How To Turn Gift Cards Into Cash

Every year, for the last several years, my dad has bought me a gift card to H&M for Christmas. It's a gift that sounds generic, but one I actually consider very thoughtful.

Last month, after neglecting to spend my H&M money (nearly $200 worth) for two years in a row, I replenished my summer and early-fall wardrobes — during H&M's summer sale, to boot. When I was younger, my parents would take my brother and me to Toys "R" Us for each of our birthdays and let us ball out. Now that I've aged out of Polly Pocket (maybe) and buy all my own books, figuring out what to get me is much harder. So, bring on the gift cards!

Many other consumers seem to be in the same situation as my dad: Gift card sales are projected to reach $149 billion this year, per WalletHub. "Gift card spillage" (leaving the money unused) has also "declined significantly (81%) since 2009 due to the passage of the Credit CARD Act in May of that year," the company says. "The CARD Act prohibits gift card funds from expiring for five years from the date of issuance."

The law gives you plenty of time to find something you like, but in case you don’t find anything (or would much rather use the money for something else) you do have some options when it comes to turning your gift cards into cold hard cash. Here are some best practices:

There are some things you buy and sell on Craigslist or eBay, and other things you'd handle directly with a middle-person or dealer. Gift cards may not be diamond rings, but you still want to ensure that you're selling an item a customer feels comfortable purchasing. It’s important both from a financial standpoint, as well as a security one.

“There are a lot of places out there that would buy them, perhaps, but you can't be sure they're reputable," says Dr. Audrey Guskey, an Associate Professor of Marketing at Duquesne University's Palumbo Donahue School of Business. She advises that you sell your gift cards on sites such as MonsterGiftCard.com, GiftCardZen.com, GiftCardGranny.com, and CardPool.com.

There are some scams to be aware of, she adds. For example, some people might sell and send their $50 gift card to a person who promises to Venmo the money, only to end up with nothing.

"What you want is a company that's going to back their product," says "Gift Card Girlfriend" Shelley Hunter, an expert and blogger at GiftCards.com. "CardPool has a one-year guarantee that if you buy a gift card, you know for at least a year that it will work for the dollar value stated when you bought the card. They also will guarantee that if you sell your gift card, you will get cash back.

She says the site uses a variety of fraud screening measures to ensure that sellers don't use the value surreptitiously — "the most common fraud that happens in gift card exchange." They also vet sellers and provides customer service to buyers.

"There are a number of people who sell gift cards on sites like eBay, Nextdoor, Craigslist, and Facebook, but those are the ones I caution people to avoid because you don't really know who you're dealing with,” she says.

You might feel giddy at the thought of getting cash for every gift card that someone gives you, but you won't always be in luck. When selling your gift card, you'll want to consider the time of year, card brand, and whether that company appeals to lots of people before you list it.

"With cards [from] Target, Walmart, and other big department stores that appeal to a large range of people, for a wide range of product, you can get a pretty high offer — as high as 92% of the face value," Hunter says. "Similarly, if you're looking to buy that card for a discount, you're only going to get 5% off the value because people want those cards."

On the flip side, she adds, cards from niche retailers like teen or children's clothing stores may be harder to sell. Goods from companies like those will only appeal to a certain demographic. Additionally, while holidays are popular time for gift-card giving, you'll have a harder time selling them in off-seasons like October. "You might only get 65% of the value of the card," at that time of year, Hunter says.

You'll want to have your bases covered before you sell a gift card. First: Check the balance. Someone might give you a gift card they say is worth $75, when they only put $50 on it. Or, perhaps you used some of the balance and want to sell the card with the remainder. Either way, it’s a good idea to make sure you're being upfront and accurate.

"Whatever reseller you use will validate that. Then, you send it in and then they re-validate it again," Hunter says. "If you send it in and they say there's nothing on the card, you are the one who looks like they're pulling a scam."

Some companies won't allow you to check the balance until you upload the card to your account — which can make it look like you're double-dipping if you try to sell it to someone else. Some companies (including Starbucks and iTunes, Hunter says), won’t allow buyers to check the balance of a gift card without linking it to an account. So, if you buy someone music and add it to your iTunes account to check the balance, it will look like someone is trying to steal your gift card if you sell it to someone else. What’s more, if merchants disable the automatic balance check, resellers may not accept that gift card.

You could make it work sometimes, Hunter says, but reselling cards like that is successful on a case-by-case basis.

Grocery store aisles are littered with gift cards to a wide variety of places, from Amazon, to Best Buy, and Barnes & Noble. To be fair, it’s easy to overlook gift cards to the same store you’re shopping at: After all, why spend money on a Walgreens gift card when you're already shopping there?

The answer is that you could be getting perks while spending the same amount of money via a gift card. Some grocery store gift cards will include discounts on things like gas or clothing at other retailers that amount to twice-over savings for you, Gusky explains.

"For example, my daughter is doing major construction on her house, so she and her husband go to Giant Eagle — a grocery store in Pittsburgh — and buy Giant Eagle cards,” she says. “Then they use them at Home Depot and get points toward free gas."

In other cases, a drug store like Rite Aid might sell gift cards that give you points back toward the store for certain purchases. It can't hurt to read the fine print or ask — and it'll certainly help your wallet.