Discount gift cards: how to save money when shopping

If you can’t make your savings grow much at the moment because of low interest rates, then why not make your money work smarter by looking for any discounts available on the things you buy? While many retailers will offer occasional discounts on goods and services, discounted gift cards could help you secure one more reliably. So how do they work and is there a catch?

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How do discount gift cards work?

A number of organisations in Australia offer discounts on gift cards that you can use any time at certain retailers and service providers. Discounts can range from as little as 1%, up to 10% or more.

That means you only pay a percentage of the gift card value, not the full amount. Say you buy a $100 gift card at a 10% discount. You would pay only $90 for the gift card, saving you $10.

Retailers typically don’t restrict shoppers who bought their gift cards at a discount, so you can generally use them on any purchase where a gift card can be used. You can even use discount gift cards to buy discounted items, if you want to make even further savings.

Not only are discount gift cards available for set denominations of say $10, $50 or $100, you can also buy e-gift cards, including discount e-gift cards, online for custom amounts.

That way, you can match the purchase price of the items you want to buy, at a discount, without worrying about having a gift card left with some residual amount that you might forget to use.

Some discount gift cards allow near-instant access, so you can buy them while you are at the checkout or about to make a purchase online using a smartphone or computer. That offers similar convenience of using your credit or debit card to make the same purchase, but this way you are getting a discount, saving you money.

A smartphone showing discount gift cards online
Discount gift cards on your smartphone. Source: Michael Lund/Canstar

What are the pros and cons of discount gift cards?

Access to some discount gift cards may come via an organisation or program that charges a fee, so you need to check out whether you would really benefit from any savings. To get as much benefit as you can from discount gift cards, you should also check that you can get access to them for the things you already buy, at places you already shop, and you don’t get encouraged into any unnecessary additional spending.

On the plus side, Dr Tracey West, an expert on personal finance at Griffith University, told Canstar that gift cards can be a great way to store savings and are a smart shopping tactic.

“Unlike deferred payment options, like AfterPay and ZipPay, consumers need to have saved the money first, and buying goods comes second,” she said.

“I personally used to buy the discounted Woolworths gift cards and then use them to buy petrol to reduce the cost of this item on our budget.”

A downside of gift cards used to be their short expiration dates, so they could run out before you had a chance to use them, and some retailers wouldn’t honour them under certain circumstances. But that has now changed.

“The Australian Consumer Law changed in November 2019 to provide for three-year expiry periods and some other requirements to allow better consumer rights,” said Dr West.

Nonetheless, it is still important to take steps to avoid unnecessary spending, such as by only loading as much money onto a gift card as you think you’ll use within that three-year timeframe, and to check the provider’s terms and conditions to ensure you can spend the money on the stores and items you want.

For more details, Dr West recommended people check out the latest consumer law on gift cards.

Where can I use discount gift cards?

Discount gift cards may be available for spending at a range of retailers, including major supermarkets, bottle shops, pharmacies, clothing outlets, electronic goods and games stores and hardware stores, as well as on magazine subscriptions, dining out, flights, furniture and a range of other goods.

A collection of gift cards
Collage by Michael Lund/Canstar

The challenge is knowing who is offering what discounted gift cards. Some organisations display the full details, including outlets and discounts, publicly on their website. Others give limited information, and the rest may only display the information when you sign up and login to an account.

How can I get discount gift cards?

You might already be a member of an organisation that offers discount gift cards and e-gift cards.

For example, several motoring organisations such as the NRMA, RACQ and RAA offer their members discounts on gift cards for a variety of outlets.

RACQ spokesperson Lucinda Ross said in the 12 months to 31 May 2021, members had saved more than $21 million using RACQ discounts. But she added that some members may still be missing out on discounts at many popular retail outlets due to not knowing about the discounts.

“Some Queenslanders shop at these retailers each week and simply don’t realise that with a little bit of prior planning and effort they could be saving on these regular purchases,” she said.

Energy companies such as Alinta and AGL also offer their customers discount gift cards.

“AGL customers can get discounted cards with exciting offers from brands like Uber Eats, The Iconic and Sephora, as well as everyday brands like Myer, Kmart and Target which we know resonate strongly with our broad customer base,” a company spokesperson told Canstar. The company is looking to expand beyond the 34 outlets currently on offer.

