Want to turn those gift cards into cash? This comprehensive guide on How To Get Money Off Gift Cards provides actionable strategies for converting your unused gift cards into real money, brought to you by money-central.com. Maximize your financial flexibility and unlock the value of your gift cards with these smart financial tips and cash-out options.
1. What Are Gift Cards And Why Cash Them Out?
Gift cards are prepaid stored-value money cards issued by retailers or financial institutions that can be used to make purchases. Gift cards can be useful, but sometimes you need cash instead. Cashing out a gift card means converting the card’s value into cash you can use for anything.
1.1 Understanding Gift Cards
Gift cards come in two main types:
- Closed-Loop Gift Cards: These are restricted to a specific store or chain. For example, a gift card from Walmart can only be used at Walmart stores or online at Walmart.com.
- Open-Loop Gift Cards: These are more flexible and can be used anywhere the payment network (like Visa, Mastercard, American Express, or Discover) is accepted. These act more like prepaid debit cards.
Various types of gift cards for different retailers
1.2 Why Cash Out Gift Cards?
Cashing out gift cards can be a smart financial move for several reasons:
- Immediate Financial Needs: Cash can be used for bills, emergencies, or other financial obligations.
- Unwanted Retailers: You may have a gift card for a store you don’t like or don’t shop at frequently.
- Avoiding Clutter: Unused gift cards can clutter your wallet and create unnecessary stress.
- Maximizing Value: You might prefer investing the cash or using it for a high-yield savings account to earn interest.
According to research from New York University’s Stern School of Business, in July 2023, approximately $1 billion in gift cards goes unused each year, highlighting a significant opportunity for consumers to reclaim this value.
2. What Are The Different Ways To Get Money Off Gift Cards?
There are several methods to convert your gift cards into cash. Each option offers different levels of convenience, payout rates, and effort required.
2.1 Sell Or Exchange Gift Cards Online
Selling or exchanging gift cards online is a popular and effective method. Numerous platforms act as intermediaries, connecting sellers with buyers.
- How It Works: You list your gift card on a platform, and buyers purchase it at a discounted rate.
- Payout Rates: Generally, you can expect to receive 70% to 92% of the card’s face value.
- Popular Platforms:
- CardCash
- Raise
- Gift Card Granny
- ClipKard
- Pros:
- Flexible and convenient
- Potential for higher payouts compared to other methods
- Wider audience of potential buyers
- Cons:
- Not instant cash
- Transaction fees may apply
- Payout time can range from a few days to a week
Example: If you have a $100 gift card for a popular retailer like Amazon, you might receive $85-$92 when selling it online.
Tip: Check multiple platforms to find the best payout rate for your specific gift card.
2.2 Use Gift Card Kiosks
Gift card kiosks are physical machines typically found in grocery stores, shopping malls, and big-box retailers.
- How It Works: Insert your gift card into the kiosk, and it will assess the balance and provide an instant cash offer.
- Payout Rates: Kiosk payouts are usually lower, ranging from 50% to 70% of the card’s value.
- Popular Locations:
- Grocery stores (e.g., Kroger, Safeway)
- Shopping malls
- Big-box retailers (e.g., Walmart, Target)
- Pros:
- Immediate cash
- Hassle-free and quick process
- Cons:
- Lower payout rates
- Offers are non-negotiable
- May not accept all types of gift cards
Example: If you have a $50 gift card, a kiosk might offer you $25-$35 in cash.
2.3 Buy Then Resell Items
Another strategy is to use your gift card to buy items and then resell those items for cash.
- How It Works: Purchase popular or high-demand items using your gift card and resell them on online marketplaces.
- Items to Consider:
- Electronics (smartphones, laptops, gaming consoles)
- Fashion items (brand-name clothing, accessories)
- Home goods
- Reselling Platforms:
- eBay
- Craigslist
- Facebook Marketplace
- Swappa (for electronics)
- Pros:
- Potential to recover most or all of the gift card’s value
- Opportunity to turn a small profit
- Cons:
- Requires more effort and time
- Risk of not being able to resell items quickly or at a desired price
Example: Use a $200 gift card to buy a popular electronic gadget and resell it on eBay for $180.
