The stock market has rebounded nicely from the lows a year ago that had people talking the “D” word – Depression. While I haven’t recouped everything we lost, I can’t complain. However, experts are predicting that returns this year won’t be near where they’d hoped, and market watchers are wondering where the next best place to invest is.
My family is still putting money in the market, but this holiday season, I’m betting my money on gift cards! That’s right. Gift cards. Not the most sexy financial instrument out there, but here’s why gift cards excite me.
I treat couponing, deal hunting, and shopping just like I do buying stocks. I do research to find the good deal, I try to buy low on everything I purchase, I pay cash, and I expect maximum returns. The holiday season is the best time to buy stock in gift cards. Nearly every major retailer has bonus deals. If you look at buying into those deals as you would look at making an investment, the percentage value of the bonus deals is like earning money in the market.
Let me explain.
I recently went to Claim Jumper restaurant. They have a holiday gift card deal where if you spend $100.00 in giftcards, you’re given $20.00 in bonus gift cards. Plus, they threw in a free mug of candy, but we won’t count that. We were going to eat at Claim Jumper anyway. So, I bought the $100.00 in gift cards while we were waiting to be seated. Then we spent $60 of the gift card on dinner. But, I pocketed a 20% gain. Not bad for a night out with the kids. For no real effort, I made $20 doing something I was going to do anyway.
At Safeway, they are promoting $20.00 off on your next grocery trip when you buy $200.00 in gift cards. Safeway is a veritable gift card mecca. They have cards for nearly every major store and restaurant you can imagine. The offer is good for two days starting Black Friday. So, if I were to go to Safeway first before Black Friday shopping started, bought $200.00 in gift cards for stores I want to shop on Black Friday anyway, then I’d make 10% for the minuscule effort of running in to get gift cards, and running back out to freeze my butt off in line at Target.
It’s not just grocery and restaurants that offer deals like this at the holidays. Major retailers do too. And, with tax season right around the corner, all those “cash your tax returns for bonus gift card deals” can help save you even more. In fact, gift card deals that start in October and end in the early spring can really add up. Last year, I pocketed close to $1000.00 in “free” money just by converting my cash to gift cards.
Now, a few things to think about. Gift cards are great, but if the store you’re buying them has any chance of folding, then being stuck with gift card balances you can’t use will eat into your profits. Be sure to stick to big name retailers and restaurant chains when you’re investing in gift cards.
Second, the bonus gift cards usually have restrictions like dates and redemption limits. So, be sure to use the bonus cards up first if they have specific-use guidelines. Then, use the actual gift cards if you haven’t already used them at the time you purchased them. Bonus gift cards can also sometime have restrictions about using them with other offers, so watch to be sure you can use them with coupons and other deals.
Lastly, giftcards as an investment isn’t just limited to buying a full-value gift card and getting a bonus card. Buying giftcards at a discounted rate for the full value is also an investment. Costco sells $100.00 worth of McCormick and Schmick’s (M&S) gift cards for $79.99. So in effect, just walking into Costco and buying up $100.00 of gift cards for $79.99 gives me a 20% return on investment the moment I swipe my debit card. And unlike bonus cards, the discounted gift cards like the ones at Costco come with no restrictions. I can use my M&S rewards card, coupons, and other offers to make this deal even sweeter.
Another investment strategy with gift cards is getting them to buy actual items you would have bought already. At Blockbuster video, they were giving a $5.00 gift card to buy an Entertainment Book. Buying the book, then using the Blockbuster coupons in the book in conjunction with the $5.00 gift card to pay for that visit’s movie rentals could effectively save you up to half the purchase price of the book.
When you think about utilizing gift cards in this manner, it’s easy to see how the returns you get from being a smart gift card buyer can add up faster than dividends from money invested in the stock market.
And, in most states, there are gift card laws that protect consumers. Many states have done away with fees for non-use, expiration dates, and other legalities that made gift cards not near as user friendly.
So, this year, I am once again investing my cash in gift cards. Year after year, I make more as a percentage on investing in gift cards than I do giving my money to the guys on Wall Street. And that’s money you can bank on!
Tags: entertainment books, gift cards, Investing, stock market
Posted in Articles, Finance, Frugal Living, Holiday's & Gifts |
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