Other organisations offering their customers discount gift cards at the time of writing include Suncorp and Macquarie Bank. The Australian Partners of Defence organisation offers eligible members with a defence connection access to a range of discount gift cards.

Seniors gift card discounts for anyone

The National Seniors organisation has more than 80 gift cards available to its 150,000-plus members. And despite the name, anyone can become a member of the not-for-profit organisation, for an annual fee.

General manager Chris Grice said some of the most popular discount gift cards members buy are for the big supermarket chains.

“Woolworths appears to be more popular,” he told Canstar. “But in saying that, Coles has started to pick up momentum.”

That might be because the organisation has Coles gift cards offering a 5% discount, compared to Woolworths at 4%.

Mr Grice said using discount gift cards for outlets such as these supermarkets can offer a ‘double bonus’ because they also have loyalty schemes, such as Everyday Rewards at Woolworths and Flybuys at Coles, that offer points on purchases. Those points are awarded based on the full purchase price of any goods, not the discount purchase price of the gift card. For instance, if you bought a $100 Coles gift card for $95 with the 5% discount and then used it to buy $100 worth of groceries, you would get Flybuys points based on the full $100.

“You get smart and combine these things together and it compounds the savings that can be had,” he said.

Using gift cards can be a little daunting at first. It can take a bit of time and effort to work out which organisations offer the best discounts, ease of use and speed of delivery for your situation. But Mr Grice said it was worth the effort, given the potential savings.

“Once people move across to using them they are converted,” he said.

Whether it’s worth it for you to become a member of an organisation offering discounted gift cards just for that benefit alone will depend on your personal circumstances and shopping habits, so you may want to consider working out whether the savings you make would leave you better off overall, after factoring in the annual fee.

Gift card partnerships

Some union members may be able to get discount gift cards too if their organisation is a member of the Union Shopper network, which has partnered with Ambassador Card for access to discount gift cards.

Ambassador Card’s national sales and marketing manager, Hugh Ingleton, told Canstar the organisation has partnership deals with a number of unions, organisations and employers to offer discounted gift cards from about 130 suppliers.

Again, some of the discounts available are on supermarkets and fuel outlets, which the organisation estimates could give annual savings of more than $600 on groceries and more than $400 on fuel. Add in discount savings on holidays and dining out and the annual savings can be fairly significant.

“That’s everyday spending that if you add these up, you’re talking thousands of dollars (in savings),” he said.

The organisation has an online tool that can help you estimate your potential savings if you are able to access any discount gift cards.

As with other ways of accessing discount gift cards, though, one challenge can be finding out which cards you can get through various organisations (e.g. with some, you can only see participating retailers once you’ve signed up). That can make it difficult if you want to research which organisations are offering the best selection of gift cards.

Mr Ingleton said it could pay to ask any organisations you already deal with to see what they may have to offer. Make enquiries with other organisations you don’t yet have dealings with to see what discount deals they may offer to encourage you to join.

If you are considering changing to another organisation because of their discount gift card scheme, then you need to make sure you don’t lose out on any other benefits. Read the terms and conditions carefully.

Online forums can help you find good deals

Dr West said another way to see what was available was to search online forums and groups.

“There are forums that publicly share information about discounts and deals, like Ozbargain,” she said.

“There are also several closed Facebook groups you can ask to join like Mums Who Budget & Save that act as forums to share information on deals and smart shopping.”

The other big challenge, though, is remembering what discounts you may be able to access and reminding yourself to use a gift card while shopping.

“It requires a good memory or a premeditated system to remember to present the discount card for a purchase,” she told Canstar.

“This means high cognitive load and is why many consumers don’t take advantage of discounts they may be entitled to.”

One way to help you remember is to set up lists on your smartphone, using an app such as Google Keep on Android and iPhone, or Apple’s Notes on iPhones. That way, you should never miss out on a good deal or forget to use your gift card.

Cover image source: Michael Lund/Canstar

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This content was reviewed by Sub Editor Tom Letts and Deputy Editor Sean Callery as part of our fact-checking process.

Michael is a senior finance journalist at Canstar, specialising in superannuation, savings, wealth and life insurance. He is an award-winning journalist with more than three decades of experience. His work has featured on the BBC, the ABC, The Sunday Mail, The Courier-Mail and The Conversation.

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