What Gift Cards Give Cash Back? How It Works

Gift cards are a popular form of payment, often received as presents or promotional incentives. A common question is whether these cards can provide cash back. While traditional store-specific gift cards do not offer direct cash back, there are particular situations and types of cards where consumers can indeed obtain cash or a cash equivalent. Understanding these distinctions clarifies the value and utility of various gift card formats.

General Purpose Gift Cards and Cash Equivalents

General purpose gift cards, such as those branded with Visa, Mastercard, or American Express logos, function similarly to prepaid debit cards. These cards are not tied to a single retailer and can be used wherever their respective payment network is accepted. Unlike credit cards, general purpose gift cards typically do not earn cash back or rewards on purchases made with them.

However, some general purpose gift cards may allow for cash equivalents. For instance, certain Visa or Mastercard gift cards, if they are reloadable prepaid cards, might enable ATM withdrawals, provided a Personal Identification Number (PIN) has been established. Withdrawals often incur fees, reducing the card’s value. A point-of-sale cash-back option might exist at certain merchants, though this is usually dependent on the merchant’s system and not an inherent feature of the gift card itself.

Converting Small Gift Card Balances to Cash

Some states have enacted laws that require retailers to provide cash back for gift cards with small remaining balances. This legal mandate prevents small, unusable balances from being stranded on cards. The ability to receive cash is not an intrinsic feature of the gift card but rather a consumer protection measure.

Present the gift card at the retailer’s customer service desk or checkout. The balance threshold for cash redemption varies by state, commonly falling within a range of $5 to $10. For example, some states may require cash back for balances under $5, while others extend this to balances up to $9.99. This provision helps consumers recover the full value, even when only a small amount remains.

Selling Unwanted Gift Cards for Cash

A common method for obtaining cash from gift cards, particularly unwanted ones, involves selling them through third-party platforms. These online marketplaces connect sellers with buyers who are looking to purchase gift cards at a discount. This transforms an unused gift card into liquid funds, offering a market-based solution.

Register on a reputable platform, provide gift card details (retailer, balance), and receive an instant offer. Payments are issued via methods like bank transfers, PayPal, or cryptocurrency, typically within minutes to a couple of days. Sellers generally receive less than face value, with discounts varying by card popularity and platform policies. This provides cash from the gift card through resale, not the card itself yielding cash back.

Distinguishing Other Value from Direct Cash Back

Differentiate direct cash back from a gift card from other forms of value associated with financial products. Earning rewards or cash back when purchasing a gift card is a feature of the payment method used for the purchase, such as a credit card, not the gift card itself. Credit card rewards programs incentivize usage and operate independently of the gift card’s features.

Store loyalty points, store credit, or promotional bonus cards are distinct from cash back. Loyalty points accumulate based on spending and are redeemable for discounts or specific items, while store credit is typically issued for returns without a receipt or as a goodwill gesture. Promotional bonus cards, often provided with large gift card purchases, are separate vouchers with their own terms and conditions, not direct cash from the original gift card. These forms of value are valuable but should not be confused with a gift card literally providing cash back.