2.4 Claim Remaining Balances
Some states have consumer-friendly regulations that require retailers to cash out gift cards if the remaining balance is below a certain threshold.
- How It Works: Visit the store and request the remaining balance in cash.
- Threshold: Typically $5 to $10.
- States with Laws:
- California
- Colorado
- Maine
- Washington
- Pros:
- Simple and straightforward
- Avoids fees and commissions
- Cons:
- Only works if your state has such a law
- Payout is small
Example: If you have a $7 balance on a gift card in California, you can request $7 in cash from the retailer.
2.5 Trade Gift Cards
Trading gift cards involves swapping a card for one from a different retailer. This method is beneficial if you have a gift card for a store you don’t like, but prefer another store.
- How It Works: You exchange a gift card for another one that you find more useful.
- Platforms for Trading:
- CardCash
- Raise
- Gift Card Granny
- Pros:
- Greater control over the outcome
- Ideal if you don’t need immediate cash but want more spending options
- Cons:
- The value of gift cards may vary, and you might not get a 1:1 trade
Gift Card Exchange
2.6 Direct Sale to Friends or Family
One of the simplest ways to get money off a gift card is to sell it directly to friends or family members. This method can be straightforward and trustworthy since you are dealing with people you know.
- How It Works: Offer the gift card to friends or family members at a discounted rate.
- Pros:
- Simple and direct transaction
- Trustworthy as you’re dealing with known individuals
- Negotiable pricing
- Cons:
- Limited to your immediate network
- May require some negotiation to agree on a price
- Potentially awkward if the offer is declined
Example: If you have a $50 gift card to a store your friend loves, offer it to them for $40. This gives them a discount while you get cash in hand.
3. What Are The Key Considerations Before Cashing Out?
Before you decide on a method, it’s important to consider a few key factors.
3.1 Check Gift Card Balance
Knowing the exact balance on your gift card is crucial before proceeding with any cash-out method. You can check the balance by:
- Visiting the retailer’s website
- Calling the customer service number on the back of the card
- Using an online gift card balance checker
Knowing the balance helps you avoid transaction errors and ensures you get the correct payout.
3.2 Stick To Trusted Platforms
When selling or exchanging gift cards online, it’s essential to use reputable and trusted platforms. Avoid unknown websites or marketplaces that may pose risks such as identity theft or scams. Reputable sites typically have:
- Clear policies
- Good customer reviews
- Reliable customer service
3.3 Check Expiration Dates And Restrictions
Some gift cards may have expiration dates or specific limitations such as geographic or merchant-specific restrictions. These factors can reduce the card’s value or make it harder to sell or trade. Always check for any terms that could affect the usability or resale potential of your gift card before cashing out.
3.4 Protect Your Information
Protect your personal and financial information when cashing out gift cards. Never provide sensitive information such as your Social Security number or credit card details to anyone offering to buy or trade your gift card. If mailing your card to a buyer or exchange service, ensure the process is secure and track the shipment.
3.5 Keep Transaction Details
Whether selling your gift card online, using a kiosk, or exchanging cards through an app, keep a record of the transaction. This includes screenshots, confirmation emails, and receipts. Having documentation will help resolve any disputes or issues with the payout quickly.
4. Optimizing Gift Card Value for Maximum Returns
To maximize the value you get when cashing out a gift card, it’s essential to employ certain strategies that can increase your returns.
4.1 Understanding Market Demand
Certain gift cards are more in demand than others, and this demand affects the resale value. Gift cards from popular retailers like Amazon, Walmart, and Target typically fetch higher prices due to their broad appeal and usability.
- High-Demand Retailers: Gift cards from these retailers are easier to sell and usually offer better payout rates.
- Niche Retailers: Gift cards from smaller or less popular retailers might have lower resale values due to limited demand.
4.2 Timing Your Sale
The timing of your sale can also impact the value of your gift card. Selling gift cards during peak shopping seasons, such as Christmas or Black Friday, can increase demand and potentially fetch higher prices.
- Holiday Seasons: Demand for gift cards increases, leading to better resale values.
- Back-to-School: Gift cards for clothing and electronics retailers are in high demand.
