How to Send Money With a Gift Card

Sending money with a gift card involves several considerations beyond a direct transfer. While most gift cards do not facilitate direct money transfers, various pathways exist to convert their value into transferable funds or to use new gift cards as monetary gifts. Understanding these processes can help individuals manage financial resources or provide flexible gifts.

Types of Gift Cards and Their Transferability

Gift cards generally fall into two primary categories, each with distinct characteristics regarding usability and potential for conversion. Understanding these types is fundamental to accessing or transferring their value.

Open-loop gift cards are issued by financial institutions and carry the logo of major payment networks, such as Visa, Mastercard, or American Express. These cards function much like debit or credit cards, offering broad acceptance wherever the associated network is recognized. Their widespread utility makes them versatile for conversion into cash or digital funds.

Closed-loop gift cards, in contrast, are issued by specific merchants and are redeemable only at those particular stores or their affiliated brands. Examples include cards for a specific clothing retailer, restaurant chain, or coffee shop. These cards are inherently restricted in their use, limiting their direct convertibility to cash or utility for broad money transfers.

Converting Gift Card Balances to Cash or Digital Funds

For individuals holding gift cards, particularly open-loop varieties, several methods exist to convert their balances into cash or digital funds. Each method involves different processes and potential fees, impacting the net value received.

One common approach involves selling the gift card on a specialized online marketplace. Platforms like CardCash or Raise allow users to list unwanted gift cards, which are then purchased by others at a discount to the face value. Sellers typically receive 70% to 95% of the card’s value, with commissions often deducted by the marketplace. Payouts can be received via direct bank deposit or through digital payment services like PayPal.

Another method for open-loop gift cards is using them to purchase money orders. Certain retailers, including many grocery stores and Walmart, as well as the U.S. Postal Service (USPS), may permit the use of a PIN-enabled general-purpose gift card to buy a money order. USPS charges a nominal fee, and Walmart’s fees are typically low. Once acquired, a money order functions like a prepaid check that can be cashed at a bank or other financial institution, effectively converting the gift card balance into physical cash.

Some open-loop gift cards can be linked to digital wallets or peer-to-peer (P2P) payment applications. Services such as PayPal, Venmo, or Cash App often allow users to add these cards as a payment method, treating them similarly to debit cards. While direct transfers to Cash App from a gift card are generally not supported, linking the gift card to PayPal or Venmo first can serve as an intermediary step. Once the gift card balance is loaded onto one of these platforms, the funds can then be moved to a linked bank account, although instant transfers may incur a fee.

Transferring Converted Funds

After converting a gift card balance into cash or digital funds, several established methods are available for transferring that money to another individual. These options vary in speed, cost, and convenience.

Direct bank transfers are a widely used method for moving funds. Automated Clearing House (ACH) transfers are generally free for standard transactions and typically complete within one to three business days. For faster transfers, wire transfers are an option, often arriving within hours for domestic transfers or one to two business days for international ones, but they incur higher fees.

Peer-to-peer (P2P) payment applications remain a popular choice for sending money quickly. Platforms like PayPal, Venmo, Cash App, and Zelle facilitate transfers between users once funds are in the app’s balance or linked to a bank account. These apps often provide instant transfer capabilities, though some may apply fees. Daily and weekly transfer limits vary significantly by platform and the user’s financial institution.

For situations requiring cash or international transfers, traditional money transfer services like Western Union or MoneyGram are available. These services allow individuals to send funds for cash pickup at various agent locations globally. Fees depend on factors such as the amount, destination, payment method, and desired speed of transfer, often being higher for immediate cash availability.

Sending New Gift Cards as Monetary Gifts

An alternative approach to “sending money with a gift card” involves purchasing and gifting a new card specifically intended to function as a monetary equivalent. This method bypasses the need for conversion processes and offers a straightforward way to provide flexible value.

Purchasing new general-purpose gift cards, such as those from Visa, Mastercard, or American Express, allows the recipient to use the card almost anywhere debit or credit cards are accepted. These cards can be bought online or in various retail stores, making them a convenient option for gift-givers. These cards typically come with an activation fee.

Digital gift cards offer an even more immediate and convenient gifting solution. These can be purchased online and sent directly to a recipient’s email address or mobile phone, providing instant delivery. Many general-purpose digital gift cards offer the same broad acceptance as their physical counterparts, ensuring the recipient has wide flexibility in their spending choices.

When considering new gift cards as monetary gifts, it is important to be aware of certain regulations and potential fees. Gift cards cannot expire earlier than five years from their issuance date. Inactivity fees are generally prohibited unless the card has been unused for at least 12 months, and any such fees must be clearly disclosed.