My mom loves gift cards. When she can’t get them through her credit card rewards or Swagbucks, she goes to discounted GC sites and delves into the savings.
Me? I’ve mostly shied away from them. Because there are some major dangers when it comes to discounted gift cards.
Access to your money
First of all, you risk tying up a lot of money in future spending.
When there’s a really killer sale, it makes sense to stock up big time. It’s great savings… in the long-run.
In the meantime, you’re dealing with the sting of a bigger credit card bill. If you really went crazy, you might have to take a little out of savings.
Yes, the money is recouped over time. But for now… ouch.
Sure, you’re saving a lot of money in the long-term, but you have to cope with the financial sting now. That can hurt, both your budget and your financial sensibilities.
Second, you can start to look at it as free money.
Some days you don’t want to cook. Other days, you don’t want the leftovers or convenience food that’s already at home. Then you remember your restaurant GC. The money’s already spent, so why not indulge now?
Well, because you bought the restaurant GC for special occasions, not for when you just aren’t “feeling” the food at home. It was supposed to go to date night or a night out with friends or just generally something other than indifference to what’s in your fridge/cupboard.
More expensive indulgences
Oh, but maybe you would’ve eaten out regardless. That justifies it, right? Meh, probably not. Being the frugal person you are, you might have found a more money-wise compromise.
If you have a movie theater GC, you might go for a new release instead of heading over to the cheap hour — or Redbox.
If you have a sit-down restaurant GC, you’re less likely to just get some fast food (or a pizza that will at least provide a few meals).
The discounted GC is a sunk cost. The money isn’t coming out of your pocket today, which can skew your perception of value. Paying $7 from general funds can somehow feel more expensive than using up a GC you paid $20 for.
With one spouse being bipolar and the other having extreme ADD… Well, we double down on things a lot. We go through phases when we almost exclusively eat at a certain fast food joint. But because of that, we burn out on it for months.
Heck, one of the places Tim loved before the oral surgery is still a no-go. The crust is pretty thin and crisp, and he’s having trouble chewing it properly.
In other words, there’s an inherent danger on our loading up on too many gift cards for specific restaurants. We could end up with a lot of money tied up in gift cards that won’t get used any time soon.
Not to mention that for Tim tends toward the sunk-money mindset.
For a while, we got a deal at Costco for Smashburger. (It’s not a huge chain, so don’t worry if you’ve never heard of it.) For $80, we’d get four, $25 GCs. Which is, theoretically, great savings.
Except that Tim would keep defaulting to that place because we had the cards. Which is a problem when the meals are generally $2-3 more than most other fast food.
Eventually, I realized that the $20 savings were quickly being nullified. (Which was, luckily, wasn’t too long before he burned out on the place for a few months.)
You have to read carefully
I recently bought some PetSmart gift cards. We generally get the pet food — mainly because we inevitably underestimate how soon we’re going to run out of dog food. By the time we realize we really need that food, it’s too late to get it shipped to us.
Instead, I just go online to PetSmart and choose same-day, in-store pickup. Which also means lower prices. Because despite them presumably pulling the bag off the same shelves I’d be using in-store, I get charged less for buying online. Which is a rant for a whole ‘nother day.
Plus I use Mr. Rebates for the purchase, netting even more savings.
The system is the best of both worlds. I thought I’d make it an even better deal by snapping up some discounted PetSmart GCs. Alas, I didn’t read carefully. PetSmart doesn’t allow you to use GCs for online purchases. (Another rant to add to the list.)
Which means we’re paying higher prices, which means the discounted GCs don’t go as far. I did the math, and we’re still saving a little. But not enough to have tied up $85. Especially because it’s easy to forget to bring the card with you if you’re dashing out the door to take care of a pup with tummy-rumbles.
Despite all of the issues above, I realized that these days I’m a lot less antsy about tying up funds. After all, Tim’s teeth are done and paid for, so I won’t have to worry about dipping into the emergency fund just because I favored long-term savings.
Still, it’s good to start small.
So I went for a GC I could redeem immediately: Hulu. We saved $10 on a six-month subscription. I just added it to my account, so it’ll be applied automatically. And $40 isn’t going to make too big an impact on savings/general funds.
Next, I went a little further into the future to Tim’s birthday. It’s the 19th, so I was buying for less than a month ahead of time.
I knew we’d be seeing Rogue One, so I invested in some Fandango and AMC Theatres GCs. (AMC is in-person only, and I want to be able to book our seats online. Hence the Fandango GC.) Each one was $21 for a $25 GC.
I was initially worried about leaving $1 on a Fandango GC, but then I realized that, even if the $1 did get lost and never used, I’d still have saved $3. Seemed like a safe bet to me.
The AMC gift card won’t get used up in one visit, mind you. But it’ll take some of the sting out of popcorn and a soda for the next two or three movies.
So on Black Friday, I was ready to get a little more ambitious. Raise had a $10 off $100+ offer that day, so I got $125 of PETCO gift cards for $107.13.
It seemed like a lot, and I was a little anxious when I made the purchase. But Pandora’s food is ridiculously expensive — and she’s a growing girl — so they’ll get used up within four months. It’s not too far into the future, but I still get the satisfaction of the savings.
Do you guys use discounted GCs? What’s your success rate? Anyone know if you can use Walgreens GCs for prescriptions? Because if so, I’m ALL over that!