4.3 Leveraging Promotions and Discounts
Keep an eye out for promotions and discounts that can increase the value of your gift card. Some platforms offer bonus cash or increased payout rates during promotional periods.
- Platform Promotions: Regularly check platforms like CardCash and Raise for special offers.
- Cash-Back Programs: Use cash-back programs or rewards credit cards when purchasing gift cards to maximize your returns.
4.4 Maximizing Value Through Strategic Purchases
When opting to buy and resell items, choosing the right products is crucial. Focus on items that retain their value and are in high demand.
- Electronics: Gadgets like smartphones, tablets, and gaming consoles are popular resale items.
- Limited Edition Items: Special edition or limited-release products can command higher prices in the resale market.
- Collectibles: Certain collectibles, such as trading cards or figurines, can be profitable if you know the market well.
4.5 Comparing Different Platforms
Different platforms offer varying payout rates and fees, so it’s important to compare your options before making a decision.
- Payout Rates: Check the payout rates on multiple platforms to find the best deal.
- Fees: Consider transaction fees and any other charges that might reduce your payout.
- User Reviews: Read user reviews to assess the reliability and trustworthiness of the platform.
4.6 Utilizing Multiple Methods
Sometimes, the best approach involves using a combination of methods to maximize your returns.
- High-Value Cards: Sell high-value gift cards on online platforms for better payout rates.
- Low-Balance Cards: Cash out low-balance cards at kiosks or claim remaining balances where applicable.
5. How to Avoid Scams and Fraud When Cashing Out Gift Cards
Cashing out gift cards can be a convenient way to access funds, but it’s also an area rife with potential scams and fraudulent activities. Staying informed and vigilant is essential to protect yourself from becoming a victim.
5.1 Recognizing Common Gift Card Scams
Understanding the common scams associated with gift cards can help you identify and avoid them. Here are a few examples:
- Phishing Scams: Scammers send emails or text messages pretending to be from legitimate companies, asking you to provide gift card details.
- Fake Online Marketplaces: Fraudulent websites or online marketplaces that offer to buy your gift cards but never pay you.
- Gift Card Hacking: Scammers attempt to guess the gift card number and PIN to drain the balance.
- Demanding Gift Cards for Payment: Scammers posing as government officials, tech support, or other authority figures demand payment via gift cards.
5.2 Verifying the Legitimacy of Platforms
Before using an online platform to sell or exchange your gift cards, take steps to verify its legitimacy.
- Check for Secure Connection: Ensure the website has a secure connection (HTTPS) before entering any personal or financial information.
- Read Reviews and Testimonials: Look for reviews and testimonials from other users to gauge the platform’s reliability.
- Verify Contact Information: Confirm that the platform provides legitimate contact information, including a physical address and phone number.
- Check with the Better Business Bureau (BBB): See if the platform is accredited by the BBB and review any complaints filed against it.
5.3 Protecting Your Gift Card Information
Protecting your gift card information is crucial to prevent unauthorized access and potential fraud.
- Keep Gift Cards Secure: Store your gift cards in a safe place and treat them like cash.
- Scratch Off PIN Coverings Carefully: If the PIN is covered, scratch it off gently to avoid damaging the numbers.
- Never Share Gift Card Details Over the Phone or Email: Legitimate businesses will never ask for gift card details via phone or email.
- Monitor Gift Card Balances Regularly: Check your gift card balances periodically to detect any unauthorized activity.
5.4 Using Secure Payment Methods
When receiving payment for your gift cards, use secure payment methods to protect yourself from fraud.
- PayPal: Use PayPal or other secure payment platforms that offer buyer and seller protection.
- Avoid Unsecured Methods: Be wary of accepting payments via methods like wire transfers or money orders, which are difficult to trace and recover if something goes wrong.
5.5 Reporting Suspicious Activity
If you encounter any suspicious activity or believe you have been scammed, report it immediately.
- Contact the Platform: Report the incident to the online platform or marketplace where the scam occurred.
- File a Complaint with the FTC: File a complaint with the Federal Trade Commission (FTC) to report the scam.
- Contact Local Law Enforcement: If you have lost money or sensitive information, contact your local law enforcement agency.
- Notify the Gift Card Issuer: Contact the company that issued the gift card to report the fraud and potentially recover the remaining balance.
