Do You Get Cash Back When Buying Gift Cards?
Imagine you're at the checkout line during the holiday rush, stacking up a few gift cards for friends and family. They're convenient, thoughtful, and let's face it, a lifesaver when you're stumped on what to buy. But as you swipe your credit card, a question pops into your head: Am I getting any cash back on this? It's a smart thing to wonder about, especially with rising costs everywhere. Cash back rewards can add up, turning everyday purchases into little rebates that pad your wallet.
So, do you get cash back when buying gift cards? The short answer is yes—but it's not always straightforward. It depends on where you buy them, how you pay, and what tools or programs you're using. Cash back typically means earning a percentage of your spending back as a credit, statement adjustment, or even cold hard cash. For gift cards, which are essentially prepaid vouchers for stores or services, the rules can vary. Some credit cards treat them like regular purchases, while others flag them as non-qualifying. Retailers might have their own policies, and apps can sweeten the deal.
In this article, we'll break it all down and explore the basics of cash back, dive into credit card strategies, look at retailer specifics, and highlight online platforms like Gift Card Granny that make saving easier. By the end, you'll know how to maximize rewards without falling into common traps. Whether you're a savvy shopper or just dipping your toes into rewards programs, there's something here to help you stretch your dollars further. Let's get started.
Understanding Cash Back Basics
Before we jump into the nitty-gritty of gift cards, it's worth clarifying what cash back really entails. At its core, cash back is a reward system where you earn a portion of your purchase amount back—usually 1% to 5%, depending on the category. It's like a mini rebate that encourages spending with certain cards or through specific channels. Popularized by credit cards, it's now extended to debit cards, apps, and loyalty programs.
Types of Cash Back when Buying Gift Cards
There are a few main types. Credit card cash back is the most common, where issuers like Visa or Mastercard partner with banks to offer percentages on qualifying purchases. Then there are store-specific programs, like Target's RedCard, which gives 5% back on in-store purchases at Target. Keep an eye out for discounted gift cards at Target for some extra savings. Cash back apps, such as Rakuten or TopCashback, act as middlemen, giving you rebates for shopping through their links. Finally, online shopping portals tie into these, often letting you stack rewards.
Now, why are gift cards a bit of a wildcard? Gift cards are prepaid, so they're not always seen as "regular" merchandise. Credit card companies use something called Merchant Category Codes (MCCs) to classify purchases. If a gift card purchase falls under a grocery MCC at a supermarket, it qualifies for bonus cash back just like normal groceries. But if it's from a standalone gift card kiosk or certain online sites, it could be coded differently and earn nothing extra.
Eligibility hinges on a few factors. Location matters—buying at a qualifying retailer like a grocery store often works better than directly from the brand's website. The type of gift card plays a role too; physical cards differ from digital ones in how they're processed. And don't forget limits: Some programs cap rewards at certain amounts per quarter.
Take a real-world example. Suppose you buy a $50 Starbucks gift card at your local supermarket using a credit card that offers 3% back on groceries. If that purchase counts as a grocery item, you earn $1.50 back. But if you buy it directly from Starbucks.com, it counts as a separate category, meaning you will not get that same cash back. Understanding these basics sets the stage for smarter strategies, ensuring you're not leaving money on the table.
Gift cards make excellent gifts, and giving them is all the sweeter when you earn cashback when buying gift cards.
Cash Back on Gift Cards via Credit Cards
Credit cards are often the powerhouse for earning cash back on gift cards, but success depends on choosing the right one and knowing the rules. Many cards offer rotating or fixed bonus categories that amplify your rewards. For instance, cards with grocery bonuses are goldmines because supermarkets frequently sell third-party gift cards for restaurants, retailers, and more. This does, however, limit your gift card purchasing to in-store locations, and you can only purchase the cards that the grocery store carries. Let’s look at a few examples of credit card cash back programs.
Chase Freedom Flex rotates categories quarterly, sometimes including wholesale clubs or department stores where gift cards abound. If the current quarter offers 5% back on groceries (up to $1,500), buying gift cards there could yield serious returns.
American Express's Blue Cash Everyday gives 3% at U.S. supermarkets on up to $6,000 annually, making it ideal for stocking up on gift cards.
Citi Double Cash offers a flat 2% on everything, which is reliable but not as lucrative for targeted buys.
Capital One SavorOne offers 3% on dining and entertainment—perfect for restaurant gift cards bought online.
Discover It matches all first-year cash back earnings, doubling your gift card rewards.
These cards are all strong options. Just remember, carrying a balance negates rewards due to interest charges. Used wisely, credit cards turn gift card buys into a rewarding habit. Always avoid spending more on your credit card than you can pay off at the end of the month. Credit Card debt is a serious problem, and the interest will always outweigh any cashback you receive.
Do gift cards always qualify? Not necessarily. Issuers scrutinize purchases to prevent abuse, like buying gift cards to manufacture spending for sign-up bonuses. Amex, for example, excludes gift cards from bonus categories if bought at office supply stores, but allows them at supermarkets. Visa and Mastercard gift cards (prepaid and reloadable ones) often don't earn bonuses because they're coded as financial services. Always check your card's terms—fine print like "excluding prepaid cards" is common.
