You may never have thought of doing this yourself, but did you know that it’s actually legal to issue your own money as an alternative to the U.S dollar? It’s not, however, recommended to do so unless it’s explicitly designed to be a local currency; you can get into serious trouble with the law if your pseudo-dollars are used for fraud, tax evasion, or money laundering.
In fact, these are some of the problems casinos have to be concerned about – those plastic chips are, in a sense, a private currency and often much-beloved by criminals. You can find similar examples of non-governmental money nearly everywhere you look: rewards points from cashback programs, cryptocurrencies, airline miles…and of course the gift cards offered by numerous retail companies.
Table of Contents
- 1 How to Make Money From Gift Cards?
- 2 Look for New Gift Cards at a Discount
- 3 Buy From People Who’ll Never Use Them and Sell Gift Cards for Money
- 4 Find Gift Cards for Free
- 5 Keep Track of What You Have (And Until When)
- 6 Avoiding Gift Card Scams and Pitfalls
- 7 Can You Sell Gift Cards for Money and Actually Make a Profit?
How to Make Money From Gift Cards?
The key feature of all these “private currencies” (loosely defined) is that they can in some sense be exchanged for real legal tender. With something like a money order, the process is totally straightforward; with loyalty points, you may need to jump through a couple of hoops. Gift cards fall somewhere in the middle. For instance, whether they’re printed on cardboard, come in the form of a pre-paid credit card, or are no more than software in your phone, gift certificates are usually not assigned to a specific person. You can therefore sell gift cards for money and let someone else use them at the actual store or for online purchases. They are also used by many retailers as a marketing tool and often come with special offers attached, getting you a better deal than paying in cash.
If you’re interested in learning how to make money from selling gift cards, the good news is that this is certainly possible – perhaps not as a full-fledged side hustle, but certainly as a way to get a few extra bucks occasionally. You do, however, have to do your homework. A small number of cards carry expiration dates, extra fees, or other restrictive conditions set by the company that issues them. Laws in your state may also complicate matters. Fraud is another concern, not only for these retail companies but also for people who earn cash by selling gift cards for money. If you’re willing to learn the ropes, though, you’ll have the advantage compared to people who do this only casually. Eventually, once you know what to look out for, you’ll be able to trade them almost automatically, meaning that the small profits from individual sales can start to snowball.
Look for New Gift Cards at a Discount
One piece of business advice that’s probably been in fashion since the time of Moses is: “Buy low, sell high”. It applies equally and perfectly to how to make money from selling gift cards, company stocks, Halloween costumes, refrigerators – it’s one cliché that’s worth listening to.
Why, then, would a company sell customers a gift card for less than the face value for which it can be redeemed? There are basically three reasons:
- It’s good marketing, as well as a way to lure in customers who’d otherwise never visit their store, looking for a gift for someone else.
- Most people who use gift cards end up spending more than the voucher amount.
- Companies don’t need to pay interest on what is effectively a loan from the consumer to the retailer. Until the card is redeemed, they’re free to use that money to generate profits.
The easiest place to find these discounted cards is third-party websites like Raise, GiftDeals, Sam’s Club, and Gift Card Granny. You can find gift certificates from thousands of brands, though discounts are usually under 10%. If you really want to find out how to make money from gift cards, you’ll need to learn how to buy pre-owned cards from private sellers.
Buy From People Who’ll Never Use Them and Sell Gift Cards for Money
According to statistics, a quarter of all gift cards issued aren’t used within a year; 10% are never redeemed at all. Sometimes, this may be because the company that is supposed to honor them goes out of business. Often enough, though, the problem simply comes down to either inconvenience or forgetfulness. Some gift certificates, for instance, can be used only either online or off – the latter kind is of little use during a lockdown, while many people still distrust internet stores.
Don’t underestimate just how much cash this represents: about two in three out of all gifts bought in the U.S.A come in the form of certificates, amounting to well over $100 billion per year. 10% of that is approximately how much it costs annually to keep American troops in Afghanistan, and this is simply transferred from the pockets of consumers to companies.
Recognizing this problem, several websites have sprung up (and sometimes disappeared, for instance, CardPool – this is a fast-paced, unpredictable business) that make it easy to buy or sell gift cards for money, or trade them for cards from a retailer you like better. Some of those mentioned in the previous section offer this service; you can also check out CardCash, GiftCardWiki, or any of the numerous services that make it easy to find coupons. When selling, you may be offered as much as 90% or as little as half of any given coupon’s nominal value. Likewise, available discounts when buying depend on many factors and vary widely.
