No money for gifts? No problem

The recession has many families cutting back spending on gifts this year. But with a little resourcefulness, those of you whose bank balances lack holiday cheer can give presents without adding to your debt or picking up a glue gun.

My favorite strategy of the lot is to use what Mark Lacek calls "the other American currency": loyalty points or miles earned through credit-card rewards, store frequent-buyer clubs and airline mileage programs. Lacek, a partner at loyalty marketing company Denali Marketing in Minneapolis, estimates that more than half of the consumers who have earned rewards take advantage of them. But "it is very viable that a consumer could look at the balance in their credit card program and probably find many, many options" for gifts, he said.

I redeemed my credit card points for several gift cards this season. You can use your airline miles not only to send someone on a trip, but also to shop online or to buy magazine subscriptions.

To figure out the value of your rewards, points and airline miles generally equate to 2 to 3 percent, Lacek said. So if you have 100,000 points at 2 percent, you're sitting on the equivalent of $2,000. But many of my programs redeem more at the 1 or 1.5 percent level. Learn the ropes of your reward program quickly so you can be sure to receive the gift before the holidays without paying for expedited shipping.

Look for deals on gift cards

Here's my favorite dollar-stretching strategy for 2008: Several restaurateurs are tempting hungry shoppers with deals where you buy one gift card totaling, say, $100, and you receive another gift card for a smaller denomination. Keep one of the gift cards for yourself, especially if the card is for a place you frequent, or give both away as presents.

A similar marketing tactic I've seen is: Spend a certain dollar amount and receive a free gift. This can pay off, but don't be tricked into spending more than you planned in order to receive the "freebie."

Planning to use credit this holiday season for the convenience factor? Be strategic about which card you use. I recently went to Barnes & Noble and bought a book for half price by using my bookstore membership card with a 40-percent-off coupon I could only use with my MasterCard. I also received credit card rewards points for the purchase.

Layaway is back

Waiting for your next paycheck? The retro concept of putting an item on hold and making regular payments until you're paid up made a comeback this year. Burlington Coat Factory, Kmart and Sears are among stores offering layaway. Most layaway programs charge a service fee, but it's not even close to a credit-card finance charge; Kmart charges $5. Some items -- cell phones, computers and paint thinner, for example -- can't be set aside.

Layaway also isn't a good fit for last-minute shoppers (Kmart says no new layaways after Friday), but if you're low on cash until next payday, it's worth considering.

It's too late to take advantage of eLayaway.com for this holiday. Many customers already are setting romantic gifts aside for Valentine's Day or buying patio furniture, said Michael Bilello of eLayaway.com. For future reference, a fee of 1.9 percent gets you a payment plan of three to 13 months on goods from hundreds of retailers and brands.

No points, no cash? Get creative. Use your strengths as your currency. Trade your talent or time for gifts -- a knitted scarf for a massage or a night of babysitting, for example. Head to Craigslist.org and try bartering your unwanted items for the gifts you need. Dust off unloved toys and gather your friends for a toy swap. Or sell your unwanted clothes, textbooks or collectibles. Your trash could top another man's Christmas list.

The 'regifting' route

Finally, consider thoughtful "regifting." It's environmentally conscious and free. But it can be socially disastrous if not done with finesse. Wrapping up your old junk is not thoughtful regifting, and giving your expired gift cards is unforgivable, so read the fine print, and make sure the store's still in business. Whatever you do, the golden rule of regifting is to make sure the person receiving the item will like it.