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Hard Times: Gift Cards Are Used For Cash, Necessities
CNBC.com | December 30, 2008 | 11:12 AM EST

Late December and early January are typically when shoppers flock to the malls to spend their gift cards on discounted merchandise. This year, a lot of shoppers don't want sales. They want the cash.

"Consumers are obviously in dire straits economically and they're going to cash a lot of those cards in for cash, not necessarily goods," said George Whalin, a retail analyst with Retail Management Consultants.

There are more than 6,000 gift cards for sale on eBay right now, up from about 4,000 around this time last year. And Plastic Jungle , a gift-card-resale site, estimates that traffic on its site is up about 30 percent from last year.

Most consumers use these sites to get cash—though usually at less than the gift card's face value—or to swap for other gift cards that can be used to buy food and other necessities. But others are approaching shoppers directly, gift cards in hand.

I experienced this firsthand while scouring the stores for bargains a few days after Christmas. A woman approached me in a department store, asking if I could use a $25 store gift card to buy the sweater I was holding in return for cash. She said she had recently lost her job and needed the money.

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