Can You Get Cashback on Gift Cards?
Gift cards have become an indispensable part of modern gifting and spending. In the U.S. alone, consumers spend over $100 billion annually on these versatile cards, making them a staple for holidays, birthdays, and everyday rewards. But amid rising inflation and economic pressures in 2025, many shoppers are asking: Can you get cashback on gift cards? The answer is a resounding yes, and it's more accessible than ever through various methods like rewards on purchases or converting unused cards to cash. This comprehensive guide dives deep into how cashback works with gift cards, exploring strategies, platforms, historical context, tax considerations, and more. Whether you're buying for others or treating yourself, platforms like Gift Card Granny make it simple to save big while earning extra. We'll cover everything from beginner basics to advanced tips, helping you maximize your returns safely and efficiently.
Understanding Cashback on Gift Cards
At its core, cashback refers to receiving a portion of your spending back in the form of money, credits, or rewards. In the gift card world, this manifests in two primary ways: earning rewards when purchasing a gift card or obtaining cash by liquidating an unused one. For example, buying a $50 Amazon gift card through a cashback portal might net you 5% back, effectively reducing your cost to $47.50. However, misconceptions abound—many think cashback means withdrawing money directly from a gift card at an ATM, which is rarely allowed due to issuer policies prohibiting cash advances.
Traditional cashback on purchases treats gift cards like any other item, where your credit card or app rebates a percentage. This is distinct from "cash for cards" exchanges, where you sell a card for less than face value but get immediate funds. In 2025, with digital wallets and apps proliferating, hybrid options are emerging, like apps that scan receipts for gift card rewards. For instance, programs from retailers like Target or Walmart allow earning gift cards as cashback on everyday purchases. Understanding these nuances is key to avoiding pitfalls, such as fees that erode your savings or restrictions on certain card types. Ultimately, cashback enhances gift cards' appeal by turning them into a savings tool rather than just a convenience.
Being able to earn cashback on gift cards makes them even better to buy as a gift or for yourself.
Ways to Earn Cashback When Buying Gift Cards
Earning cashback on gift card purchases is one of the smartest ways to stretch your budget, especially in 2025 when economic trends favor reward maximization. This section explores three main avenues, with real-world examples and current rates to help you choose.
Cashback Credit Cards
First, cashback credit cards are a powerhouse for this strategy. By using a rewards card to buy gift cards, you earn rebates on the transaction itself. Top picks for 2025 include the Citi Double Cash® Card, which offers 2% back on all purchases (1% when you buy, plus 1% when you pay). The Chase Freedom Unlimited® provides unlimited 1.5% cashback everywhere, with bonuses in categories like grocery stores, where gift cards are often sold. For higher earners, the Wells Fargo Active Cash® Card delivers 2% unlimited cashback, ideal for bulk gift card buys. Even store-specific cards like Amazon's Prime Visa offer up to 5% back on Amazon gift cards. The Discover it® Cash Back stands out with rotating 5% categories that sometimes include gift card retailers, potentially yielding up to 5% on purchases. However, watch for caveats: Some issuers code gift card buys as "cash equivalents," excluding them from bonuses, so always check terms.
Cashback Portals and Apps
Next, cashback portals and apps amplify savings by routing your purchases through their sites. Platforms like Rakuten offer 2% back on sites like Giftcards.com, with occasional spikes during promotions. Apps such as Ibotta and Fetch allow earning gift cards or cash by scanning receipts from gift card buys, with Ibotta specifically touting free gift cards on groceries, including bundled cards.
Gift Card Granny's Cash Back Rewards
Finally, Gift Card Granny's Cash Back Rewards program deserves special mention for its seamless integration. As a leading aggregator of over 1,000 brands, they offer cashback on every purchase. In October 2025, their Holiday Gifting Kickoff Sale provides 5% off select cards like ULTA and Sephora with promo code PREP5, plus cashback on top. Earnings accumulate and can be redeemed for free eGift cards or cash payouts once thresholds are met. Unlike generic portals, Gift Card Granny verifies all cards for authenticity, ensuring secure transactions with instant digital delivery or same-day shipping. This makes it ideal for bulk buys, where stacking their rewards with a 2% credit card could yield 7%+ total savings.
Getting Cash by Selling or Exchanging Gift Cards
If earning cashback upfront isn't your goal, converting unused gift cards to cash is a viable alternative—essentially "cashback" after the fact. In 2025, with digital marketplaces thriving, several platforms facilitate this, though payouts are typically 70-92% of face value due to fees.
Top Platforms for Selling
Leading the pack is CardCash, which buys cards from major retailers and pays via check, ACH, or PayPal, with rates up to 92% and a 45-day guarantee. Raise allows selling directly to buyers, charging a 15% fee but offering competitive rates and instant payouts via ACH. GiftCash focuses on quick exchanges, paying 80-90% with low verification fees. Gameflip caters to gaming cards but expands to general ones, with seller fees around 10% and crypto payout options. For businesses, KadePay stands out with tools for selling eGift cards, minimizing fees for bulk transactions.
Physical Options and Safety Tips
Physical options include Coinstar kiosks, which charge about 11.9% but provide instant cash—no shipping needed. However, avoid scams by sticking to verified sites; always check reviews and use two-factor authentication. While Gift Card Granny primarily sells gift cards, they recommend these exchanges for liquidation, emphasizing safety over speed.
The holidays approach quickly! Now is the perfect time to stock up on gift cards for gifts.
Pros, Cons, and Tips
The allure of cashback on gift cards is undeniable, but always weigh the pros and cons before making purchases.
