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Lifehack: Buy Yourself Gift Cards to Earn Rewards and Snag Discounts

There’s a problem with obligatory seasonal gift giving: it’s inefficient. I’m not on an ideological crusade here; this is from the mouths of economists. This is the time of the year when we all go to great lengths to buy each other stuff that we are grateful for but probably didn’t want (“It’s the thought that counts I guess”).

Or worse: we buy each other gift cards.

Prepaid gift cards are a favorite among those who “get it.” If you wanted something, you would’ve bought it yourself, right? So, here’s a gift card. Go nuts. I wash my hands of whatever purchasing decision you make. To the gift giver, it’s a little bit better than handing someone a wad of cash. For the recipient, it’s a little bit worse. Now, you’re tied into buying something from that particular retailer, preferably for that specific amount. There’s nothing worse than having a $1.24 balance on a Best Buy gift card. It usually means I end up forcing myself to buy something overpriced there that I don’t really need.

As you probably suspected, billions of dollars of unused gift card balance stay on the books every year. It doesn’t help consumers, and it doesn’t help retailers either (they have to keep track and report it as liabilities on their balance sheet).

And don’t get me started on prepaid debit cards from the likes of Visa, MasterCard, Chase, etc. and their monthly maintenance fees. It’s like gifting someone a leaky bucket of quarters. “For every month you don’t spend this, you lose money!”

Yeah, gift cards are a drag.

So, this year, don’t buy gift cards for your friends, family, and coworkers. Treat the one you really love.

That’s right, buy gift cards for yourself.

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Giant Eagle promotes using eGift Cards like Cash

How to Launder Gift Cards for Fun and Profit

If you are clever, you can use gift cards to make a slight profit. How? Buying gift cards for yourself and using them immediately. In this way, you can reap the benefits of any promotions—like cash back rewards on your credit card or grocery store fuel discounts—while paying for things you were already going to spend money on.

For instance, I live in Pennsylvania, and every year, the regional grocery store chain Giant Eagle offers $0.20 off per gallon of gas for every $50 you spend in gift cards. They sell gift cards for hundreds of retailers, like Amazon, Best Buy, Netflix, and Hulu. So, when I bought a TV and an Apple TV on Cyber Monday, I first gifted myself $300 of Best Buy bucks and cashed in a $1.20 per gallon discount.

You can even buy yourself gift cards for things you don’t need to pay for now but will use later. For example, I’ve subscribed to Netflix for years already, but I still gifted myself some Netflix credit to get the Giant Eagle GetGo FuelPerks. I bought the gift card online; they emailed me the redemption code, I logged into Netflix and applied the balance to my account. (Click your profile, then Your Account then scroll down to Gifts & Offers.)

And because I bought this with my credit card, I earned points on that, too. I was already paid up on my Netflix account, so the gift card balance will just go toward my future bills.

All this took me less than five minutes.

Cash in Prepaid Debit Cards for Gift Cards that Don’t Have Fees

This trick works if you are the unfortunate recipient of a prepaid debit card, too.

I am an Amazon Prime member, so I buy stuff from Amazon like all the time. I get diapers and cleaning supplies and cases of bread flour every month. I’m guaranteed to spend at least $50 on Amazon every month. So, if I get a prepaid gift card as a rebate or a gift and it’s one of those leaky debit cards, the first thing I do is apply it to my Amazon balance. To do this, pop on to Amazon and buy yourself an Amazon gift card for the exact amount you want. Deliver it via email to yourself. Pop back onto Amazon and redeem it and then happily shred that prepaid gift card.

You can do this for other services that you use a lot, too, like iTunes or Starbucks. There’s really no excuse to let prepaid debit cards linger.

And don’t worry about your Amazon gift card balance expiring. Amazon gift cards purchased after October 2005 never expire. I can attest to that. One year, TurboTax was giving out part of your tax refund as an Amazon gift card, and I made a grievous withholding error (don’t ask) that previous year and ended up getting over $2,000 in Amazon gift cards. It took me quite some time to use up all the credit, but I did eventually. So don’t be shy about pumping up your Amazon gift card balance.

One caveat: You can’t use Amazon gift cards to buy other gift cards. So, you can’t cash in an Amazon gift card to buy like an Olive Garden gift card.

Conclusion

I use the term “gift card laundering” playfully here. I’m not really proposing that you say, launder your illicit protection racket earnings through Amazon gift cards. But if you want to earn reward points and get discounts without saddling someone with the burden of carrying around a gift card in their wallet, then buying gift cards for yourself and using them right away is the way to do it.

Is it illegal? Is it unethical? After all, this isn’t what the card issuers and retailers intended.

To that, I say, eh, not really.

Think of all the ways that credit card companies and banks try to trick us on a daily basis with their adjustable interest rates, introductory credit card rates, confusing terms, and those deathly “superchecks” for your credit card account with astronomical interest rates.

If you save a few bucks here and there while zeroing out inefficient gift card balances, then I think there’s no harm done. It’s not like you’re getting free flights by buying skids of pudding.

And if the retailers find that they are losing money with gift cards (and I don’t think they are…), then maybe they’ll do us all a favor and put an end to them altogether.

Got a gift card tip? Share it in the comments below. 

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