less-than-perfect as gifts. Most people would hesitate to give someone a gift card with a face value of $200 but a balance of $177.67, for instance. But paying $151.01 for that card — 15 percent off — is an ideal way to start the shopping experience in my view. (That was the deal for a Coldwater Creek card I decided not to purchase, but is typical of the type of discounts that are available on these sites.)

— FIRST PURCHASE

The $25 PetSmart card I purchased for $22.50 on PlasticJungle.com was an e-gift card, meaning there was no physical card. I received an email just a few minutes later with the code I needed to use it.

Once it arrived, I was ready to start shopping for supplies my niece uses to care for her two pet chinchillas, Scoot and Mika.

My first stop online was Ebates.com, a cash back site. Sites like this provide links to store websites, and reward shoppers with a percentage of their purchase, sent by check on a quarterly basis.

Ebates had an offer for 8 percent cash back on purchases made on PetSmart.com, so that added another $1.76 to my savings. I spent $22.07 for bedding and a little house-like structure for the critters to chew on. (I’d been informed chinchillas like to chew.)

THE MISSTEP

I jumped at the PetSmart card without looking at the site first. I only later learned there was no free shipping code for small purchases on the store’s site. So I had to pay $5.99 for shipping.

My total came to $28.06. That meant pulling out a credit card (with cash back rewards, of course) to cover the $3.06 overage.

The shipping charges reduced my savings significantly. Factoring in the Ebates rebate, I spent a total of $23.80, or 15 percent less than the full purchase-plus-shipping amount. If I had a free shipping code, I would have saved 19 percent. Plus, I’d still have $2.93 left on the card.

Still, 15 percent is a significant savings on items that rarely go on sale.

— SECOND PURCHASE

Next on my list was my Dad. I wanted to use the $100 Macy’s card I bought on PlasticJungle.com for $93 to buy his gift.

I headed back to Ebates and clicked on a 6 percent cash back offer that led me to Macy’s website.

The department store had a sale on the SodaStream soda maker I’ve been eyeing for Dad. The $40 off the original price of $139.99 amounted to a nearly 29 percent discount. No shipping charge this time, but with tax, the total came to $105.99, so I again had to pull out my credit card. The 6 percent Ebates rebate, however, covered the amount in excess of the card’s value.

So my total savings on this item was about 33.5 percent. That’s more like it.

LESSONS LEARNED

This experiment has had positive results so far, and I still have some shopping to do at Lowe’s and Williams-Sonoma.

And I’ve learned a few lessons along the way.

Next time, I’ll do a little online window shopping before I purchase a discounted gift card. It’s definitely worthwhile to check out what stores offer free shipping before committing to a retailer by purchasing a card.

It’s also a good idea to make sure there are cash back options on one of the rebate sites to add to your savings. For instance, I wasn’t able to find any cash back offers for Williams-Sonoma. I might have been better off searching for a gift card for another store that specializes in cooking gear for my sister-in-law’s gift.

My final lesson — it’s definitely worth waiting for a sale to compound the savings.

Still, especially for someone like me, who would much prefer staying home to bake cookies over battling the pepper spraying crowd for doorbuster deals at the local mall, discounted gift cards can definitely help stretch your holiday dollars.