How can Target and other stores afford to give away gift cards? Simple: Target and other retailers want to entice customers to come to the stores and shop. Retailers are banking on the idea that you will buy more than the value of your free gift card, much more. Smart consumers do just the opposite -- obtain the free gift card and exchange it for merchandise costing the same amount.
Watch for qualifying purchases in the sales circular. You have to read the ads carefully, but you will see purchases that qualify for a free $5 or $10 gift card. For example, you may have to buy two bags of Science Diet dog food to get the gift card. This works well if the qualifying items are groceries that you usually buy. The deal is even better if you have manufacturer's grocery coupons for the qualifying items!
Watch for prescription transfer incentives. Check the Sunday newspaper circular, pay attention to TV ads, and watch the internet. Periodically, Target offers a free gift card when you purchase or transfer a prescription to their pharmacy.
Check your Target register receipts. When you shop at Target, you may get store coupons that print out with your receipt. Sometimes these coupons contain offers for gift cards (such as transferring a prescription or making a qualified purchase).
Pay attention to promotions in other industries. For example, Marriott Hotels recently offered a promotion for a free Target gift card when guests stay in a Courtyard property.
Redeem credit card points. Many credit card companies such as Discover and American Express have a rewards system. You may be able to redeem your points as Target gift cards.