New Jersey recently put a gift card law into effect that is driving gift card retailers out of the state. The basic situation is that if a gift card goes unused for two years, the unspent amount is to be turned over to the state. Lawmakers say the law is in the best interest of consumers because they can reclaim unused gift card amounts via the unclaimed property database. But in order to do that, retailers must get consumer address information when a gift card is purchased. Seriously?

Kiosks Pulling Out of New Jersey

The net effect, so far, is that gift card kiosk companies like Blackhawk Network (think Gift Card Mall at Safeway) and InComm (think kiosk at Wal-Mart) are closing up shop, citing it’s too difficult to comply with the law. The governor says companies are just leaving because they don’t want to give up the profits and he’s not concerned about the exit. Regardless, as a consumer, I’d be upset.

Impact is Major Inconvenience

The law, designed to help consumers, makes life significantly less convenient both in terms or buying and recouping.

• Buying Delays – As if retailers don’t know enough about us already, the new law requires the cashier to ask for address information when purchasing a gift card. Assuming you don’t mind giving up the personal data, the checkout line will undoubtedly grow as the transaction is completed.
• System Change Costs – Stores all over the state will also have to change their payment systems to capture and house the data with the gift card purchase. The aforementioned kiosk companies say the cost of making those changes are too high and they are opting to cancel their programs instead.
• Kiosks Closed – With the kiosks closed, consumers will be unable to buy third-party gift cards when doing other shopping. If you want a movie gift card, you’ll have to stop by the theater to get it. If you want an AMEX gift card, you’ll have to get it online instead because they are no longer available in New Jersey stores. What a pain!
• Who Recoups? – So here’s the big deal for me. Who gets to claim the money? Suppose retailers and card companies go through all the cost and effort required to capture the purchaser of the gift card. Who knows where the card has gone? More than likely, it’s been given away as a gift. It’s gone! So the person who spent the money can’t get it back. And the person who has the gift card isn’t the one on record. I presume, you need a match in order to make a claim. Or, at the very least, you have to know where the card is. Can the giver get the money back? (Can I have the money back for the sweater I bought you last year that you never wear?)
  
  If the card hasn’t been used in two years, it’s likely the recipient has lost it or forgotten about. In which case, the person with the plastic won’t even know they can reclaim it. (If the sweater got thrown into the back of the closet, does he or she care that it’s missing?)
  
  This situation is flawed on many levels.

Federal Offense

Lastly, the Federal CARD ACT that went into effect in 2009 says gift cards can’t expire in less than five years and fees can’t be charged against the card unless its been inactive for over a year. So how does New Jersey justify stripping the card after two years?

Trying to Get a Piece of the Pie

For all the benefit and convenience that gift cards provide consumers, we often only hear the negative. And the criticism most often is about “breakage” – fighting over who gets the money when a gift card goes unspent. Though billions of dollars are wasting away in sock drawers, a good many more dollars are spent at the designated retailer. And since consumers often overspend their gift cards, the retailer benefits more from having a card used than having it go unused. Still, the issue of breakage is the primary focus.

Everybody wants to be the gift card ISSUER. Currently, this is the player who gets to eventually recoup the unused dollars allocated to the gift card retailer. Other companies are profiting from the multi-billion dollar gift card industry by providing secondary services such as Plastic Jungle and CardPool. Both buy unused gift cards and put them back on the market at a discount. And people like me make money on gift cards through advertising, creating gift card holders, and delivering them with a personal touch.

I understand the involvement of all these players and then some. What I don’t understand is how the state of New Jersey inserts itself into the gift card puzzle without any skin in the game. Seems to me they just want a piece of the pie without doing any of the work. Reminds me of a story about a little red hen.

Before Easter, I bought a $100 JC Penney gift card from Plastic Jungle for $84. Today I am reporting back on my shopping trip.

The Purchase

I used the gift card to buy the following Easter clothes for my two boys:

• Two pair of khaki pants
• Two Izod pastel shirts
• Two coordinating ties

The Savings

The grand total came to $100.05. I handed over the $100 e-gift card I’d printed on the computer and owed just a nickle more. Remember, however, that I REALLY only paid $84.05 for my purchase. And yes, I felt just a little smug as I strutted out of the mall with my double-digit savings. I’m no extreme couponer, but am pretty proud of myself when I create a deal using a little smarts.

Worth the Effort

Because I already planned to shop JC Penney for Easter clothes, taking a few minutes to order a discount gift card before making the trek is like flipping through the ads before walking out the door. The process is simple. And if you order e-gift cards, the gift cards arrive the same day. These are the sites I regularly use.

Think Ahead

The holidays aren’t the only time you’ll likely have some pre-planned shopping to do. There’s “back to school” time, spring break, and summer vacation that will likely spur shopping as well. Think ahead and consider purchasing discount gift cards to ease the financial burden during these times of the year.

