Do you have a stack of gift cards gathering dust in your wallet or drawer? Perhaps you received them as gifts for birthdays, holidays, or special occasions, but they’re for stores you don’t frequent or products you don’t need. While gift cards are undoubtedly convenient presents, sometimes cash is simply more practical. The good news is that you don’t have to let those gift cards go to waste. There are several legitimate and effective ways to convert your gift cards into cash, allowing you to access the funds you truly need. This comprehensive guide will walk you through the various methods, outlining the steps and considerations involved in turning your plastic into liquid assets.
Understanding the Gift Card Landscape
Before diving into the specifics of converting your gift cards, it’s helpful to understand the basics of the gift card market. Gift cards represent stored value, essentially a pre-paid amount that can be used to purchase goods or services at a specific retailer or group of retailers. They come in two main forms:
- Closed-Loop Gift Cards: These cards can only be used at the issuing merchant. For example, a gift card from Target can only be used at Target stores or on Target’s website.
- Open-Loop Gift Cards: These cards, often branded with Visa, Mastercard, American Express, or Discover logos, can be used at any merchant that accepts those payment methods. They function similarly to debit cards, but are pre-loaded with a specific amount.
The type of gift card you have will influence the options available to you for conversion. Open-loop cards are generally easier to use and may even be cashed out directly through certain mechanisms (although often with fees). Closed-loop cards, however, typically require more creative strategies.
Methods for Converting Gift Cards to Cash
Here are several popular and reliable methods for turning your gift cards into cash, along with detailed instructions and important considerations for each:
1. Online Gift Card Exchange Marketplaces
Online gift card exchange marketplaces are arguably the most convenient and widely used method for selling your unwanted gift cards. These platforms act as intermediaries between sellers (like you) and buyers who are looking for discounted gift cards. Popular marketplaces include Raise, CardCash, GiftCardGranny, and Cardpool.
How it Works:
- Choose a Reputable Marketplace: Research different marketplaces and compare their fees, payout rates, and customer reviews. Look for platforms with a strong reputation for security, reliability, and fair pricing.
- Create an Account: Sign up for an account on your chosen marketplace. You’ll typically need to provide your email address, create a password, and potentially verify your identity.
- List Your Gift Card: Provide the details of your gift card, including the merchant name, the card balance, and the card number and PIN (if required). Some marketplaces may require you to scratch off a protective layer to reveal the PIN.
- Set Your Selling Price: The marketplace will typically suggest a selling price based on the card’s balance and demand. You can adjust this price, but be aware that setting it too high may deter potential buyers. Expect to sell your gift card for less than its face value; the discount varies depending on the merchant and the marketplace’s fees. Typically, you might receive anywhere from 70% to 90% of the card’s value.
- Choose Your Payment Method: Select how you want to receive your payment. Common options include direct deposit, PayPal, or check. Some marketplaces may also offer store credit.
- Submit Your Listing: Once you’re satisfied with the details, submit your listing. The marketplace will review your listing and make it available to potential buyers.
- Fulfill the Order: When your gift card sells, you’ll need to fulfill the order. This usually involves providing the card details to the buyer through the marketplace’s platform. Some marketplaces may require you to ship the physical gift card to them.
- Receive Your Payment: Once the buyer confirms the card’s validity and balance, you’ll receive your payment according to your chosen payment method. Payment processing times vary depending on the marketplace and the payment option you selected.
Important Considerations:
- Fees: Marketplaces charge fees for their services, which are typically a percentage of the selling price. Be sure to factor these fees into your pricing decisions.
- Payout Rates: Payout rates vary depending on the merchant, the card’s balance, and the demand for the card. Popular merchants with high demand tend to command higher payout rates.
- Verification: Marketplaces will verify the card’s balance and validity before releasing payment. This process can take a few days.
- Shipping (if required): If the marketplace requires you to ship the physical gift card, factor in the cost of shipping and ensure that you package the card securely.
- Security: Choose reputable marketplaces with strong security measures to protect your personal and financial information.
- Terms and Conditions: Carefully review the marketplace’s terms and conditions before listing your gift card.
2. Selling Gift Cards at Brick-and-Mortar Stores
Some brick-and-mortar stores, particularly pawn shops and certain grocery stores or retailers with dedicated gift card kiosks, offer the option of buying gift cards for cash. This can be a faster, albeit potentially less lucrative, alternative to online marketplaces.
How it Works:
- Find a Participating Store: Research local pawn shops or retailers that buy gift cards. Call ahead to confirm that they accept the type of gift card you have and to inquire about their payout rates.
- Bring Your Gift Card: Take your gift card to the store. Ensure that the card is in good condition and that the balance is clearly visible.
- Get an Offer: The store will assess the card’s balance and offer you a price. Be prepared for a lower offer than you might receive through an online marketplace, as these stores need to factor in their own profit margins and the risk of reselling the card.
- Accept or Decline the Offer: If you’re satisfied with the offer, you can accept it and receive cash immediately. If you’re not happy with the offer, you can decline it and try another store or method.
Important Considerations:
- Payout Rates: Expect lower payout rates than online marketplaces. Stores typically offer a significantly smaller percentage of the card’s face value.
- Limited Selection: Not all stores accept all types of gift cards. Call ahead to confirm that they accept your specific card.
- Convenience: This method offers the advantage of immediate cash, but the payout rates may be less favorable.
- Security: Ensure that you’re dealing with a reputable store. Check for proper licensing and identification.
3. Using Gift Cards to Purchase and Resell Items
This method involves using your gift card to purchase items from the store and then reselling those items for cash. This approach requires more effort and carries some risk, but it can potentially yield a higher return than selling the gift card directly.
