Gift card trading: The secondary market
By Ellen Cannon • Bankrate.com

For your wedding, you got four Wal-Mart gift cards and one for Barnes & Noble, but you'd like to get one big present at Pottery Barn. There are a number of Web sites that can help you turn your unwanted gift cards into gifts you want -- or cash.

"Money is money. If you have three $5 cards, you can trade them for $15," says Bob Butler, president and CEO of cardavenue.com, a 3-year-old site where people can buy, sell or trade gift cards.

The gift card market is estimated to be $60 billion, and experts say 10 percent to 15 percent of gift cards go unused. "A $25 gift card is worth $25," says Butler. "People don't think about it as money. People will have $200 in gift cards lying around. You can sell your card for cash or trade, and most people trade."

The largest market of gift cards for auction is at eBay, of course. There are so many cards available on eBay that they separate them into various categories; even by retailers. Some are also listed under the "gift certificate" heading.

Buying gift cards on a Web site can bring potential savings. It can also give you access to a store or restaurant that might not be in your area, but is in the neighborhood of someone to whom you're giving a gift. Listed on eBay were: a $395 Coach store gift card with a $335 bid ($2 shipping), a $466 Pottery Barn/Williams-Sonoma gift card with a $355 bid (shipping fee not specified), a $150 card for the Palace of Auburn Hills, where the Detroit Pistons play, with a $51 bid ($1 shipping) and a $400 Nike gift card with a $280 bid (free shipping).

Other Web sites -- including cardavenue.com, plasticjungle.com and swapagift.com -- are devoted exclusively to buying, selling or trading gift cards.

Cardavenue.com has an extensive inventory of cards of all kinds. "We average 5,000 cards a month," says Butler.

If you want to trade a card, you create a "wish list" of cards you will accept. For example, a trader had a $162.56 Tiffany & Co. gift card and would accept a card for retailers such as Armani Exchange, Trader Joe's and Costco.

"Most people combine various gift cards to get one they want," says Butler. "Say, they'll have three Target cards and a Borders and a Starbucks, totaling $150. They can trade them on our site for one $150 card at Lowe's or someplace."

Cardavenue.com has free registration, and it charges the auction seller 3.95 percent of the auction's closing price, plus a 50-cent closing fee. Auction buyers pay no fee. For trades, both parties involved pay 3.95 percent of the value of the card, plus a 50-cent closing fee. If the value of one customer's gift card is not equal to the value of the card he or she wants to trade for, he or she can offer the other party cash for the balance. Those negotiations are between the two parties. PayPal is accepted.