For holiday shoppers, gift buying is getting close to crunch time. For many, that means defaulting to gift cards.
"Probably Starbucks, Chipotle, gas gift cards," said shopper Leah Crone.
Emma Gohlke goes for restaurants, "I try to make it a little more special, gift cards to restaurants they like," she said.
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Gift cards are a great way to avoid buying awkward holiday socks or getting stuck in a long return line. But some gift cards come with fees and other rules that can catch gift-givers and recipients off guard.
WATCH: Wallethub explains why some gift cards are worth more than others:
Top-ranked gift cards
Each year, WalletHub breaks down its picks for best gift cards of the year based on fees, buyer discounts, and popularity.
This year, its top five picks are:
- Sephora
- Target
- Starbucks
- Disney
- Chipotle
While Visa gift cards are popular among consumers, WalletHub's Chip Lupo says buyers pay an additional fee on top of what the card is worth.
"That's on the purchaser. If you purchase a $100 Visa gift card, you're going to pay $106.90," Lupo explains.
Consumer Sue Majors recently dealt with another downside to Visa gift cards: automatic tips on food.
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"I was told on any food purchase, they withhold 20%," Majors said.
Visa and companies that offer similar products can charge up to 80% of the bill, leaving wiggle room for a tip.
What to do with unwanted gift cards
If you get a gift card you don't think you'll use, some cards have higher resale value on sites like GCX (the gift card exchange) and CardCash than others.
"They're more attractive because they hold more value even if the recipient doesn't use them," Lupo said.
Costco, Best Buy and Walmart have the best resale value, according to WalletHub’s rankings.
An alternative to selling is donating unused gift cards.
"Charities readily accept gift card donations to support their operations," Lupo said.
Gift card savings
Lupo says there are instances where you can buy gift cards below face value. For example, a $100 gift card for $80.
"Those are pretty enticing options, but you kind of have to look for those," Lupo said.
For the best deals possible on gift cards:
- Join loyalty programs for discounts on cards
- Check gift cards for inactivity fees after a year or more
- Buy e-gift cards in a crunch
- When in doubt, give cash
Leah Crone only likes to buy gift cards when all else fails.
"Not the biggest fan. I would rather it be something they will actually like, not just 'here's money to buy something,'" Crone said.
But if you need a gift card, choose wisely so you don't waste your money.
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This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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