How to Withdraw Money From a Gift Card

Gift cards serve as a popular and convenient method for gifting, providing recipients with pre-loaded value to spend. While these cards offer a flexible alternative to traditional presents, the desire often arises to convert their balances into usable cash. Directly obtaining physical cash from a gift card is not always simple. This often requires understanding the specific type of gift card and employing particular methods to access the funds.

Understanding Gift Card Types

A fundamental distinction exists between the two primary categories of gift cards, which significantly influences how their balances can be converted into cash. Identifying the card type involves examining the card itself for specific branding or reading its terms and conditions.

Open-loop gift cards are branded with logos from major payment networks like Visa, Mastercard, American Express, or Discover. These cards function much like standard debit or credit cards and are accepted wherever their respective network’s cards are honored. They offer broad usability, allowing purchases at a vast array of merchants, both online and in physical stores.

In contrast, closed-loop gift cards are specific to a single store or a limited group of affiliated merchants. For example, a gift card from a specific coffee shop or a large online retailer can only be used for purchases at that particular brand’s locations or website. These cards are designed to encourage spending with the issuing merchant and lack the universal acceptance of open-loop cards.

Converting Open-Loop Gift Cards to Cash

Open-loop gift cards offer more avenues for cash conversion due to their widespread acceptance. Before attempting any conversion, it is advisable to check the card’s balance and ensure it is activated, which often involves registering it online or via phone. This prevents transaction issues and clarifies limitations.

Some open-loop cards, particularly those with a Personal Identification Number (PIN), can be used for cash withdrawals at an ATM. If a PIN was not provided, it can be set up or retrieved through the card issuer’s website or by calling their customer service number. When using an ATM, select “Debit” as the transaction type and enter the PIN to authorize the withdrawal. Daily withdrawal limits and fees may apply.

Another option involves transferring the card’s balance to a bank account, often requiring an intermediate step through a third-party service. Platforms such as PayPal, Venmo, or Cash App can facilitate this process. You would add the open-loop gift card as a payment method to your digital wallet, then transfer the funds from the gift card to your digital wallet balance, and finally initiate a transfer from the digital wallet to your linked bank account. This method may involve small fees or require a few business days for the funds to clear.

Purchasing a money order with an open-loop gift card is another method to convert the balance into cash. Money orders are available at locations like grocery stores, some retailers, and post offices. While the United States Postal Service does not accept gift cards for money order purchases, other retailers like Walmart or Kroger affiliates often do, especially for PIN-enabled Visa or Mastercard gift cards. After purchasing the money order, it can then be cashed or deposited into a bank account, though a small fee is usually charged for the money order itself.

Converting Closed-Loop Gift Cards to Cash

Converting closed-loop gift cards, which are restricted to specific merchants, into direct cash is more challenging than with open-loop cards. However, several alternative methods exist to extract value from them.

One common strategy is to sell the gift card through online marketplaces or at physical gift card exchange kiosks. Online platforms such as CardCash or Raise allow users to list their unwanted closed-loop gift cards for sale, usually at a discount from the card’s face value. Payout rates range from 70% to 92% of the card’s original value, with popular retailer cards often fetching higher percentages. Physical kiosks, often found in grocery stores or malls, provide an immediate cash offer, though the payout percentage might be lower, between 60% and 85% of the card’s value.

Trading or gifting the card to someone who can use it is another practical approach. This involves exchanging the card with friends or family for cash or for a different, more useful gift card. While not a direct cash conversion, it helps to unlock the value of the card without incurring fees.

Using the closed-loop gift card for essential purchases can free up cash from your regular budget. For instance, if you have a gift card for a grocery store or a gas station, using it for these routine expenses allows you to allocate the money you would have spent on those items to other financial needs. This maximizes the card’s value by ensuring practical use.