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If you’re planning to buy a new Easter dress, have a birthday gift to purchase, or are in the process of updating your home decor for spring, then check out these deals on gift cards. Plastic Jungle, one of the many gift card exchange sites, sells gift cards for less than face value. The discount offered depends on the popularity of the card. But in many cases, you will save at least double digits.

Through March 30th

While supplies last, take advantage of the following offers:

• Save 13% on JC Penney gift cards
• Save 9% on Old Navy gift cards
• Save 9% on Banana Republic gift cards
• Save 12% Kohl’s Options gift cards
• Save 16% on Anthropologie gift cards
• Save 6% on Best Buy gift cards

Follow my lead

I just ordered a couple of e-Gift Cards from JC Penney. I had already planned to shop there for my boys’ Easter Sunday clothes. Since I am able to get these cards quickly (don’t have to wait for the plastic cards to arrive in the mail), I decided to buy two for my upcoming shopping trip. I feel pretty good having done this because I often shop that store for my kids. This way I know I’m getting a deal before I even head to the register.

In the market for some new duds from Anthropologie? Then do yourself a financial favor and start your shopping at Plastic Jungle first. (PJ is one of my favorite websites for buying and selling used gift cards.)

On March 13th/14th, Plastic Jungle is selling Anthropologie gift cards at a 16% discount.

(No code required. Just click the link above.)

One for Me…One for You

I did a quick check on Plastic Jungle to see what gift cards are available. There are several, but most are in the $200-$300 range. If that’s a little steep for your budget, remember that you can split the discounted gift card from Plastic Jungle into smaller (full value) gift cards at the store.

Here’s how:

• Brainstorm upcoming gift needs such as birthdays, Easter, Mother’s Day, Graduation, etc.
• Buy the highest dollar Anthropologie gift card you can afford at Plastic Jungle.
• When the gift card arrives, go to Anthropologie.
• Do your personal shopping.
• Buy new (smaller denomination) gift cards with whatever money is left over.

Although you bought the gift card at a discount, it’s still worth the full face value. So buy a $325 Gift Card for $273. Spend $225 on yourself and get a $100 gift card for someone else.

Worth the Effort

Yes, it takes a little extra effort to buy discounted gift cards before you go shopping, but a 16 percent savings cannot be ignored. While you’re at Plastic Jungle, look for savings at other stores you like to shop. Some gift cards are even available electronically, so you don’t have to wait long for the discount to arrive.

Gift cards are great, if you get the one that you want–or at least one you know you can use. But if you know immediately that this is one you are not likely to use (ever), then do something about it right now! Don’t stick it in your wallet for months hoping to feel differently, trade it in for another card or for cash.

Exchange Unwanted Gift Cards

There are many ways to turn a gift card into cash. You won’t get the full value of the card, but getting a high percentage of cash back is better than holding the card indefinitely and getting nothing. Below are two gift card swap sites I’ve used personally:

• Plastic Jungle: Sell your gift cards for cash! Get up to 92% of the balance. You can opt to get paid by check, PayPal, exchange for an Amazon.com gift card.
• Cardpool.com: Sell Your Gift Cards For Cash at Cardpool.com! You only receive payment by check, but you can actually sell the gift card electronically–meaning you can cash it in without sending the physical card.

Sneaky Alternative

If you received a gift card to a store that has a kiosk, then go to the store and use your gift card to buy a new one. For example, if you received a Michael’s Craft Store coupon and you’re crafted out from the holidays, go to Michael’s anyway. But a new gift card from their kiosk and pay for it with the Michael’s gift card. Totally works. Totally legit. More legwork than using a swap website, but you get full value for the card.

And don’t forget to check out my other advice: Eight Ways to Use Your Gift Cards.

What is STILL in your wallet?

So out here in California, the clocks are turned forward, the tulips are pushing their way up, and my husband is engrossed in the Big Dance. I love this time of year. The rain still catches me off-guard but it’s mixed with enough sunshine to get my tennis game on. Love it.

But This is Madness

The holidays are well behind us and I’m betting that you still have gift cards in your wallet from Christmas. Be honest with yourself. If you haven’t used three-month old gift cards by now, my friends over at Tango Card say you just might not use them at all. And that’s silly. It’s Madness really!!!

Stop the Madness

So crack open your wallet or that secret gift card hiding place in your drawer and get to work. While watching the Final Four, you have time to do the following as well:

• Get organized. Download the Tango Card app and enter the gift cards you still plan to use. This handy app will send you reminders and let you check gift card balances (my favorite part).
• Go shopping and use the gift cards you have. Seriously. Or send them to me and I will. Lots of great spring sales out there.
• Cash ‘em out. Why hold on to gift cards that you’re not going to use? Go to one of these after-market gift card sites and sell your unwanted cards for cash. You may not ever use those gift cards, but I’m pretty sure you can find a way to use the cash. (Or send it to me and I will.)

Now let’s not have this same conversation in another few months. If you have gift cards, track ‘em, use ‘em, or sell ‘em. Don’t let well-intentioned gifts sit in your drawer another day. It’s time to stop the madness.