The gift card is a very popular option to exchange cash to specific merchants or services However, what happens when you wish to convert that balance into cash on the bank’s account? The issue of whether it is possible to transfer the balance of a gift card directly into an account at a bank is a common question, and the answer is contingent upon the kind that you are using the card for, the terms of and options. Let’s take a look at options of limitations, steps, and procedures required.
Understanding Gift Card Types
Gift cards usually can be classified within two classes:
- Closed-Loop gift cards They are exclusive to a specific brand or retailer, for example Amazon, Walmart, or Starbucks. They are only redeemable in stores of the retailer that issued them or on their website.
- Open Loop Gift Card They are manufactured by payment processors such as Visa, Mastercard, or American Express and can be utilized wherever that the networks are accepted.
The kind of gift card you own has a significant impact on whether you can transfer the balance to an account at a bank.
Can You Transfer a Gift Card Balance Directly to a Bank Account?
In the majority of instances, you cannot directly transfer the balance of a gift card to the bank account. The terms and conditions of a gift card are determined by the issuer generally restrict the balance to purchases within their network. There are however workarounds and other methods of converting gift card balances to cash that can be transferred to accounts at banks.
Closed-Loop Gift Cards
Closed loop gift card (e.g., Target, Amazon) are the most difficult to convert into cash directly. The purpose of these cards is to hold money in their stores, and therefore do not offer ways to withdraw cash. But, here are a few methods to gain access to the money:
- Sell the Gift Card to cash Platforms like CardCash, Raise, or GiftCardGranny let you sell your gift card to cash. You simply list the card and buyers buy it at a reduced price (e.g. it is possible to receive $90 in exchange for 100 gift cards). After the card is sold, the marketplace makes payment by checks, PayPal, or direct transfer, which you later pay to your banking institution.
- Trade cash for money through Peer-to-Peer Marketplaces Websites such as Reddit’s giftcard exchange as well as local market places (e.g., Craigslist, Facebook Marketplace) let you exchange gift cards with other people. Be wary of scams and utilize safe payment methods such as PayPal Goods and Services.
- Buy items and resell Buy high-demand products using the gift card. You can then make them available for sale on platforms like eBay and Amazon. After the item is sold, you can deposit the proceeds into your banking account. This process is laborious and might not return the entire value of your gift card.
Open-Loop Gift Cards
Open-loop gift cards (Visa, Mastercard, etc.) are more flexible since they function as prepaid debit cards. Certain cards have some limitations on how to transfer funds however, it is contingent upon the company that issued them. Here’s how to go about it:
- Link to an Payment App Certain open-loop gift card can be integrated into apps such as PayPal as well as Venmo. If the card is able to transfer funds to a bank account, you can transfer the amount to your associated bank account. You should read the terms of the card or contact the card issuer to confirm.
- Utilize ATMs Certain pre-paid Visa and Mastercard gift cards permit cash withdrawals at ATMs when they have PIN. Then, you can deposit the funds into your banking account. Be aware that there may be fees and not all credit cards allow this option.
- trade or sell like closed loop cards, you can sell gift cards that are open loop on platforms such as CardCash or Raise to receive cash. The money could be transferred into your banking institution.
Steps to Convert a Gift Card Balance to Your Bank Account
This is a general guideline to change the balance on a gift card into cash that you can then deposit:
- Verify the Terms of the Gift Card Read the terms and conditions of the card (on the site of the issuer, or on the card’s packaging) to learn about the limitations on cashing out.
- Check the balance Verify the balance you have left via phone, online or in person at the store to determine the amount you’re working with.
- Choose a Conversion Method:
- Sell online Create an account on an online platform such as CardCash or Raise and then list your credit card, and choose a payment option (e.g., PayPal or direct deposit).
- Trading Locally Find a reputable buyer via a peer-to -peer website or local market.
- Utilize Payment Applications If you have open-loop credit cards, you could try linking with PayPal and Venmo in order to pay the remaining balance.
- ATM Cash Withdrawal for prepaid cards, make use of ATM for cash withdrawal using credit card’s personal identification number.
- Transfer the cash When you have received the cash (via PayPal, check, or even cash in person) you can deposit it into your account at the app of your bank ATM, ATM, or in-person services.
- Pay attention to Fees Be aware of any platform fees (e.g., CardCash may be able to take an amount) ATM charges or transaction fees which reduce your total.
Things to Watch Out For
- Scams Beware of shady buyers or platforms that request sensitive details. Make sure to use reputable websites with protections for buyers.
- Discounted value Selling gift cards usually involves accepting less than amount of the card’s face (e.g. $80-$95 for a $100 gift card).
- Fees Some methods, such as ATM withdrawals, or online platforms, have fees that consume your account balance.
- Deadlines for Expiration Verify whether your gift card is carrying an expiration date, or has inactivity charges that can decrease its value over time.
- Lawful Restrictions Certain states have laws that allow you to exchange gift cards in cash when the balance is lower than a specific amount (e.g. 5 dollars in California). Be sure to check your state’s laws.
Alternatives to Cashing Out
If transferring funds to an account at a bank isn’t possible you can consider the following alternatives:
- Utilize the Card Directly Use the balance on necessities or gift cards at the shop.
- Trade for a Different Gift Card Platforms such as CardCash allow you to trade with a different retailer’s gift card, which you’re more likely to make use of.
- The Gift Card Card: Give the gift card to a family or friend member who shop at the store.
Conclusion
Transferring the balance of a gift card into the bank account isn’t always feasible due to the restrictions of the issuer However, you can convert the balance into cash by trading, selling or by using payment apps. You can then transfer the money. Gift cards that are open loop offer greater flexibility, whereas closed-loop cards require more inventive solutions. Always confirm the terms of the card and use trusted platforms and be aware of the charges to get the most value for your money. In case you’re not sure, look up your state’s laws, or talk to the issuer of your gift card for more specific solutions.