Holiday gift cards: The hardest lesson I’ve learned - 1330 WFIN

What I learned this holiday shopping season will forever change how I buy gift cards, and I wanted to share this hard lesson I discovered with you.

Avoid buying gift cards from retail stores

Con artists are latching onto gift cards as a convenient form of payment in their scams. In fact, gift card scams are up when shopping for cards in a retail store where criminal scam artists tamper with some cards – making them worthless after you add hard-earned cash value. Why do scammers love gift card payments so much?

Virtually untraceableReadily availableEasily converted to cash or bitcoinAbility to move large amounts of money in small parcels.

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Here are some of my lessons learned about gift cards this year.
(iStock, File)

Only purchase from cash-back gift card sources

If you buy gift cards through cash-back sources, you earn money and incentives just for buying gift cards. Cashback gift cards earn you a gift at the same time you are being generous to others.

Here's my list of the top reputable cashback gift card sources:

1) Ibotta

Ibotta is a wonderful app that allows you to earn cash back at some of your favorite stores like Target, Starbucks, Lowe's and over 1,500 other retailers. They include rewards for grocery stores, food delivery, movie and concert tickets, and more.

Ibotta gift card options.
(CyberGuy.com)

Once you buy the gift card for your loved one, you'll instantly receive cashback in your Ibotta account. Here's how to purchase gift cards for others in the Ibotta app:

Under the "shop by category" section, go to Gift Cards on the Ibotta app home screen and search or browse retailers by an assortment of categories including "nearby", "clothing", coffee and tea", "electronics", "health and beauty" and more.

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Choose the store you want and select the buy gift card option. You'll note the percentage back you'll be receiving once you purchase the gift card. As you see in the example below, if you purchase an Old Navy gift card, you'll receive 7% back. Some cards you can receive as much as 20% back.

How to buy a gift card through Ibotta.
(CyberGuy.com)

Enter the amount you want to put on the gift card

Here's where to make the payment on Ibotta.
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Toggle This is a gift to send the card to your loved one once you buy it via email or text message; they do not need the Ibotta app in order to use the gift card.

Ibotta lets you earn cash back.
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Instantly find cash back within your Ibotta account once your purchase is complete.

Click this link and use referral code mpiaurm to earn $10 when you submit your first receipt.

Copy the code to insert into the Referral code box on Ibotta "Create account" page: mpiaurm.

To learn more about how to use the Ibotta app to score some great freebies, visit CyberGuy.com and search "Ibotta" by clicking the magnifying glass icon at the top of my website.ge

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2) Rakuten

This popular retailer offers easy ways to earn cash back. They can give cash back on select gift cards purchased at stores via the Rakuten website or by downloading their app. Note: you may not receive cash back for any portions of purchases made with your own gift cards or certificates, meaning you have to always pay with a regular credit or debit card in order to receive cash back.

Rakuten gift card shopping.
(CyberGuy.com)

They offer over 3,500 stores to choose from, including Bath & Body Works, Ulta, and Uber, and each store states the percentage of cash back you will receive once you purchase. Stores like Adidas and Petco offer up to as much as 6% cash back when you purchase gift cards through Rakuten.

Here's how to give your loved one a gift card from Rakuten and earn cash back:

Go to the Rakuten > Click "Categories" in menu > Click Rakuten Gift Card Shop

The Rakuten Gift Card Shop.
(CyberGuy.com)

Select your gift card store brands here.
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Select the store you wish to purchase from and pick the amount you'd like to put on the gift card. Note the percentage of cash back you'll receive for purchasing the gift card.

Earn cash back by purchasing gift cards on Rakuten.
(CyberGuy.com)

Make sure to click "Send as a gift."
(CyberGuy.com)

Check the Send as a gift optionSee your cash back earnings appear in your Rakuten account.

Sign up for Rakuten here and earn $30 when you spend $30. See terms on Rakuten page.

3) TopCashback

TopCashback gift cards offer up to 20.8% cash back when you purchase gift cards through their service. Some of the stores they work with include Macy's, Kohl's, and Dick's Sporting Goods. Here's how to send someone else a gift card through TopCashback.

Create a free account and click "Gift Cards" in the top navigation

TopCashback also offers you cash when you buy gift cards.
(CyberGuy.com)

Here are the store options on TopCashback.
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Select the store you want to buy from, choose the Gift Card Amount, and press Continue. Note the percentage of cash back you'll receive under each gift card.

Here's where you can select the amount for the gift card.
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On the following page, select "Email to someone else" and fill in the information

Choose to email gift cards to yourself or to someone else.
(CyberGuy.com)

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Enter your payment information and TopCashback will send the gift card to your recipient. You'll receive your cash back within 30 days.

Sign up for TopCashback here.

4) PayPal Honey

Many people use PayPal as their main online payment service. However, most don't realize all the rewards that can come with using PayPal Honey as well. PayPal Honey does not offer cash back when consumers use gift cards, but what it will allow you to do is redeem points you earn while shopping through the app for cash, gift cards, or PayPal shopping credits.

Once you download the app and create an account with PayPal Honey, which is free to do, you can activate the Cash Back option so that you qualify for points on your eligible purchases. The app will then let you know while you're shopping at your favorite stores if you qualify for any points earned, as well as any exclusive offers the store is giving such as Double Cash Back.

Over 4,500 stores have a point system with PayPal Honey including Apple, Walmart and Home Depot.

PayPal Honey for gift card points.
(CyberGuy.com)

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Once you've earned enough points, you can redeem those points in exchange for cash, gift cards, or PayPal shopping credits If you want to use the points towards buying gift cards, you can do so from PayPal Honey's Redemption Page. All you have to do is:

Select the store of your choice

Honey gift card options.
(CyberGuy.com)

Choose the number of points you'd like to redeem and select Redeem

Here's how to redeem points using PayPal Honey.
(CyberGuy.com)

PayPal Honey will send you an email within 24 hours with your e-gift card.Find out more about joining PayPal Honey by clicking here.