Can You Get Money Off of a Gift Card?

Gift cards are a popular form of gifting, offering recipients the flexibility to choose items they desire from specific merchants. However, individuals sometimes find themselves with gift cards they cannot fully utilize or prefer to convert into a more versatile form of currency, such as cash. Understanding the various ways to obtain value from a gift card, whether directly or indirectly, can provide greater financial control.

Distinguishing Gift Card Types

The ability to convert a gift card into cash or other flexible value often depends on its fundamental type. Gift cards generally fall into two main categories: open-loop and closed-loop cards. Each type possesses distinct characteristics that dictate its usability and potential for conversion.

Open-loop gift cards are branded by major payment networks, such as Visa, MasterCard, American Express, or Discover. These cards function much like a debit or credit card, allowing them to be used at almost any merchant that accepts the associated payment network. Their widespread acceptance provides a high degree of flexibility in how and where the funds can be spent.

In contrast, closed-loop gift cards are issued by specific retailers or a limited group of affiliated merchants. For instance, a gift card from a coffee shop or a large online retailer can only be used for purchases at that particular brand. This restriction means their utility is confined to the issuing merchant, limiting immediate options for those seeking to convert their value.

Direct Cash Redemption Rules

Direct cash redemption of a gift card is generally limited and governed by state laws, often referred to as “cash-out laws.” These regulations mandate that merchants provide a cash payout for small remaining balances on gift cards under specific conditions.

Most states with such laws allow cash redemption when the gift card balance falls below a certain threshold. For example, California permits cash redemption for balances under $10, while Colorado, Connecticut, Maine, Montana, New Jersey, Oregon, and Washington allow it for balances less than $5. Rhode Island and Vermont set an even lower threshold, allowing redemption for balances less than $1. Massachusetts has a unique rule, permitting cash redemption if 90% of the card’s original value has already been spent. To request a cash payout, consumers typically need to present the card to the issuing merchant or contact their customer service department.

Indirect Methods for Obtaining Value

When direct cash redemption is not an option, several indirect methods exist to convert gift card value into more flexible funds. One common approach involves selling unwanted gift cards through online marketplaces. Websites specializing in gift card exchanges, such as CardCash, Raise, or GiftCash, allow individuals to list their cards for sale, typically at a percentage of their face value. Sellers can expect to receive anywhere from 70% to 95% of the card’s value, depending on the merchant and demand. General e-commerce platforms and social media marketplaces also serve as avenues for selling gift cards.

Another indirect method includes trading gift cards with friends, family, or within online communities. This can be an effective way to exchange a gift card for one from a merchant that better suits an individual’s needs.

Using gift cards for everyday expenses is a practical strategy to free up cash. By applying a gift card to planned purchases, such as groceries, gas, or coffee, at the issuing merchant, the equivalent cash remains available for other uses. This approach is particularly beneficial for closed-loop cards, maximizing their utility.

Open-loop gift cards can cover various financial obligations. These cards, operating on major payment networks, can often be used to pay certain bills, including utility bills or credit card statements. They can also fund online accounts or be used for online purchases, transforming their value into more liquid funds. This versatility allows open-loop gift cards to serve as a flexible payment tool, similar to a traditional debit card.