Clark Howard: Don’t buy gift cards at their face value

Consumer expert Clark Howard’s column appears here each Thursday in conjunction with Deal Spotter, a weekly print section in The Atlanta Journal-Constitution.

Consumer expert Clark Howard’s column appears here each Thursday in conjunction with Deal Spotter, a weekly print section in The Atlanta Journal-Constitution.

ClarkHowardThe sale of gift cards is up significantly from last year. But how good of an idea is it to buy them?

The National Retail Federation says shoppers are expected to spend $28 billion on gift cards this year, up from $24.8 billion in 2010.

Yet my position on gift cards has never changed. If you buy “at par,” meaning you buy a gift card at straight face value, you have made a bad purchase. You’ve taken money that can be used anywhere and turned it into scrip that can only be used at one particular restaurant or retailer. If that place folds, you’re out the money. That happens way too often.

Of course, gift cards can make sense in some situations. I’ll give you an example: I bought an iTunes store four-pack of gift cards at a warehouse club because my mother-in-law wanted to give them to our kids. The pack was being sold for $84, not $100, so we got more than we paid out. (Atlanta Bargain Hunter: More gift card tips.)

Some restaurants and spas will give you more value than you pay for, too. But the failure rate among those businesses can be scary. So here’s my advice: When you get the cards, use them. Don’t let moss grow under your feet.

By following my simple rule — a gift card that is above par is good, while one at par is bad — you can turn what could be a crummy purchase into a good buy.

Meanwhile, when the holidays are over and you’re not sure what to do with unwanted gift cards you were given, there are several websites that will allow you to convert them into cash — albeit not exactly at face value.

Try, and According to, for example, sellers can typically expect to make about 92 cents back on the dollar.

-by Clark Howard, Save More, Spend Less, Avoid Rip-offs

Find more answers to your consumer questions, plus Clark’s new book “Living Large in Lean Times,” at Listen to his radio show live 1-3 p.m. Monday through Friday on WSB 750 AM and 95.5 FM.

12 comments Add your comment

Fish Bisch

December 22nd, 2011
11:29 am


December 22nd, 2011
11:31 am

This is all great info with which I agree completely. The only instance in which I buy gift cards at all (and preferably at a discounted rate) is when I know the recipient loves this organization but would probably use cash for paying bills instead of for a special indulgence. That said, it’s also nice at times to give cash when you know it will be used for paying bills — because that might be the best gift of all for the debt-straddled in this hard times.

Wade Davis

December 22nd, 2011
12:26 pm

I’ve used in the past and they were great all around.


December 22nd, 2011
1:24 pm

Some financially-troubled small businesses issue gift cards at this time of the year to get up-front cash that they desperately need to get by. When the house of cards folds early in the new year, they go belly-up. Beware.


December 22nd, 2011
1:31 pm

I’ve always wondered why anyone would trade versatile legal tender for a gift card. Cash can always accomplish what a gift card can. Thanks Howard for schooling’em on what really should be obvious.

☺☻Have A Smile!

December 22nd, 2011
2:09 pm

Cash can always accomplish what a gift card can.

You can’t use cash on eBay. Moving money to/from your PayPal account for eBay transactions is very slow. Using gifts cards is instantaneous.


December 22nd, 2011
10:50 pm

If you buy gift cards try to make sure they’re activated before you leave the store. Bought several @ HD that weren’t properly validated, only found out when the recipients tried to use them. Very embarrassing.


December 23rd, 2011
12:04 am

Wow I did not know site like this existed now I know were to go to buy a gift card.

[...] More than half of adults surveyed last year said they would like to receive gift cards as presents, and that number is growing year over year, the federation says. (Clark Howard tip: Don’t pay full price for gift cards.) [...]


December 23rd, 2011
1:36 pm

I’m just repeating what others have already said, but the only time you should buy a gift card is when you’re 110% absolutely certain the recipient will use it at the store or business it’s chained to.

As to what someone said how cash is more versatile that gift cards – this may be true, but more people shop online today than they did 5 years ago, or 10 years ago. If someone asked me if I wanted a gift card, I’d tell them to get me either an gift card, or Wal-Mart gift card. Since I shop at either store/website regularly, I know the gift card would be put to good use. Even if I don’t buy something physical or material, I can still use them for digital purchases, such as mp3s. With a Wal-Mart gift card, I can use it at the Murphy USA gas station in front of the Wal-Mart near my house, and save 3 cents per gallon of gas. Even if I had no plans to enter the actual Wal-Mart store any time soon, the card would still be put to good use.


December 24th, 2011
3:56 am

Please read the reviews on Plasticjungle before you use that merchant. Numerous reviews are posted all over the internet and aren’t rating higher than 1 star. Beware!


December 28th, 2011
3:07 pm

I would much rather someone give me a gift card to a store I liked rather than giving me cash. That way, I would use the card to buy something as a a gift that the giver had chosen for me. If I opened up an envelope that contained cash, I would most likely spend a little here and there and not even end up with something I could appreciate receiving