How to Transfer Money From One Gift Card to Another

Understanding Gift Card Categories

Understanding gift card categories is crucial, as each type has specific functionalities that determine where and how funds can be used.

One primary category is “open-loop” gift cards, often branded with major payment network logos such as Visa, Mastercard, or American Express. These cards function similarly to debit cards, as they can be used at any merchant that accepts the associated payment network, both online and in physical stores. Their broad acceptance makes them highly flexible for general spending.

Conversely, “closed-loop” gift cards are restricted to specific merchants or brands. Examples include cards issued by a particular retail store, restaurant chain, or online platform. The funds on a closed-loop card can only be redeemed for purchases made directly with that specific issuer.

The Impossibility of Direct Transfers

Directly transferring funds from one gift card to another, similar to a bank-to-bank transfer, is not a standard feature offered by gift card issuers. Gift cards are fundamentally different from traditional bank accounts or digital payment platforms designed for peer-to-peer money movement.

Issuers structure gift cards as prepaid spending instruments, not for financial transfers. Their terms and conditions state that balances are non-transferable to other cards or bank accounts. This policy helps maintain the integrity of the gift card system as a retail payment mechanism.

The technical infrastructure supporting gift card systems is also distinct from banking networks. Gift card processing systems are primarily designed to authorize and settle transactions at the point of sale with merchants. They lack the sophisticated interbank transfer protocols and security features necessary for direct card-to-card fund movements.

Furthermore, prohibiting direct transfers serves as a measure against fraud and money laundering. Allowing easy, untraceable transfers between anonymous prepaid instruments could create avenues for illicit financial activities. These restrictions are in place to comply with financial regulations and protect consumers.

Indirect Methods for Utilizing Gift Card Balances

While direct transfers between gift cards are not possible, several indirect methods allow individuals to utilize their gift card balances effectively. These approaches provide practical solutions for spending or converting their value. Understanding these methods can help optimize the use of otherwise static gift card funds.

One straightforward method involves simply using the gift card for its intended purpose: making purchases. For closed-loop cards, this means spending the balance at the specified merchant. For open-loop cards, the balance can be used anywhere the associated payment network is accepted, treating it much like a debit card for everyday expenses. This approach frees up an equivalent amount of cash that would have otherwise been spent on those purchases.

Open-loop gift cards can be added to online payment platforms or digital wallets. Services such as PayPal, Amazon Pay, or certain mobile payment apps may allow users to link these gift cards as a payment method. Once linked, the card’s balance can be used for online transactions within that platform, expanding its utility beyond direct point-of-sale purchases. The process usually involves entering the gift card number, expiration date, and security code into the platform’s payment settings.

Selling unwanted gift cards through reputable online marketplaces provides another avenue for utilizing their value. Websites like CardCash, Raise, or GiftCash allow users to sell their gift cards for cash or exchange them for a different merchant’s gift card. The payout typically ranges from 70% to 90% of the card’s face value, depending on the demand for the specific retailer and the marketplace’s fee structure. The process generally involves submitting the gift card details, receiving an offer, and then providing the card information for verification and payment.

Another indirect strategy involves using an open-loop gift card to purchase a different gift card. For instance, a Visa gift card can be used to buy an Amazon gift card or a gift card for a preferred retail store. This method is particularly useful for consolidating funds onto a single, more versatile card or obtaining a card for a specific merchant if the original open-loop card isn’t accepted there. This is essentially using the open-loop card as a form of payment for another gift card purchase.

In some cases, open-loop gift cards can be used to pay certain bills online, provided the biller accepts debit or credit card payments. This option is available when the utility company, internet provider, or other service allows customers to make payments using a card with a network logo. The card is entered as a payment method during the online bill payment process, directly reducing the outstanding balance. This can be a convenient way to reduce household expenses using gift card funds.