6. Understanding the Tax Implications of Cashing Out Gift Cards
Cashing out gift cards typically doesn’t have direct tax implications for the recipient if the gift card was received as a genuine gift. However, certain scenarios may trigger tax obligations. Understanding these can help you stay compliant with tax laws and avoid potential issues.
6.1 Gift Cards Received as Gifts
Generally, gift cards received as genuine gifts are not considered taxable income. The IRS considers gifts to be non-taxable for the recipient.
- No Taxable Income: If you receive a gift card from a friend or family member without providing any goods or services in return, it is usually tax-free.
6.2 Gift Cards Received as Rewards or Incentives
If you receive a gift card as a reward, incentive, or compensation for services rendered, it may be considered taxable income.
- Taxable Income: When a gift card is provided as part of a promotional offer, employee recognition, or customer loyalty program, the value is usually taxable.
- Employer-Provided Gift Cards: Gift cards given by an employer to an employee are generally considered part of the employee’s wages and are subject to income tax and payroll taxes.
6.3 Selling Gift Cards for Profit
Selling gift cards at a profit might have tax implications depending on the circumstances.
- Personal Property: Gift cards are typically considered personal property, and any profit from selling them could be subject to capital gains tax.
- Casual Sales: If you occasionally sell gift cards, the IRS may view it as a casual sale, and you may not need to report it if the profit is minimal.
- Business Activity: If you regularly buy and sell gift cards as a business, the profits are considered business income and must be reported on your tax return.
6.4 Keeping Accurate Records
To accurately determine your tax obligations, it’s important to keep detailed records of all gift card transactions.
- Receipts and Statements: Keep receipts and statements showing the original value of the gift cards, the amount you sold them for, and any associated fees.
- Transaction Dates: Record the dates of all gift card transactions.
6.5 Consulting a Tax Professional
Tax laws can be complex, and the tax implications of cashing out gift cards can vary depending on your specific circumstances. Consulting with a tax professional can provide personalized advice and ensure you comply with all applicable tax laws.
- Professional Guidance: A tax professional can help you understand your tax obligations and properly report any income or gains from gift card transactions.
7. How to Use Gift Cards Strategically Instead of Cashing Out
While cashing out gift cards can be a practical solution for immediate financial needs, there are strategic ways to use gift cards that might provide more value in the long run. Here are a few alternatives to consider:
7.1 Saving on Everyday Purchases
Using gift cards to pay for everyday expenses can help you free up cash for other financial goals.
- Groceries: Use gift cards from grocery stores to reduce your monthly grocery bill.
- Gas: Gift cards from gas stations can help lower your transportation costs.
- Household Items: Use gift cards from big-box retailers like Target or Walmart to buy household essentials.
7.2 Gifting to Others
If you have gift cards that you don’t need, consider gifting them to friends or family members.
- Birthdays and Holidays: Gift cards make great presents for birthdays, holidays, and other special occasions.
- Thank-You Gifts: Use gift cards as thank-you gifts for people who have helped you out.
7.3 Strategic Online Shopping
Using gift cards for online shopping can help you take advantage of deals and discounts.
- Online Sales: Shop online during sales events and use gift cards to maximize your savings.
- Cash-Back Portals: Use cash-back portals in conjunction with gift cards to earn additional rewards.
7.4 Combining Gift Cards with Coupons
Combining gift cards with coupons can help you save even more money.
- Manufacturer Coupons: Use manufacturer coupons in conjunction with gift cards to reduce the cost of your purchases.
- Store Coupons: Combine store coupons with gift cards for double savings.
7.5 Investing in High-Value Items
Using gift cards to invest in high-value items that you need can be a smart financial decision.
- Electronics: Use gift cards to purchase electronics like laptops, tablets, or smartphones.
- Home Appliances: Use gift cards to buy home appliances like refrigerators, washing machines, or dryers.
7.6 Re-gifting
Consider re-gifting unwanted gift cards to someone who will appreciate them.
- Appropriate Recipients: Make sure the gift card is something the recipient will genuinely like and use.
- Track Your Gift Cards: Keep a record of the gift cards you have and who you gave them to, to avoid accidentally re-gifting the same card to the same person.
