January 11, 2013 | by David M. Taube
New Year: Time to jump in the card pool?

Is saving money one of your resolutions for the New Year? Then perhaps it is time to jump in the card pool by purchasing gift cards at a discount. Gift card exchange web sites such as Card Pool (www.cardpool.com), Plastic Jungle (www.plasticjungle.com), and ABC Gift Cards (www.abcgiftcards.com) sell discounted gift cards from hundreds of retailers. The wide variety includes home improvement (Home Depot, Lowes), drug (CVS, Rite Aid), electronic (Best Buy, Apple), big-box (Wal-Mart, Target), and department stores (JC Penney, Macy’s).

The websites pay up to 92 percent for unwanted or unused gift cards and then re-sell them at discounts ranging from 2 percent to 35 percent. There is no sales tax and shipping is free; electronic gift cards are also available. An abundant selection of cards is now available as they are cashed in after the holidays.

Some items to consider when purchasing discounted gift cards:

Only purchase cards from stores where you actually shop and that sell items you really need. Otherwise, you will end up with cards collecting dust and be in the same position as the person who sold them to the exchange web site.

Only purchase cards from web sites that sell cards with no fees and no expiration date.

Check out the guarantee program to determine the policy for returns and card value (read the fine print!). Cardpool guarantees the card will be valid at the merchant and to the dollar amount specified for up to 100 days from the date of purchase, up to a maximum of $1,000 per customer. Plastic Jungle offers a guarantee for 60 days from the date of purchase and up to a maximum of $1,000 per customer. ABC Gift Cards has a 45-day return policy for invalid cards or balance discrepancies.

Confirm the value of a card upon receipt by calling the 800 number on the card, entering the code on the retailer’s web site, and/or take it to the retailer.

Finally, to get a triple-bonus on top of your discount, use a credit card with a cash back or rewards program to purchase the gift cards, buy items that are on sale at the store, and use a coupon!  Happy shopping and saving at all those post-holiday sales!

(This article is for informational purposes only and is not financial, legal or tax advice. Please consult with your adviser before making any decisions.)

David M. Taube, CFA, CFP is CEO & Chief Investment Officer of Kalorama Wealth Strategies, LLC, a fee-only investment advisory and financial planning firm in the District. Reach him at 202-550-7262 or dtaube@kaloramawealth.com.

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