This article was updated on February 13, 2015.
Millions of Americans received gift cards over the recent holiday season, with the National Retail Federation having predicted that the average shopper would spend almost $173 on gift cards for the holidays in 2014, up 83% in just over a decade. But many people who receive a gift card have no interest in shopping at the store that issued it. If you know you'll never use a gift card, the challenge is figuring out what to do with it. Fortunately, though, there are ways to turn unwanted gift cards into cash. Let's take a look at three of them.
1. Sell them at an online auction website.
One option you have to get rid of unwanted gift cards is to offer them up for sale or auction at an online marketplace like eBay (NASDAQ:EBAY). Often, you'll be able to find bidders willing to make offers to buy your gift cards, although the quality of those offers typically depends on the store that issued the card. For stores with a lot of demand, you can expect to get 80% to 90% of the face value of the gift card at auction, and in limited circumstances with the most popular stores, you'll get even closer to the full face value.
With online marketplaces, though, you have to be sure to take the fees associated with selling into account. For instance, on eBay, you may owe a fee just to post a listing, and if the gift card sells, then you'll have to pay a final value fee that for most categories is currently 10% of the total amount of the sale. That 10% off the top can eat into your profit. By contrast, using a service like Craigslist can save you a bundle in fees, but you won't necessarily get the same amount of traffic you'd get at eBay.
2. Sell them through a specialized gift-card exchange.
In response to the demand for ways to trade unwanted gift cards, specialized gift-card exchange websites have sprung up to help facilitate transactions. Sites like Cardpool, CardHub, and Gift Card Granny all make it possible for you to sell gift cards and get a certain percentage of their face value back in cash. Again, how much you'll get depends on the popularity of the card, and because these gift-card exchanges also cater to customers who want to buy gift cards at a discount, you can generally get a good idea of the prevailing rates for a certain store's gift cards just by looking at recent transactions.
With gift-card exchanges, you typically won't pay explicit fees to sell your cards. Instead, the price offered for your card will already reflect the cut that the exchange will take for your card. For instance, for a card from a well-known discount retailer, one service offered to pay $0.67 on the dollar to those who wanted to sell their gift cards, but set a price of $0.85 on the dollar to customers who wanted to buy the cards from the exchange. That $0.18 is potential profit for the exchange, as long as it can find willing buyers and sellers.
3. Trade them with family and friends who want your cards more than the ones they got.
Maybe the easiest way to deal with unwanted gift cards is to find someone who has a gift card that you'd rather have and who'd be willing to swap with you. The advantage of this method is that you don't have to worry about any transaction fees or payments to intermediaries -- it's just a matter of swapping the cards and perhaps paying some extra cash to make up for any disparities in the face value. The disadvantage, though, is that it can take time to find someone willing to take your card, and you also need to be careful not to offend the person who gave you the original gift card in the first place.
In the end, gift cards aren't always as valuable to the person who receives them as a simple check would be. But even if you get a gift card you'll never use, you can still unlock a significant portion of its value, thanks to these three options.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends eBay. The Motley Fool owns shares of eBay. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.