How it Works:
- Research Profitable Items: Identify items that are in high demand and can be easily resold for a profit. Consider electronics, popular toys, clothing, or household goods. Research prices on online marketplaces like eBay or Amazon to determine which items offer the best potential margin.
- Purchase the Items: Use your gift card to purchase the selected items from the store.
- Resell the Items: List the items for sale on online marketplaces, through local classifieds, or at consignment shops. Be sure to take clear photos and write accurate descriptions.
- Ship or Deliver the Items: Once the items sell, ship them to the buyer or arrange for local pickup.
- Receive Your Payment: Receive payment through the chosen platform or method.
Important Considerations:
- Research: Thoroughly research the market to identify profitable items and ensure that you can sell them for a higher price than you paid.
- Fees: Factor in the fees associated with selling on online marketplaces, such as listing fees and commission fees.
- Shipping Costs: Account for the cost of shipping items to buyers.
- Time and Effort: This method requires more time and effort than simply selling the gift card directly.
- Risk: There’s a risk that you may not be able to sell the items for your desired price, or that they may not sell at all.
- Storage: Consider where you will store the items while waiting for them to sell.
4. Gifting to Friends or Family (and Receiving Cash in Return)
If you know someone who frequents the store associated with your gift card, you could offer to use the gift card to purchase something for them in exchange for cash. This is a straightforward and often mutually beneficial option.
How it Works:
- Identify Potential Recipients: Think of friends, family members, or colleagues who might regularly shop at the store associated with your gift card.
- Offer Your Gift Card: Approach them and offer to use your gift card to purchase something they need or want in exchange for cash.
- Negotiate the Terms: Agree on the amount of cash you’ll receive in exchange for the purchase. You can offer a slight discount as an incentive.
- Make the Purchase: Use your gift card to purchase the item for them.
- Receive Your Cash: Receive the agreed-upon amount of cash from the recipient.
Important Considerations:
- Trust: This method relies on trust between you and the recipient.
- Convenience: It may take some time to find someone who needs something from the specific store.
- Negotiation: Be prepared to negotiate the amount of cash you’ll receive.
5. Using Gift Cards for Essential Purchases
While not directly converting to cash, using your gift cards to purchase essential items you would normally buy with cash can effectively free up your cash for other needs. This is a practical and often overlooked option.
How it Works:
- Identify Essential Purchases: Determine which essential items you regularly purchase that are available at the store associated with your gift card. This could include groceries, household supplies, clothing, or personal care products.
- Use Your Gift Card: Use your gift card to purchase these essential items instead of using cash.
- Free Up Cash: By using your gift card for these purchases, you’re effectively freeing up the cash you would have otherwise spent, allowing you to use it for other expenses or savings.
Important Considerations:
- Practicality: This method is most effective if the store associated with your gift card sells items you regularly need.
- Budgeting: Track your spending to ensure that you’re using the freed-up cash wisely.
6. Checking for Cash-Back Options (Especially for Open-Loop Cards)
Some open-loop gift cards (Visa, Mastercard, Amex, Discover) may allow you to withdraw the remaining balance as cash at an ATM or through a bank. However, this is often subject to fees and restrictions, and it’s not a guaranteed option.
How it Works:
- Check the Card’s Terms: Review the terms and conditions of your open-loop gift card to see if cash withdrawals are permitted.
- Visit an ATM or Bank: If cash withdrawals are allowed, attempt to withdraw the balance at an ATM or visit a bank that is affiliated with the card network.
- Pay Any Fees: Be aware that cash withdrawals may be subject to fees, which will be deducted from the remaining balance.
Important Considerations:
- Fees: Cash withdrawal fees can be substantial, reducing the overall value of the gift card.
- Availability: Cash withdrawals may not be available for all open-loop gift cards.
- Restrictions: There may be daily or transaction limits on cash withdrawals.
Protecting Yourself from Scams
The gift card market, unfortunately, attracts scammers. It’s crucial to be aware of potential risks and take precautions to protect yourself.
Common Gift Card Scams:
- Phishing Scams: Scammers may send emails or text messages pretending to be from a legitimate company, asking you to provide your gift card details.
- Gift Card Balance Theft: Scammers may steal the gift card number and PIN and use the balance before you can.
- Fake Gift Card Websites: Scammers may create fake websites that mimic legitimate gift card marketplaces.
- Overpayment Scams: If selling items online, scammers may send you a fake payment that exceeds the asking price and ask you to refund the difference using a gift card.
How to Protect Yourself:
- Never Share Gift Card Details Online: Be wary of requests to share your gift card number and PIN online, especially from unsolicited emails or messages.
- Use Reputable Marketplaces: Only use well-known and trusted gift card marketplaces with strong security measures.
- Inspect Physical Gift Cards: Examine physical gift cards for any signs of tampering before purchasing or accepting them.
- Be Wary of Unsolicited Offers: Be cautious of unsolicited offers to buy your gift cards for an unusually high price.
- Verify Website Security: Before entering your gift card details on a website, check for the padlock icon in the address bar and ensure that the website’s URL starts with “https”.
- Report Suspicious Activity: If you suspect that you’ve been targeted by a gift card scam, report it to the Federal Trade Commission (FTC) and the relevant gift card issuer.
Conclusion
Converting your gift cards into cash is a practical way to unlock their value and access the funds you need. By understanding the various methods available, weighing the pros and cons of each, and taking precautions to protect yourself from scams, you can confidently transform your unwanted gift cards into valuable assets. Whether you choose to sell them on online marketplaces, trade them in at brick-and-mortar stores, or use them to purchase items for resale, you can turn those plastic rectangles into something more useful. Remember to always prioritize security and due diligence to ensure a safe and successful conversion.