Giving gift cards for the holidays? Read this first

Millions of gift cards will change hands this holiday season as people search for quick gifts for their friends and family, but they aren’t as simple as they appear.

Because gift cards are more popular with givers than recipients, chances are good that the card won’t be wanted or even used. About half of shoppers said they plan to give gift cards this year, but only about one in four Americans said they actually would prefer one to an actual gift, Bankrate.com found in a recent survey. 

• For more tips on budgeting and spending for the festive season, see our Holiday Financial Guide
  

Because of that discrepancy, a market has developed for recipients who want to resell their unwanted gift cards, with sites such as Gift Card Granny and Cardpool acting as a clearinghouse between sellers and buyers. Before buying a gift card for a friend or relative, research which cards are worth the most in the resale market. 

While many shoppers will buy gift cards directly from retailers, buyers can save a few bucks by shopping at resale marketplaces instead. The exchanges for buyers include Gift Card Granny and Raise, according to WalletHub. Sellers are best off going to sites including CardCash as well as Raise.

Gift cards can also attract scammers, so it’s a good idea to shop at resale sites that provide a guarantee. Cardpool, for instance, provides a 100-day return guarantee, up to $1,000 per customer, and it guarantees that the card and its face value will be valid. 

Before selling unwanted gift cards, read up on a site’s policies on payments because exchange sites can have long payment periods, as NerdWallet has noted. As always, it’s best to avoid buying or selling gift cards with individuals or on sites without guarantees. 

Lastly, some stores will accept gift cards from other retailers, providing the equivalent value on their own in-house cards. Target (TGT), for instance, has a trade-in program that covers cards from dozens of other retailers, ranging from Abercrombie & Fitch (ANF) to Zumiez (ZUMZ). 

The best gift cards combine a high resale value, a decent discount for buyers as well as popularity among recipients, a WalletHub survey found. The top card for average resale value is Nike (NKE), with a $100 gift card selling for $93.66, on average. The lowest is clothing store H&M, with a resale value of $55.47 per $100. 

Below are the top 10 gift cards identified by WalletHub, which considered five metrics including average resale value per $100 face value. 

1. Target (average resale value: $81.88 per $100 gift card)
2. Netflix ($81.75)
3. Walmart ($83.94)
4. Amazon ($77.50)
5. Best Buy ($83.12)
6. Costco ($82.67)
7. Dunkin’ Donuts ($70.49)
8. TJ Maxx ($68.47)
9. iTunes ($60)
10. Starbucks ($73.85)