To maximize savings while you shop, always shop at bonus-eligible spots: Big box stores like Costco and Sam’s Club often sell select gift cards at a discount already, but you need to be a member to shop there. Pairing their discount with additional cashback increases your rewards. For big spends, like corporate gifting, use cards with no caps on base rewards. But watch for pitfalls: Some stores add fees for gift cards over certain amounts, eating into your cash back. Since gift card fraud is so common, your bank might flag a purchase and freeze your account. Make sure to keep an eye out for alerts from your card so you can confirm it is you making these purchases.
Shopping in-store maximizes potential savings, but there are many ways to get cash back when buying gift cards online as well.
Retailer and Store Policies
When it comes to buying gift cards in person or online, retailer policies can make or break your cash back game. Not all stores treat gift cards the same, and understanding their rules helps you navigate for the best deals.
Start with big-box retailers. At Walmart, gift cards qualify for cash back if you use a qualifying credit card, but their Walmart Rewards program doesn't directly apply to third-party cards—it's more for Walmart-branded ones. Target's RedCard, however, gives 5% off all purchases, including gift cards, which acts like instant cash back. Costco is generous; their Executive Membership offers 2% back on everything, and gift cards count fully since they're sold in-warehouse.
The online marketplace is less rewarding due to the ease of purchase. Amazon sells tons of gift cards, but its Prime Rewards Visa only gives bonus cash back if it's an Amazon gift card (5%). Third-party ones might just get the base 1-2%. Best Buy's My Best Buy program offers points on gift card buys, redeemable as cash back, but exclusions apply for certain brands. eBay sometimes runs promo codes that stack with cash back apps, but direct cash back from eBay is limited.
Specialty sellers like grocery chains are often the sweet spot. Kroger or Safeway sells gift cards at the register, and if your credit card has a grocery bonus, you're golden. Pharmacies like CVS or Walgreens frequently run promotions, like "buy $100 in gift cards, get $10 back," which is direct cash back. But watch for fine print—some limit to specific cards or require coupons.
Shopping seasonally often provides opportunities for more savings. During holidays, retailers like Kohl's offer extra cash (Kohl's Cash) on gift card purchases, which you can use later. Black Friday deals might bundle gift cards with bonus rebates. As always, keep your eyes open for limitations to these deals.
In 2025, with digital shifts, more retailers are integrating apps for seamless tracking. Overall, in-store buys at bonus-category stores yield better cash back than direct brand sites. Shop around, and you could turn a simple gift card purchase into a multifaceted savings.
Using Apps and Online Platforms for Cash Back
If credit cards are the foundation, apps and online platforms are the boosters for cash back on gift cards. These tools let you stack rewards, often without changing your buying habits much.
Cash back apps lead the pack. Rakuten (formerly Ebates) offers up to 10% back when you shop through their portal for gift cards from sites like Raise or CardCash. Using these sites is excellent when buying more niche gift cards — buying discounted Amazon gift cards rarely nets even 1% savings online. Ibotta focuses on groceries, so buying gift cards at partnered stores can trigger rebates—scan your receipt, and voila. Dosh links to your card and automatically applies cash back at select merchants, including some gift card sellers.
Browser extensions make it effortless. Honey or Capital One Shopping scans for codes and cash back opportunities during checkout. For gift cards, they might find 2-5% offers at retailers like Staples, which sells business gift cards.
Platforms like Gift Card Granny are a one-stop shop, aggregating discounted gift cards from various sellers and giving cash back on their gift card purchases. Plus, you can link through cash back portals; for example, shopping at Gift Card Granny via Rakuten might add another bit of savings. While shopping online nets fewer savings than in-person, there are still plenty of opportunities to earn cash back when buying gift cards.
Stacking is key: Use a bonus-category credit card, go through a cash back app, and buy from a discounted platform. A $100 gift card could effectively cost $85 after all rebates. Tips include verifying app partnerships, setting alerts for deals, and redeeming promptly. There is no reason to let your cash back grow on platforms; always redeem it when you get the chance.
These methods democratize savings, making cash back accessible even without premium cards. This being said, always stay cautious around cash back deals. If anything looks like it is too good to be true, it probably is. Stick to well-reviewed sites like Gift Card Granny, credit cards from trusted banks, and never reveal sensitive details online.
Pros, Cons, and Best Practices
Earning cash back on gift cards has clear upsides. You save money on your purchases, helping extend your budget for the season. Gift cards make great gifts, and rewards build credit scores if paid off. It's also a low-effort way to budget, especially for holidays.
Buying gift cards and getting cash back is a great way to save — unless you never use the gift card. Over 40% of Americans have recently received a gift card that they will never use. While you cannot control what happens to gift cards you give to friends and family, always create a plan about spending gift cards you purchase or receive as gifts. If you get a gift card to a store you don’t usually shop at, consider selling it online. You lose a lot of value, but getting 60% of a card’s value in cash is far superior to sitting on it and never spending it.
Getting cash back on gift card purchases is a fantastic way to extend your budget around the holidays.
So, Do You Get Cash Back When Buying Gift Cards?
In summary, yes—you can get cash back on gift cards with the right credit cards, retailers, apps, and platforms. From grocery bonuses to stacked apps, opportunities abound to save. Just mind the rules to avoid disappointments.
Ready to start? Head to Gift Card Granny for discounted options and potential cash back ties. Smart shopping like this keeps more money in your pocket—happy gifting!