I’ve written many posts showing how to earn points or cash back when buying bank gift cards (e.g. Visa, Mastercard, or Amex gift cards). For some examples, see (“5X everywhere!,” “Turn your Amex into Visa and Save $,” and “Almost too good to be true”). Buying gift cards can be a great way to earn extra points and to meet minimum spend requirements. The problem is that even though these gift cards are like money, they cannot be deposited into your bank account, and cannot be used to pay your credit card bill.
Below I’ve listed some ideas for how to turn gift cards into cash. Before using any gift cards online, be sure to register them with your home address. Some gift cards only allow registration of your zip code. In those cases, you’ll find that not all online options work. With one such card, I was successful in using it to pay my State Farm insurance online, but I was unsuccessful in using it at Amazon.com or Walmart.com.
The best way to deal with bank gift cards is to spend them in daily use. That way, you get 100% of their value. Of course, using gift cards this way can be a big headache, but it is a reasonable option. One good way to spend them is by paying your insurance bill. I’ve done this successfully multiple times with State Farm. Some people have also reported success in using $500 debit gift cards to pay taxes.
Amazon Payments is a service that allows you to send payments to friends and family members using credit cards. You’re allowed to pay friends up to $1000 per month. As long as you have a gift card that lets you register your full name and address, Amazon Payments should work. Caution: do not send money back and forth between two people with this service. Amazon Payments will shut you down if they see that pattern.
This service is just like Amazon Payments but without the $1000 limit and without the “free” feature. It costs 3.5% to send money using a credit card with this service, so factor that in if you’re thinking of doing this. To try this out, I sent $193.24 to my wife. With the 3.5% fee, the charge came to exactly $200. This was just the right amount to liquidate a $200 Visa I had bought at OfficeMax.
Square is a little device that attaches to your smart phone and allows you to swipe credit cards for payments. Over night, the money paid by credit card is deposited into your linked bank account, less a 2.75% transaction fee. In general this would be a great way to turn gift cards into cash, except for one little hitch: Square terms and conditions prohibit using their service for cash advances. They will notice (and freeze your account) if you run too many gift cards, especially if the gift cards are registered to yourself! I listed Square here for completeness, but I do not recommend using it for the purpose of cashing out gift cards.
Buying and Selling Stuff
Finding ways to profit from buying and selling can be a real struggle, especially since services like EBay and Amazon Marketplace take a pretty big percentage of each sale. However, if you do figure out a way to do this profitably (or at least with minimal loss), it can be a good way to turn gift cards into cash. One example of how I’ve done this successfully is when I found items on clearance at Kohl’s that cost less than the going rate on Amazon.com. I used every trick in the book to save a lot more (and earn lots of points), and I bought several hundred dollars worth. I then turned around and shipped the items to Amazon.com to be sold via their Fulfillment by Amazon service. Amazon did take a big chunk of each sale, but I was still able to make a modest profit.
Buying and Selling Merchant Gift Cards
This can be tricky and fraught with danger, but the possibilities are certainly there for turning gift cards into cash by buying and selling merchant gift cards (e.g. Walmart cards, gas cards, etc.). I’m in the process of running some experiments along these lines and I hope to report more soon. In the meantime, take a look at “Gift cards: buy low, sell high, get cash back.” Probably the easiest option for cashing in gift cards (but not the most profitable) is to buy high value merchant gift cards at face value, and then sell them by first going through a cash back portal. By going through TopCashBack to an appropriate gift card reseller and selling gift cards from Target, Walmart, or several gas companies, you can get back as much as 96% of your money. As, I said, it’s not a profitable route, but it’s pretty easy.
Kiva.org is a micro loaning organization that allows loans to be funded by credit card. You do not get paid interest on your loans, but you do help real people when loaning money. Note that it can take many months to get your money back, but about 99% of all loans do get fully repaid. For more information see “How to maximize points and virtue through Kiva loans”.
Please let me know if you have other strategies for cashing in gift cards. I’ll keep this post updated as new ideas come along.
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