Can You Deposit a Gift Card Into Your Bank Account?

You cannot deposit a gift card directly into your bank account. Financial institutions do not consider gift cards to be cash, traditional checks, or direct electronic transfers. Gift cards represent a prepaid value for goods or services, not a direct claim on bank funds. This distinction affects how banks process deposits.

Understanding Gift Cards and Bank Deposits

Gift cards are a form of prepaid payment with a specific monetary value redeemable at merchants. Unlike bank account funds, gift card balances are not directly linked to the national banking network. This prevents them from being processed through systems like the Automated Clearing House (ACH) for bank-to-bank transfers or cash deposits.

There are two types of gift cards: open-loop and closed-loop. Open-loop cards, such as Visa or Mastercard, are widely accepted wherever their brand is honored. Closed-loop cards are store-specific, redeemable only at the issuing merchant or affiliated businesses.

Converting Gift Card Funds for Bank Deposit

While direct deposit is not an option, you can indirectly convert gift card funds into cash for your bank account. One approach is to use the gift card for everyday expenses you would normally pay with cash. For instance, using a gift card for groceries or gasoline keeps that money in your bank account, freeing up funds.

For open-loop gift cards, you can transfer the balance to a digital wallet or peer-to-peer (P2P) payment service. Platforms like PayPal, Venmo, or Cash App may allow adding an open-loop gift card as a payment method. Once funds are in your digital wallet, you can transfer them to your linked bank account, though some services charge a small fee for instant transfers. This process typically does not work for closed-loop gift cards due to their limited acceptance.

Selling your gift card is another option to obtain cash for deposit. Online marketplaces and physical kiosks buy unwanted gift cards. Websites like CardCash or Raise, or kiosks such as Coinstar Exchange, allow you to sell your card for 70% to 90% of its face value. Payment can be received via direct deposit, PayPal, or physical check, which you can then deposit.

Finally, some open-loop gift cards can pay certain bills online, freeing up cash. If a utility or service provider accepts credit card payments, an open-loop gift card can cover the bill. This reduces the amount you need to pay from your bank account, preserving your balance.