How to Transfer Funds From a Gift Card to a Bank Account

Converting gift card balances into bank account funds offers greater financial flexibility. While convenient for gifting, gift cards often have restricted use. Understanding gift card types is the initial step, as this determines conversion feasibility and methods. This guide clarifies approaches for transforming gift card values into spendable funds.

Identifying Your Gift Card

Identify your gift card type before attempting a transfer. Gift cards fall into two main categories: open-loop and closed-loop. Open-loop gift cards function much like prepaid debit cards and are backed by major payment networks such as Visa, Mastercard, American Express, or Discover. These cards can typically be used anywhere the respective network is accepted, offering broad purchasing power without being tied to a bank account. You can identify an open-loop card by looking for these network logos on the card itself.

Conversely, closed-loop gift cards are issued by specific merchants or a group of affiliated businesses. These cards are only redeemable at that particular store or business. Identification of a closed-loop card is straightforward, as it will prominently feature the issuing merchant’s distinct branding and will lack the logos of major payment networks. Direct bank transfers are generally only feasible with open-loop cards, while closed-loop cards typically cannot be directly transferred to a bank account.

Transferring Open-Loop Gift Card Balances

For open-loop gift cards, several methods can facilitate the conversion of funds into a bank account. One common approach involves utilizing payment applications such as PayPal, Venmo, or Cash App. To use these platforms, you typically link your open-loop gift card as a payment method by entering the card number, expiration date, and CVV code. Some gift card issuers may require you to register the card online with a billing ZIP code before it can be used for online transactions or linked to payment apps.

Once the gift card is linked, the process generally involves moving the funds to your app balance and then initiating a transfer from that balance to your linked bank account. While PayPal allows you to add prepaid cards, funds often need to be in your PayPal balance before they can be sent or transferred, and a fee of approximately 3.5% plus $0.15 might apply for certain transfers from the card to the balance.

Venmo and Cash App typically treat these cards more like debit cards for purchases, and direct transfers from the gift card itself to a bank account are often not supported. However, some users navigate this by sending money from the gift card to a trusted person via the app, who then sends it back, or by using the app balance as an intermediary before transferring to a bank. Instant transfers from the app balance to a bank account may incur a fee, commonly around 1.75% of the transferred amount, with a minimum fee of $0.25 and a maximum of $25.

Another method involves purchasing a money order using your open-loop gift card. This can be done at various locations, including post offices or certain retail establishments like large department stores. For instance, the United States Postal Service charges a fee of approximately $2.35 for money orders up to $500, and $3.40 for amounts between $500.01 and $1,000. Some retailers may offer lower fees, often ranging from $0.88 to $1.00.

Once acquired, the money order can then be deposited directly into your bank account, effectively converting the gift card’s value into liquid funds. It is important to note that American Express gift cards may not directly support money order purchases due to lacking a PIN, sometimes necessitating an indirect approach of purchasing a Visa gift card first.

Options for Closed-Loop Gift Cards

Direct bank transfers are generally not an option for closed-loop gift cards, as these cards are restricted to the issuing merchant. However, several practical alternatives exist to convert their value into more usable forms. One effective method is to sell the gift card through reputable online marketplaces like Raise, CardCash, and Gift Card Granny.

When selling a closed-loop gift card, expect to receive a percentage of its face value, typically ranging from 75% to 90%. The exact percentage varies based on brand popularity and demand. Platforms may also charge fees, ranging from 5% to 15% of the card’s value, impacting your final payout. The process usually involves listing your card and receiving payment via direct deposit or a digital service once a buyer is found.

Alternatively, use the gift card for its intended purpose at the issuing merchant. If the card is for a store you frequent, using it for everyday purchases can free up cash in your bank account. For cards from merchants you do not typically patronize, consider purchasing regularly needed items or those that could be easily resold. Another straightforward option is to regift the card to someone who can utilize it.