The 7 Best Ways to Use Gift Cards

1. Treat a Gift Card Like Cash

People often throw their gift cards in the back of their wallet or a drawer and forget about them. Would they do that with cash? Thinking of your gift cards as cold, hard cash may motivate you to spend them. Because, really, that's what gift cards are—pure money, only in the form of a piece of plastic.

2. Don't Let Your Gift Cards Collect Dust

The longer you hold on to a gift card, the more likely you are to forget you have it. There's nothing wrong with saving a gift card for a special occasion or a rainy day, but if that's the plan, write a note to yourself on a calendar or set up a reminder on your phone to use your gift card.

What you don't want to happen is to go shopping or eat at a restaurant only to later remember that you could have used your gift card but instead spent your own money unnecessarily.

3. Don't Spend Your Gift Cards Too Fast

While you don't want to hang on to your gift cards for too long, it's not necessary to rush out the door within 24 hours to spend your gift cards either. You don't want a gift card to fuel impulse shopping; instead, you might benefit from thinking about what you'd really like to purchase with it. Consider the card and the gift giver: Depending on the gift card, the gift giver may have been hoping you'd use it to splurge, and sooner rather than later.

4. Spend Your Gift Cards Strategically

If you look ahead on the calendar, you might be able to spot some weeks where you're likely to be low on cash and where your gift cards may be able to plug some holes in your budget. There may be other weeks where you know you'll have a lot of bills to pay, or you may be planning on making a major purchase, such as tires. Those weeks might be good times to eat out with a restaurant gift card or use a grocery store gift card to aid your food budget.

If you have a lot of gift cards, maybe you can use them and, with the extra money you save, put more towards paying down credit card debt.

5. Look for Sales on Items You Need

If you have gift cards that work at a wide range of retailers, take the time to look for sales, like at department stores, on items you need—or one you've wanted but haven't wanted to splurge on. Just to make the math easy: If you can find, for instance, a 50% off sale, your gift card will buy twice as much as it otherwise would.

6. Consider Regifting or Selling Your Gift Cards

There are reputable websites that allow you to sell your gift cards, like CardCash and Raise. The only thing to keep in mind is that you won't get the full value of the card when you sell it on a discounted gift card website. On the other hand, if you're confident you're never going to use the gift card, it's better to get some money from it than never use it.

Of course, you could always regift the gift card to somebody else who you think would like to use it.

7. Donate Your Gift Cards to a Charity

If you don't want to bother selling your gift card, you could pay it forward and donate a gift card to charity—and possibly write off the donation as a tax deduction, provided you itemize your deductions and the nonprofit is a qualified organization. It's always a good idea to discuss these matters with a tax accountant so you don't have any surprises when it's time to prepare your return.

A Few More Tips to Consider When Using Gift Cards

Besides planning to use your gift cards soon after receiving them, here are some best practices you'll want to remember when using gift cards.

• If you were given a receipt, hang on to it. Sometimes gift givers give the receipt with the gift card, which is a good idea. There are plenty of stories of consumers purchasing compromised gift cards—that is, there is no money on them. If you become a victim of gift card fraud, the receipt might help prove that the store should honor your gift card.
• Take a photo of the gift card. Snapping a photo of your gift card's barcode and PIN can come in handy if you misplace it. While a digital copy may not work in person at a store or restaurant, it can allow you to purchase items online.
• Try to spend the entire gift card. If you are given a $25 gift card and you spend $22 of it, with only $3 left on the card, your odds of forgetting about the card will probably go up. Sure, we are talking $3, but wasting money is wasting money.
• Know the rules. Gift cards can eventually expire, so it's all the more reason to not toss them in a drawer. Fortunately, federal law states that a gift card can't expire for at least five years from the date it was activated. Still, you shouldn't hang on to gift cards indefinitely. In fact, some cards—like a Visa gift card—can also be charged a dormancy or inactivity fee if there has been no activity for a year. So if you have a $100 gift card, and a $5 inactivity fee is tacked on, you have a gift card worth $95.

The Bottom Line

Gift cards tend to only be complicated when the gift is something of a misfire—for instance, a card to be used at a store, restaurant or business you have little interest in. If you get gift cards that you want to use, your mission is clear: Think about what you'd like to purchase, and use the gift card sooner rather than later. It's a present that really should be used in the present and not far off in the future.