SAN JOSE, Calif. -- So the good news is that Aunt Lula in Des Moines finally remembered your birthday. The bad news is that she sent you a gift card to TJ Maxx, and you'd rather eat bees than shop there.
What's a clothes horse to do? A burgeoning number of online card exchanges are making it possible to turn those unwanted cards into cash, cards from other retailers or even playing time on your favorite online games.
And because sellers of unused cards typically are forced to sell them at a discount, more and more people are buying from the exchange sites to cut costs.
Ruben Collazo, a software engineer in Tampa, Fla., has used websites like GiftCardRescue and Plastic Jungle to score discount cards from retailers including Lowe's and Best Buy. "Over the last year, I've saved 9 percent overall," he said. "I can't get that kind of return in the stock market."
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You can give or get cards for restaurants, movies, sporting goods, even Disneyland.
"The total value of gift cards sold in 2010 was about $100 billion, and 10 percent of those go unused," said Kwame Kuadey, chief executive of GiftCard Rescue, based near Baltimore.
"A lot of people don't know they can sell their gift cards for cash," Kuadey added.
That is slowly changing. New competitors are jumping into the market, and Kuadey says his site's revenues have quadrupled each of the past two years to $2 million.
Of course, any fast-growing market draws its share of potential scammers. Kuadey and Bower say their companies provide safer alternatives to buying cards on outlets like Craigslist or eBay, because the exchanges offer money-back guarantees to users who might get stuck with a fraudulent card. Plastic Jungle even works with card retailers on the front end to verify cards sold on the site are valid.
REALLY, YOU SHOULDN'T HAVE:
Here are some of the leading online exchanges that let consumers swap or sell unwanted gift cards.
-- Cardpool: Founded in 2009, San Francisco startup is backed by Mitch Kapor, Ron Conway, Max Levchin, Chris Sacca and Paul Buchheit, among other top angel investors. www.cardpool.
-- CardWoo: Launched last year, Florida company is a sister to controversial mail-in gold reseller Cash4Gold. www.cardwoo.com
-- GiftCardRescue: Maryland firm launched in 2008 by MBA student has bootstrapped its own funding. www.giftcard
-- Plastic Jungle: Five-year-old San Jose company has landed more than $23 million in venture capital and says it's the largest such marketplace for gift cards. www.plasticjungle.com