Pros
Pros include amplified savings—stacking methods can yield 10-20% effective discounts—and flexibility, as rewards fund future purchases. It's eco-friendly too, reducing waste from unused cards estimated at $3 billion annually. For businesses, it boosts loyalty; consumers love the "free money" feel.
Cons
Fees on sales (10-15%) diminish returns, and not all credit cards reward gift card buys equally. Scams are rampant, with fraudulent sites stealing card details. Plus, opportunity costs—if you hold cards too long, inflation erodes value.
Tips
Tips for success: Stack relentlessly (e.g., credit card + portal + site discount). Time purchases for sales like Black Friday. Use apps for alerts on high-cashback deals. Verify legitimacy via BBB ratings. In scenarios like holiday gifting, buy in bulk via Gift Card Granny for compounded rewards; for personal use, opt for versatile cards like Visa.
The History of Gift Cards and Cashback Programs
To appreciate modern cashback on gift cards, let's trace their origins. Gift cards evolved from 19th-century paper vouchers issued by department stores for credits or discounts. By the 1970s, retailers like McDonald's and JCPenney introduced thin plastic versions, replacing gift certificates. The big leap came in 1994 when Blockbuster launched pre-loaded plastic cards, paving the way for digital ones.
Cashback programs emerged in the 1980s, with Discover's 1986 "cash back" initiative revolutionizing rewards. By the 2000s, loyalty programs integrated gift cards, enhancing customer retention.
Tax Implications of Cashback on Gift Cards
A common concern: Are cashback rewards taxable? Generally, no—the IRS views them as non-taxable rebates or purchase price adjustments. For example, 2% back on a gift card buy isn't income. However, exceptions apply: Sign-up bonuses over $600 may require a 1099-MISC, and business reimbursements could be taxable. Points redeemed for cash might count as income, unlike gift card redemptions. Consult a tax pro for specifics, but for personal use, you're usually in the clear.
Popular Gift Cards at Gift Card Granny
Gift Card Granny shines with its vast selection, and certain cards stand out for their popularity and cashback potential.
ULTA
Beauty essentials for self-care routines
ULTA gift cards unlock a world of beauty products, from makeup and skincare to hair tools and fragrances, at ULTA Beauty stores and online. Available digitally at Gift Card Granny with discounts up to 10% off during promotions like the October 2025 Holiday Kickoff (use code PREP5 for an extra 5% on select beauty cards), they're redeemable at over 1,300 locations for items like lipsticks, serums, or salon services. With no expiration date and no fees, you get full value every time, and a $50 card can cover a full makeup haul or a luxurious facial. Ideal for birthdays or self-care treats, add a personalized message and festive design for that extra touch, while earning cash-back rewards to sweeten your savings. This card is perfect for beauty enthusiasts seeking high-quality products from top brands, making it a thoughtful gift for anyone building their glam routine.
DoorDash
Food delivery for convenient meals
DoorDash gift cards bring restaurant favorites right to your door, covering a vast array of cuisines from local eateries to national chains, perfect for busy nights or lazy weekends. Snag them virtually at Gift Card Granny at a discount, redeemable through the DoorDash app or website for orders, including delivery fees and tips, at thousands of participating restaurants. No expiration ensures no rush to use, and a $25 card easily funds a satisfying meal like sushi rolls or burgers with fries. Great for holidays or as a quick thank-you, customize with fun designs and messages, and stack with cash-back rewards for even more value. This card appeals to foodies craving convenience, offering endless choices for cravings without leaving home.
Visa
Versatile spending for any purchase
Prepaid Visa gift cards offer ultimate flexibility, usable anywhere Visa is accepted, from online shopping to in-store buys, ideal for budgeting or unrestricted gifting. Purchase them at Gift Card Granny with potential discounts and customization options, redeemable globally for everyday essentials or splurges like electronics or travel. They expire seven years after issuance, with possible inactivity fees after a year of non-use, but no merchant fees, and a $100 card provides ample spending power for a shopping spree or bill payments. Perfect for holidays or graduations, add a personal note, and earn cash-back on your purchase to maximize savings. This card suits anyone needing freedom in spending, turning it into a practical yet exciting gift.
What’s your favorite store? Now is the perfect time to see if you can get cashback at that retailer.
This is how to get cashback on gift cards
From earning rewards on purchases to selling extras for cash, getting cashback on gift cards is a proven way to save in 2025. We've explored methods, history, taxes, and tips to empower your choices. At Gift Card Granny, with over 1,000 brands and robust cashback, you're set for success. Don't miss out—visit Gift Card Granny today to snag deals, earn rewards, and turn gifting into a savvy investment. Happy saving!
Can you get cashback on gift cards — FAQ
Can I get cash back directly from a gift card at a store?
No, most issuers prohibit cash refunds; use it for purchases or sell via exchanges.
Are there fees for selling gift cards?
Yes, platforms like Raise charge 15%, but some like CardCash have minimal verification fees.
How does Gift Card Granny's cashback work?
Earn on every purchase, redeem for eGift cards or cash; rates vary by deal.
Is cashback on gift cards taxable?
Usually not, as it's a rebate, but bonuses may be.
What's the best credit card for gift card cashback in 2025?
Citi Double Cash® for 2% everywhere.
How safe is buying discounted gift cards?
Very, if from verified sites like Gift Card Granny with guarantees.
Can I stack cashback methods?
Absolutely—combine cards, portals, and site rewards for optimal savings.
What if my gift card is lost?
Contact the issuer; many offer replacements for a fee.
Are there apps for earning gift card cashback?
Yes, like Fetch and Ibotta for receipt scans.
How long do cashback rewards take to process?
Typically 30-90 days, depending on the platform.