Can I Add Gift Cards to PayPal?

Many people use gift cards and digital payment platforms like PayPal, often wondering about their compatibility. Understanding how these tools interact is important for managing online purchases. This article clarifies which gift cards PayPal accepts and outlines the process for integrating them.

Understanding How Gift Cards Work with PayPal

Generally, users cannot directly transfer the balance of a gift card to their PayPal account balance. Instead, certain types of gift cards can be utilized as a payment method, similar to a debit or credit card, when making purchases through the PayPal platform. The ability to use a gift card with PayPal largely depends on its classification, specifically whether it is an open-loop or closed-loop card.

Open-loop gift cards are branded by major payment networks such as Visa, Mastercard, American Express, or Discover. These cards function much like traditional debit or credit cards and are widely accepted wherever the respective network’s cards are processed. When considering usage with PayPal, these are typically the only types of gift cards that can be successfully linked and used for transactions.

Conversely, closed-loop gift cards are issued by specific retailers or merchants, such as a particular clothing store or coffee shop. These cards are designed for use only at the issuing merchant’s locations or their online store. Because they lack the backing of a major payment network, these store-specific gift cards generally cannot be linked to or used directly with PayPal. The system is designed to integrate with cards that have a verifiable billing address, a feature often absent in closed-loop cards.

Steps to Link and Use Gift Cards with PayPal

Before attempting to link an open-loop gift card to your PayPal account, it is necessary to activate the card and register it with a billing address through the card issuer’s website. This step is important because PayPal uses the billing address for verification purposes, ensuring the card can be identified like a standard credit or debit card. Without a registered address, online payment systems including PayPal may decline the card.

To add an eligible gift card, log into your PayPal account via the website or mobile application and navigate to the “Wallet” section. Within the Wallet, locate and select the option to “Link a debit or credit card”. You will then be prompted to manually enter the gift card’s details, including the 16-digit card number, expiration date, and the security code (CVV) found on the back of the card.

After entering the card information, ensure the billing address provided matches the one you registered with the gift card issuer. PayPal may perform a small, temporary authorization charge to verify the card’s activity, which is refunded shortly thereafter. Once successfully linked, the gift card will appear as an available payment method in your PayPal account, ready for use in online transactions.

When making a purchase through PayPal, you can select the linked gift card as your payment source during the checkout process. If the gift card’s balance is insufficient to cover the entire transaction amount, PayPal may prompt you to choose another linked payment method, such as a bank account or another card, to cover the remaining balance. PayPal uses the gift card as a direct payment source, drawing from its balance, rather than transferring its value to your main PayPal balance.