How to Transfer a Gift Card to Your Bank Account

Transferring a gift card balance to a bank account is a common inquiry for individuals seeking to convert unused gift card value into spendable funds. While a direct transfer from all gift cards is generally not possible, certain types of gift cards and indirect methods can facilitate this process. Understanding the distinctions between various gift card types and the mechanisms of digital payment platforms or conversion services is key. This guide explores practical approaches to converting gift card balances into bank deposits.

Understanding Gift Card Types and Their Limitations

Gift cards fall into two main types. “Open-loop” gift cards, issued by major payment networks such as Visa, Mastercard, American Express, and Discover, function much like prepaid debit cards. These cards are widely accepted wherever the associated network’s cards are honored, making them adaptable for indirect transfers to a bank account.

In contrast, “closed-loop” gift cards are specific to a single merchant or a limited group of affiliated businesses, such as Amazon or Starbucks. These cards are typically restricted to purchases at the issuing merchant. Their design limits direct convertibility to cash or transferability to a bank account, as they lack universal payment network infrastructure. Open-loop cards offer more flexibility, while closed-loop cards usually require alternative conversion strategies.

Essential Information and Preparations

Before attempting any transfer, gather specific details about your gift card and bank account. Locate the card number, expiration date, and the three or four-digit security code (CVV/CVC) typically found on the back of the card. Some gift cards may also have a Personal Identification Number (PIN) for debit-like transactions, often required for online use or certain transfer methods.

Determine the exact balance by visiting the issuer’s website or calling the toll-free number provided on the card. Ensure the gift card is activated and holds a sufficient balance. For receiving funds, you will need your bank account information, including the bank name, account number, and routing number.

Transferring Funds Using Digital Payment Platforms

Open-loop gift cards can often be utilized with digital payment platforms like PayPal, Venmo, and Cash App to facilitate a transfer to a bank account. These platforms allow users to link gift cards, treating them as a debit or credit card.

Linking Your Gift Card

Navigate to the “Wallet” or “Payment Methods” section in your chosen platform’s application or website.
Select the option to add a new card.
Input the gift card’s number, expiration date, and security code.
Some platforms may require you to register a billing address or ZIP code with the gift card issuer.

Once the open-loop gift card is linked, add funds from the card to your platform’s balance by selecting the gift card as the funding source and specifying the amount. After the funds are available in your digital payment platform balance, you can initiate a transfer to your linked bank account. Standard transfers are often free and may take one to three business days.

For quicker access, most platforms offer an instant transfer option, which incurs a fee. For example, PayPal and Venmo charge 1.75% of the transaction amount for instant transfers, with a minimum fee of $0.25 and a maximum of $25. Cash App applies a fee ranging from 0.5% to 1.75% for instant deposits, with a minimum fee of $0.25. These fees are deducted from the transfer amount, and funds typically arrive within minutes to a few hours.

Converting Gift Cards to Cash for Bank Deposit

When direct digital platform transfers are not feasible, especially for closed-loop gift cards, alternative methods can convert their value into cash for bank deposit.

Gift Card Exchange Websites

Websites like CardCash or Raise allow you to sell unwanted gift cards. These platforms typically offer 80% to 93% of the card’s face value, depending on demand. Payouts can be received via PayPal, direct bank deposit, or sometimes a check, though checks may incur additional fees or longer processing times.

Purchasing Money Orders

Another method involves purchasing a money order using an open-loop gift card, if the retailer permits such transactions. Many major retailers and post offices generally do not accept gift cards for money order purchases due to fraud prevention. However, some locations might allow it, especially for PIN-enabled Visa or Mastercard gift cards. If successful, the money order can be cashed or deposited into your bank account. Contact the specific location beforehand to confirm their policy.

Returning Purchases for Cash

A less reliable approach is using the gift card to make purchases and then returning the items for cash. This method depends on store return policies, as many retailers issue store credit or return value to the original payment method instead of providing a cash refund for gift card purchases. This option carries significant uncertainty.

Key Considerations for Transferring Funds

Several factors warrant attention when transferring gift card funds. Be aware of potential fees that may reduce the net amount received. Digital payment platforms often charge a percentage for instant transfers, and gift card exchange sites deduct a commission. Some gift card issuers may also impose inactivity or dormancy fees if the card remains unused for an extended period, typically after 12 months.

Processing times for transfers vary. Standard transfers from digital payment platforms might take one to three business days, while instant transfers typically occur within minutes. Gift card exchange sites have their own payout schedules, ranging from immediate electronic transfers to several days for direct deposits or checks. Always prioritize security by using secure networks and verifying the legitimacy of websites or applications before entering sensitive financial information. Maintain detailed records of your gift card information, transaction details, and any associated receipts for tracking and resolving issues.