The amount you pay under face value can be pretty impressive at times, and these websites have the further advantages of a good, searchable selection and (reasonable) security. At the same time, there’s nothing preventing you from advertising your cards and connecting with people on Facebook Marketplace, Craigslist, eBay, and similar second-hand trading websites. Bear in mind, though, that you’ll have to spend more than a few minutes on every transaction. The tradeoff between time and profit usually isn’t great when you buy and sell gift cards for money – if it takes you half a dozen emails to save 20% on a $15 gift card, you’re doing something wrong.
Find Gift Cards for Free
What, it’s raining free money? Sort of; as we’ve explained here (along with descriptions of how several websites that do this work), it’s certainly possible to get gift cards without paying a dime. Some ways of doing so include:
- Participating in market research, such as by filling out surveys,
- Joining loyalty programs,
- Sharing your online and shopping data.
Other sources of free gift cards include the desk drawer you haven’t opened since January (who knows what you may find?) and family members who don’t want to spend time selling the gift cards they don’t ever plan to use. Don’t neglect this avenue: the average American has over $100 in vouchers lying around. Some credit card rewards and cashback programs can also be redeemed for gift cards but aren’t truly free – you’re generally just choosing gift certificates over cash.
For a novice at selling gift cards for money, looking for free ones has one big advantage: you don’t need to invest and risk any of your own cash to get started. Buying a gift certificate at a 50% discount may seem like a great deal, but why is the seller offering such a good price? Perhaps it’s from an unpopular brand and therefore difficult to unload, maybe it’s not valid in your region, it could be that it’s about to expire and has to be sold or used quickly. There is no guarantee that you’ll be able to sell one of these for more than you paid – unless, of course, you paid nothing for it.
Keep Track of What You Have (And Until When)
Once you’ve acquired a decent portfolio of gift cards, the next step is to sell them for more than you paid. Remember that prices vary over time, so you may have to hold on to some of them until you can make a profit – or be forced to sell them in order to avoid a larger loss. If one reaches the expiration date, you lose it completely, while others start deducting inactivity fees after some time.
For this reason, it’s a good idea to keep an eye on them using a spreadsheet somewhat like the following:
You can use this to periodically scan through various platforms to see what specific gift cards are going for these days. Some are more or less evergreen, others rise in value before holidays, while the value of many fluctuates unpredictably.
On some gift card trading platforms, like Gift Card Granny, Raise, and of course Craigslist, you can also specify a fixed price. If someone is willing to pay that much, the transaction goes through. This may take longer but potentially earns a better profit.
Avoiding Gift Card Scams and Pitfalls
Sadly, the gift card reselling business is rife with con artists. Especially when using a relatively insecure platform like Facebook Marketplace, you should approach every transaction with a healthy dose of cynicism and common sense. More trustworthy trading websites, of course, charge a commission of around 5% to 15%, but the tradeoff is very much worth it for many people.
- It’s illegal for companies to sell gift cards that expire sooner than 5 years from activation or charge inactivity fees unless the card hasn’t been used for at least 12 months. These sound like generous grace periods but do make sure you check with any seller before handing over money.
- Scam artists pretending to work for the police, IRS, utility companies, or whatever are notorious for asking for payments of “fines” in the form of untraceable gift cards. This is a crystal-clear sign that they are not who they claim to be.
- If a paper gift certificate has a PIN number no longer concealed by scratch-off material, it’s unsellable.
- Many companies have an online service you can use to check the balance remaining on any of their cards. If buying gift cards online from someone you don’t know, this check should be routine.
- Credit card rewards can often be converted into gift cards, but you can usually get more money back by choosing some other option like a discount on plane tickets.
Can You Sell Gift Cards for Money and Actually Make a Profit?
The short answer to this (otherwise we wouldn’t have bothered writing this article) is “yes”. Still, you should really take a hard look at more lucrative side hustles before you commit a lot of time to learning how to make money from selling gift cards. Don’t expect to earn millions.
Let’s say you buy a $40 gift card for $30 and sell it for $35. If the entire process costs you 30 minutes, you’re earning ten bucks an hour while risking your own money doing so. In practice, your profit on each card will probably not exceed $3 – though, online, you may be able to buy and sell gift cards for money much more quickly. If you only work with digital gift certificates, you don’t even need to wait for them to be mailed to you.
This is not to say that some people don’t make a significant amount with gift card trading. It’s just a fact that anyone with some special skill probably can find a better way to earn. On the other hand, you can get started with card trading without investing much at all, and this may be a good way for you to get your feet wet with “flipping” other kinds of products online.