Gift Card Organization
8. The Future of Gift Cards: Trends and Innovations
The gift card industry is continually evolving, with new trends and innovations emerging to enhance usability and convenience. Staying informed about these developments can help you make the most of your gift cards.
8.1 Digital Gift Cards
Digital gift cards are becoming increasingly popular, offering convenience and flexibility.
- Instant Delivery: Digital gift cards can be delivered instantly via email or text message.
- Mobile Wallets: Many digital gift cards can be stored in mobile wallets for easy access and use.
- Customization: Digital gift cards can often be customized with personal messages and designs.
8.2 Blockchain and Cryptocurrency Gift Cards
Blockchain technology is being used to create more secure and transparent gift card systems.
- Enhanced Security: Blockchain-based gift cards offer enhanced security features, making them less susceptible to fraud.
- Cryptocurrency Gift Cards: Some companies are offering gift cards that can be redeemed for cryptocurrencies like Bitcoin or Ethereum.
8.3 Personalized Gift Card Experiences
Companies are increasingly focusing on creating personalized gift card experiences.
- Custom Designs: Many retailers allow you to create custom gift card designs with personal photos and messages.
- Subscription Services: Gift cards for subscription services like streaming platforms or meal kits are becoming more popular.
8.4 Gift Card Loyalty Programs
Some retailers are offering loyalty programs that reward customers for purchasing and using gift cards.
- Rewards Points: Earn rewards points for every dollar spent on gift cards.
- Exclusive Offers: Access exclusive deals and promotions when you use gift cards.
8.5 Sustainable Gift Card Options
With increasing environmental awareness, sustainable gift card options are emerging.
- Eco-Friendly Materials: Some companies are using eco-friendly materials like recycled paper or biodegradable plastics to create gift cards.
- Digital-Only Options: Opting for digital gift cards reduces the need for physical cards, helping to minimize waste.
9. How Can Money-Central.Com Help?
Money-central.com is your go-to resource for all things finance. We offer a wealth of information, tools, and resources to help you manage your money effectively.
9.1 Financial Education
We provide easy-to-understand articles and guides on a variety of financial topics, including:
- Budgeting
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9.2 Product Comparisons
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- Bank accounts
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We connect you with reputable financial advisors who can provide personalized advice tailored to your specific situation.
9.5 Up-To-Date News And Analysis
Stay informed about the latest financial news and market trends with our timely updates and expert analysis.
10. Frequently Asked Questions (FAQ) About Cashing Out Gift Cards
Here are some frequently asked questions about cashing out gift cards:
- Can I get cash for a gift card?
Yes, you can get cash for gift cards through various methods, including selling online, using gift card kiosks, or claiming remaining balances in certain states. - What is the best way to cash out a gift card?
The best way depends on your needs. Selling online offers higher payouts, while kiosks provide immediate cash. - How much of the gift card value will I receive when cashing out?
Payout rates vary depending on the method. Online platforms typically offer 70-92% of the card’s value, while kiosks offer 50-70%. - Are there any fees associated with cashing out gift cards?
Yes, some platforms and kiosks charge transaction fees, so it’s important to check before proceeding. - Is it safe to sell gift cards online?
Yes, but stick to trusted platforms with clear policies, good customer reviews, and secure payment methods. - What should I do if my gift card is lost or stolen?
Contact the gift card issuer immediately to report the loss or theft and inquire about a replacement. - Can I cash out a partially used gift card?
Yes, you can cash out partially used gift cards, but the payout will be based on the remaining balance. - Do gift cards expire?
Some gift cards may have expiration dates, so check the terms and conditions before attempting to cash out. - What states have laws requiring retailers to cash out gift cards?
California, Colorado, Maine, and Washington have laws requiring retailers to cash out gift cards with small remaining balances. - How can I check the balance on my gift card?
You can check the balance by visiting the retailer’s website, calling the customer service number on the back of the card, or using an online gift card balance checker.
Ready to take control of your finances? Visit money-central.com today for more valuable tips, tools, and expert advice. Whether you’re looking to improve your budgeting skills, find the best investment opportunities, or get personalized financial guidance, money-central.com is here to help you achieve your financial goals.
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