Can a PayPal Gift Card Be Transferred to a Bank Account?

While PayPal does not issue traditional gift cards that can be directly transferred to a bank account, funds from certain types of gift cards can be moved into your PayPal balance and then to your bank. This article clarifies the types of cards involved and the steps required for such a transfer.

Understanding Gift Cards and PayPal

General-purpose gift cards, such as those issued by Visa, Mastercard, American Express, or Discover, can often be linked to a PayPal account. These cards function much like regular credit or debit cards, making them compatible with PayPal’s payment system.

Store-specific gift cards, like those for a particular retailer or restaurant, have limitations that prevent their use outside of the issuing merchant. These closed-loop cards cannot be added to a PayPal account as a payment method because they lack the universal processing capabilities of open-loop general-purpose cards.

Converting Gift Card Value to PayPal Balance

Converting the value from a compatible gift card into your PayPal balance involves linking the card to your account. You can add a prepaid Visa, Mastercard, American Express, or Discover gift card to your PayPal account by navigating to the “Wallet” section and selecting “Link a debit or credit card.” You will then enter the gift card’s details, including the card number, expiration date, and security code, just as you would with a standard debit or credit card. It is sometimes necessary to register the gift card with the issuer online, often by providing a billing address, before it can be used for online transactions or linked to digital wallets.

Once the general-purpose gift card is linked, directly “cashing out” its value into your PayPal balance is not a standard feature. Workarounds are needed to move the funds into your PayPal balance. One common method involves using the linked gift card to send money to a trusted contact, who then sends the money back to your PayPal account. Another approach involves using the gift card for a purchase where a refund is subsequently issued to your PayPal balance. Some online platforms also facilitate selling gift cards for cash, with PayPal often offered as a payout option, though these services may charge fees and you might not receive the full face value of the gift card.

Moving PayPal Balance to Your Bank Account

Once funds are in your PayPal balance, transferring them to a linked bank account is a straightforward process. First, link your bank account to your PayPal profile through the “Wallet” section. This involves providing your bank’s routing and account numbers. To verify the bank account, PayPal initiates two small deposits into your bank account within a few business days, which you then confirm within your PayPal account.

After your bank account is linked and verified, you can initiate a transfer from your PayPal balance. Select the “Transfer Money” or “Withdraw Money” option, choose the linked bank account, and specify the amount. PayPal offers two transfer options: a standard transfer, which is free and takes one to three business days, and an instant transfer. Instant transfers incur a fee, often 1.75% of the transfer amount, but funds are typically available within 30 minutes or less. You will receive confirmation after initiating the transfer and can track its status within your PayPal activity.