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The Pitfalls to Gift Cards and Ways to Protect Yourself

Ahh, the gift cards! We have a love/hate relationship. On the one hand, it’s hard to argue with saving 10% or more on things I plan to buy anyway. I’ve been a huge fan of Giftcardgranny and bought gift cards ranging from Olive Garden to Lowe’s, while saving a ton in the process.

On the other hand,  they can be a nuisance, for sure. You never know what your exact balance is unless you call and check on a regular basis. If you lose one, you may be out of luck, depending on the issuer.

I’ve seen Kendra write that she bought a Hyatt gift card and it was stolen from the envelope. When she called Hyatt, the agent said there was nothing they could do for her. Thankfully, the problem was eventually resolved and the gift card was reissued.

The point is: You have to be careful when dealing with gift cards whether it’s  Visa or store-specific kind. Let me tell you about my recent experience. Few months ago, I bought a $100 Wendy’s gift card at a 15% discount on Raise, a third party reseller.

When I got it, I checked the balance immediately, as I always do. Everything was fine, so I went on my merry way. Wendy’s gift cards can’t be used online, so I wasn’t worried about original owner depleting the balance.

I’m extremely cautious when dealing with gift cards like Walmart which can be used online. BTW, did you know that you can buy a Walmart gift card with a Walmart gift card and get free shipping? That’s what I always do. Plus, it’s nice to have the entire balance on just one card  (you can use up to five gift cards for your Walmart online order). It makes local store cashier way less hostile, I promise.

The discount on Walmart cards is usually small (3.5% or so), but since I don’t shop  at a grocery store, the savings do add up. Plus, I get to use my new credit card so I can get closer to my sign-up bonus.

Anyway, back to my story. The problem is, we don’t go to Wendy’s all that often, so the card was just sitting in my wallet. Oh well, we’ll use it eventually. Except, when I tried to do it, the balance was zero. Say what? I went home to check it online, and sure enough, nada.

So, I called Wendy’s to see if it was a glitch of some sort but the agent couldn’t really help me. Plus, this whole thing happened on Saturday, so she said she would forward it to the right department on Monday and they would call me back. I contacted Raise as well, and the agent said the same thing.

On Monday I got the dreaded news from Wendy’s rep. The gift card was purchased with a stolen credit card, so they cancelled it. At this point, there was nothing they could do for me. The only hope was that Raise would come through and refund it. However, this was unlikely to happen. Take a look at their refund policy:

raise gurantee



You have 60 days to get your money back, and in my case, it’s been 75 days. I pretty much resigned myself to the idea of saying goodbye to the $100. To my shock, I got an email from Raise the very same day. It said they investigated the matter and would issue a refund. They actually went beyond what was required, which is impressive.

How you can protect yourself

1) Make sure you read  return policy disclaimer when purchasing gift cards. Some retailers like Cardpool give you 100 days to get your money back.

2) Don’t buy gift cards that you can’t use within the next few months. So much can go wrong. That includes a possible bankruptcy of that specific retailer. Some cards like Amazon are great because you can unload them into your online account and all purchases will be deducted automatically until the balance is depleted. I also recommend you stay away from buying gift cards from individual sellers on Ebay. Too risky.

3) If at all possible, purchase small denominations, especially for dining establishments. Unless you get a smokin’ deal, it’s best to buy them as you go. Shipping is free, so no need to get a $400 Starbucks card and risk losing it.

While I don’t have any scientific proof, I believe you are more likely to overspend if you have a big balance on your gift card. It’s so much easier to justify buying  a desert or mixed drink when you have $400 to burn.

I told one of my friends about Giftcardgranny, and she literally went online and bought a ton of gift cards. Worse yet, she carries about $1,500 worth in her purse at all times. Some are for retailers that aren’t even in our area. Don’t be that gal/dude.

thumbs down

Image courtesy of stockimages at

BTW that’s a photo of my reader who goes by the name Cheapblackdude. Hmm, that sounds familiar…

4) Make sure not to use gift cards for major purchases like appliances and electronics. You lose out on credit card protection and a possible extended warranty. Amex cards are usually best, as they offer superior protection.

Few weeks ago, we had to purchase a new refrigerator. I would never consider using gift cards, not even if I could buy them at a substantial discount. Of course, being the OCD person that I am, I still checked. Alas, there were no gift cards to available through third party resellers, so it wasn’t an option. Instead, I went through shopping portal.

5) If you use your gift cards for online purchases, don’t discard them right away. The order may get cancelled and then you’ll have  to go through the nuisance of trying to find the original information. Instead, wait till you get your order in the mail.

6) If you (or your spouse) are disorganized, perhaps, it’s best to avoid them altogether. Several times now, I’ve seen McDonalds gift card fall out of my husband’s wallet and he didn’t even notice.  I also recommend you read this post on Doctor of Credit called The hiccups of gift card churning that outlines potential pitfalls of dealing with any type of gift card.

Mini rant: Two years ago, he (not the “doctor,” but my husband) left a brand new iPad on  top of his car. We later found it in a ditch. No, we didn’t purchase it with an Amex card or got any warranty. Yes, it was trashed. You would think for the price Apple charges, those things should be indestructible.

Bottom line

In spite of all the potential problems of dealing with gift cards, I’m still a great believer in them. In fact, right after the incident with Wendy’s, I ordered another one, though only $40 this time. So far so good.

To me, the savings justify the hassle, especially since I constantly chase after new offers. That way, I can get closer to my sign-up bonus without depending on cards that have category bonuses.

Readers, has something similar ever happened to you?

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Author: Leana

Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.

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4 thoughts on “The Pitfalls to Gift Cards and Ways to Protect Yourself

  1. I always knew my past as a thumbs down model would come back to haunt me.

    My wife and I have dabbled in Gift Card strategy. This quarter, we’ve been doubling up with the Freedom 5x Grocery bonus and Kroger’s 4X fuel points to get immediate savings on gas.

    We had 1 bad experience with gift card discounts online. We bought a Disney Gift Card online at about 20% off. Turns out it was to a Disney Travel Planning company that is rather sketchy. Which stinks because we plan our trips ourselves as we get better savings that way, and this supposed Disney Travel Planning agency never answers the phone and can’t be contacted online. This was on ebay. I am pretty sure I got played. Hard. Like, this situation is in the dictionary as an example of being played.

    I still plan on leveraging giftcardgranny to make a few immediate purchases. We’ll see how that goes and if I can add it to our official cheapness repertoire.

    • @Cheapblackdad LOL on the “thumbs down” model! That’s kind of how I picture you when you comment. Plus, you know, to white people, all black persons look the same. 🙂
      Sorry about the Disney gift card thing. Honestly, it seems like a scam, 20% off is too good to be true for Disney cards. I recommend you file a dispute with your credit card company before it’s too late. Just tell them what you told me, that you can’t redeem them because they don’t answer the phone. I think you may have a shot at getting your money back. I was in a similar situation with Amazon gift card purchase one time, and Citi did refund the purchase price. No guarantees, of course, but worth a shot. I agree with you, gift cards are best for immediate purchases.

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