Can I Get Money from a Gift Card? The Ultimate Guide to Cashing Out
Yes, in most cases, it is possible to get money from a gift card, though the specific methods and regulations surrounding this vary by location and the card issuer. While gift cards are primarily intended for purchases at the issuing retailer or network (like Visa or Mastercard), there are legitimate avenues to convert them into cash, including selling them to third-party vendors, using them for purchases you can later return for cash, or, in some limited cases, directly redeeming them for cash from the retailer. This guide will explore all your options and answer your burning questions about getting cash for those unused gift cards gathering dust.
Understanding the Gift Card Landscape
Before diving into the “how,” it’s crucial to understand the lay of the land. Gift cards fall into two primary categories: closed-loop and open-loop.
Closed-loop gift cards are specific to a particular store or restaurant. Think of a Starbucks gift card or one from your favorite clothing retailer. They can only be used at that specific merchant.
Open-loop gift cards, like Visa, Mastercard, American Express, or Discover gift cards, function more like debit cards. They can be used at any location that accepts the card’s network. This distinction plays a significant role in your ability to redeem the card for cash.
Strategies for Converting Gift Cards to Cash
So, how do you transform plastic into usable currency? Here are several proven strategies:
1. Selling Your Gift Card to a Third-Party Vendor
This is arguably the most common and readily available method. Numerous online platforms and brick-and-mortar stores specialize in buying unwanted gift cards. These include websites like Raise.com, CardCash, and GiftCardGranny. Simply enter the card’s details (brand, value), and the platform will offer you a price.
Things to Consider:
Discount: Expect to receive less than the face value of the card. The discount can range from a few percentage points to 20% or more, depending on the popularity of the brand and the platform’s demand.
Fees: Some platforms charge transaction fees, which will further reduce your payout.
Verification: Be prepared to verify your identity and the card’s validity.
Payout Methods: Options vary but commonly include PayPal, direct deposit, or check.
2. Using the Gift Card for Purchases You Can Return for Cash
This method requires a bit of finesse and planning. The idea is to use the gift card to buy an item at a retailer with a generous return policy and then return that item for a cash refund.
Challenges:
Return Policies: Not all stores offer cash refunds for purchases made with gift cards. Some will only issue store credit. Carefully review the return policy before making your purchase.
Item Selection: Choose items that are easy to return and are likely to be in demand.
Receipt: Keep the receipt! You’ll need it for the return.
Ethical Considerations: While legal, this method treads a fine line ethically. Use it judiciously and responsibly.
3. Checking for State Laws Requiring Cash Redemption
Several states have laws that require retailers to redeem gift cards for cash under certain circumstances. These laws typically apply to cards with a small remaining balance (often $5 or less). Check the laws in your state to see if you’re eligible.
Where to Look:
- Your state’s Attorney General website.
- Your state’s consumer protection agency website.
4. Selling to Friends or Family
Sometimes the easiest solution is the most direct. Offer your gift card to friends, family, or coworkers who might be interested in the brand. You can sell it to them at a slight discount.
Benefits:
- Simplicity: No need to navigate online platforms or worry about fees.
- Trust: Dealing with people you know can be more comfortable and trustworthy.
5. Trading or Bartering
Consider trading your gift card for goods or services you need. This could involve bartering with friends, neighbors, or even online through platforms like Craigslist or Facebook Marketplace.
6. Donating to Charity
While it doesn’t directly put cash in your pocket, donating your gift card to a charity can provide a tax deduction (consult with a tax professional) and support a worthy cause. Many charities accept gift card donations.
7. Checking the Gift Card Issuer’s Policy
Some gift card issuers, particularly those for open-loop cards like Visa or Mastercard, may have a mechanism for redeeming the card for cash, especially if the balance is below a certain threshold. Contact the issuer directly to inquire.
Frequently Asked Questions (FAQs)
1. Is it legal to sell or trade gift cards for cash?
Yes, it is perfectly legal to sell or trade gift cards for cash in most jurisdictions. The practice is widely accepted and facilitated by numerous platforms and businesses. However, it’s crucial to use reputable and trustworthy vendors to avoid scams.
2. What are the risks of selling my gift card online?
The primary risk is dealing with fraudulent buyers or platforms. To mitigate this, always:
- Research the platform’s reputation.
- Read reviews from other users.
- Use secure payment methods.
- Be wary of offers that seem too good to be true.
3. How much can I expect to get when selling a gift card?
You’ll typically receive between 70% and 90% of the card’s face value. The exact amount depends on the brand’s popularity, the platform’s fees, and current market demand. Popular brands like Amazon or Target will usually fetch a higher price.
4. Can I redeem a gift card for cash at the store where it was issued?
This depends on the store’s policy and local laws. Some retailers may allow cash redemption for small remaining balances, while others strictly prohibit it. Check the store’s policy or contact customer service.
5. What should I do if my gift card is lost or stolen?
Report the loss or theft to the card issuer immediately. Many gift cards have mechanisms for tracking and potentially recovering the remaining balance. Keep a record of your gift card numbers and purchase dates to facilitate the process. However, recovery is not always guaranteed.
6. Do gift cards expire?
Federal law prohibits gift cards from expiring within five years of the date of purchase. However, some fees might be charged after a period of inactivity, which can effectively reduce the card’s value. Check the card’s terms and conditions.
7. Are there any fees associated with using a gift card?
Closed-loop gift cards generally do not have usage fees. However, open-loop gift cards may have activation fees, inactivity fees, or monthly service fees. Read the fine print carefully before using the card.
8. What if I only have a small balance left on my gift card?
As mentioned earlier, some states have laws requiring retailers to redeem gift cards with small remaining balances for cash. This is often referred to as a “cash back” policy. Check your state’s laws. Alternatively, you can use the gift card online or combine it with another payment method to make a purchase.
9. Can I use a gift card to buy another gift card?
This depends on the retailer’s policy. Some retailers allow this, while others prohibit it to prevent fraud. Check the store’s gift card policy or ask a store employee.
10. How can I avoid gift card scams?
- Buy gift cards directly from the retailer or a reputable vendor.
- Inspect the card for any signs of tampering.
- Be wary of offers that seem too good to be true.
- Never give your gift card information to someone you don’t trust.
- Keep your receipt and a record of the card number.
11. Can I get cash back from an ATM with a gift card?
No, you cannot get cash back from an ATM with a closed-loop gift card. Open-loop cards may allow ATM withdrawals, but this functionality is becoming less common due to security concerns and fees. Check the card’s terms and conditions.
12. Are digital gift cards easier to cash out than physical gift cards?
In some cases, yes. Digital gift cards can often be sold more quickly and easily on online platforms because they can be instantly transferred. However, verifying the authenticity of a digital gift card can be more challenging.
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