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

Converting a gift card balance into funds usable in a bank account offers greater financial flexibility. Gift cards are popular, but their restricted use can limit utility. Understanding conversion methods helps integrate these funds into your banking.

Identifying Your Gift Card Type

Identifying your gift card type is the first step, as this distinction dictates transfer methods. Gift cards generally fall into two primary categories: open-loop and closed-loop. Open-loop gift cards function similarly to debit cards and are branded with logos from major payment networks like Visa, Mastercard, American Express, or Discover. These cards can be used anywhere the respective network is accepted, offering broad purchasing power.

In contrast, closed-loop gift cards are issued by specific merchants and are only redeemable at that particular store or business. Examples include gift cards from a coffee shop chain or a large online retailer, which are easily identifiable by the issuing merchant’s distinct branding. Recognizing your card type is crucial, as direct bank transfers are generally only feasible with open-loop cards.

Transferring Funds from Open-Loop Gift Cards

For open-loop gift cards, several methods allow for the transfer of funds into a bank account. Payment applications are a common approach, enabling users to link their open-loop gift card as a payment method. Platforms such as PayPal, Venmo, or Cash App typically require the card number, expiration date, and CVV code for successful integration. Some gift card issuers may necessitate online registration of the card with a billing ZIP code.

Once the gift card is linked, funds can be moved to your app balance and subsequently transferred to a linked bank account. While standard transfers to a bank account are often free and typically process within one to three business days, instant transfers usually incur a fee. For instance, Venmo charges a 1.75% fee for instant transfers, with a minimum fee of $0.25 and a maximum of $25. Cash App also applies a fee ranging from 0.5% to 1.75% for immediate transfers, with a minimum charge of $0.25.

Another method involves purchasing a money order using your open-loop gift card. Money orders can be acquired at various locations, including post offices or certain retail establishments like large department stores. The United States Postal Service charges a fee of approximately $2.35 for money orders up to $500, increasing to $3.40 for amounts between $500.01 and $1,000. Retailers often offer lower fees, with some charging a maximum of $1.00, commonly around $0.88. Once purchased, the money order can then be deposited directly into your bank account, effectively converting the gift card’s value.

Converting Value from Closed-Loop Gift Cards

Converting closed-loop gift cards to cash or bank funds is less direct, as they are restricted to the issuing merchant. Direct bank transfers are not an option. Online gift card marketplaces offer a way to convert their value, often at a discount.

Platforms such as Raise, CardCash, and Gift Card Granny facilitate the sale of unwanted gift cards. The process typically involves listing your card on the marketplace, after which you may receive an offer, usually representing a percentage of the card’s face value. For example, some marketplaces might offer between 60% to 90% of the card’s original value. Once a sale is completed, the marketplace processes the payment and remits the funds to you, often through direct deposit or a payment application. It is important to note that platforms like Raise charge a commission, such as a 15% fee, on the sale price.

An alternative, indirect method involves using the closed-loop gift card to purchase items that can be easily resold for cash. This might include buying popular electronics or commonly used household goods from the issuing merchant. These purchased items can then be sold on online auction sites or local marketplaces. This approach, however, can be more time-consuming and may not yield the full face value of the gift card due to market conditions and potential selling platform fees.

Key Considerations for Transfers

When transferring gift card balances to a bank account, consider several factors for a smooth transaction. Various methods of conversion often involve associated fees and charges, which can reduce the net amount you ultimately receive. These can include processing fees from payment applications, purchase fees for money orders, or commissions charged by gift card marketplaces. Understanding these costs beforehand allows for a more accurate assessment of the final value.

Maintaining thorough records of your gift card numbers, their initial balances, and all transaction details is a prudent practice. This documentation can be helpful for tracking purposes or in the event of any discrepancies. Furthermore, exercising caution against potential scams is advisable; always use reputable platforms and avoid sharing sensitive gift card information, such as PINs or security codes, before a transaction is securely confirmed. Some transfer methods or platforms may also impose daily or monthly transaction limits, which could affect the speed or feasibility of converting larger gift card balances.