Benefits of Getting Cash Back With Gift Cards & How to Get The Most Rewards

A gift card can easily make anyone happy, as it combines the emotional connection that a thoughtful gift brings with the freedom of their personal choice. It acts as a permission slip for indulgence, and it triggers a different neurochemical reward system.

A gift card is different from cash in that it uses a concept known as mental accounting, which categorizes funds based on the source. It allows recipients to indulge without the typical restrictions of budgeting, which also eliminates the need for them to justify their spending. The "treat factor" is that the card is linked to a specific brand and is considered a treat instead of a standard transaction.

Psychological Factors

The psychological appeal of gift cards is their ability to provide people with the freedom to select what they want, which eliminates the stress of giving and the risk of getting a mismatched or bad present. It also makes people feel more valued. Compared to cash, a gift card is perceived as more valuable because it represents a curated experience.

Giving and receiving gift cards can trigger various chemicals in the brain. One of these is dopamine, which is associated with pleasure. When a person receives a gift card, the release of this chemical is carried out in the striatum, which is the brain's reward center. Another chemical, known as oxytocin, is released when people feel safe and secure.

According to psychologists, gift cards are associated with an extended pleasure cycle due to how anxious recipients are about how they will spend their money. Although they are typically regarded as impersonal, contemporary cards can be surprisingly thoughtful. The choice of a card from a recipient's favorite store or boutique shows that the giver is aware of their personal preferences and lifestyle.

Granny Rewards Program Through Gift Card Granny

In late 2025, Gift Card Granny introduced its own cashback program, which is known as Granny Rewards. Through this program, you can earn cash back on almost all the gift card purchases that you make through the site or app.

You can earn rewards through your account and can redeem them for free e-gift cards or cash payouts once you reach certain requirements. You can also refer friends and sign up for their newsletter and write reviews to earn additional rewards.

Stacking different cashback methods can help you save more money on a single purchase with Gift Card Granny, as you can earn 2% cashback on your purchases with Gift Card Granny using a standard credit card such as the Citi Double Cash, which is in addition to the regular Granny Rewards. Other websites such as Rakuten often offer cash back, and Gift Card Granny is a partner site that allows users to find special offers.

Getting Cash Back on Your Gift Cards

In 2025, one of the most effective ways to save money is by getting cash back with gift cards. This strategy can be used as a budgeting tool and a savings instrument, especially since most consumers are worried about inflation.

One of the most important advantages of this strategy is its ability to combine various reward layers. Another advantage is that you can earn double-dipping, which means that you can get additional loyalty points or cash back after the purchase.

You can also use this strategy to get a higher percentage of rewards on your gift cards by shopping at stores that have high bonus categories. Image courtesy of Gift Card Granny.

Holiday Budgeting Done Right

Gift cards have become a powerful budgeting tool, as 39% of holiday budgets were dedicated to them. One of the most important advantages of this strategy is its ability to lock in the prices of your gift cards, which can protect you from future price surges. With the added bonus of cash back, recipients often use their gift cards to treat themselves rather than avoid spending money on certain items.

Various rewards programs provide higher value for gift cards than for cash back. There are also various promotional discounts that can boost the value of your gift cards. For instance, a $25 gift card can cost you $20 in points during a sales event, which adds 20% to your reward.

The immediacy of digital gift cards is significant, as most of them are sent immediately after the purchase. Many of these can also be added to mobile wallets for quick transaction processing. If you have an unused gift card, you can easily convert it into cash through online marketplaces such as Raise or CardCash. In addition, you can also keep your credit card accounts active by redeeming small amounts of points.

Leveraging Cash Back Gift Cards

When using gift cards with high cashback, you must first match the card's reward type to the retailer that sells them. This includes category-specific bonuses and flat-rate rewards.

This strategy involves buying gift cards for places you frequent, such as restaurants and Amazon, and you can then use those at a retailer with higher rewards to lock in a higher rate for future purchases. For instance, if you have a credit card that offers 3% to 6% back at supermarkets, you can buy gift cards for different brands.

Some credit cards, such as Chase Freedom Flex and Discover it Cash Back, have 5% back on purchases within certain quarterly categories, such as drugstores, gas stations, and Amazon. You can also get gift cards for these establishments during the active quarter to take advantage of this perk. If you're in an office supply store, you can get a 5% bonus on purchases within the first three months.

A card with a high consistent rate on all purchases should be used if a purchase doesn't meet the bonus category. Some cards, such as the Citi Double Cash or Wells Fargo Active Cash, have 2% back on all purchases. You can also get 2% back on mobile payments using a variety of credit cards, such as the Apple Card or the U.S. Bank's Altitude Reserve.

Issuers often use gift cards as "cash advances," which comes with high fees and no rewards. To avoid this, ask your bank to lower the limit on your cash advance to $0. Also, if you make excessive purchases with your gift cards, you might end up with an account closed or your rewards taken back.

It's also safer to buy gift cards with household items that are commonly used. Before you make a purchase, make sure that the security seal on the card is intact. Image courtesy of CTV News.

Using Cashback Portals and Apps

Although both Ibotta and Rakuten allow you to earn cash back on gift card transactions, the eligibility rules and process vary depending on the platform. Ibotta gives users instant cash back on eligible purchases, while Rakuten provides a cash back option for those who buy gift cards from certain retailers.

Rakuten

Through its gift cards section, Rakuten allows its customers to earn cash back on their purchases from participating retailers, which is not the case for all its partners. There are a variety of brands that are part of the program, including Sam's Club and Gift Card Granny.

One of the biggest advantages of using Rakuten's gift cards is its ability to stack rewards. With the help of a rewards credit card, you can earn miles or points for making purchases through the company. This can be very beneficial as it allows you to earn both rewards and points from different sources.

You can combine the various coupons and promotional codes offered by Rakuten with your purchases for even more savings, as well as receive welcome bonuses. New users can enjoy a one-time bonus of up to $30 upon their first purchase, with varying referral offers.

The flexibility of how you receive your earnings is another appealing feature of Rakuten. Its customers can opt to receive their cash back through various methods, such as physical checks, PayPal, or American Express points. If you're a frequent traveler, you might want to skip the regular payments and use the company's mobile app to instantly redeem your cash back for gift cards.

Ibotta

Ibotta is a great way to get cash back on gift cards. It's easy to use, offers instant cash back, and it allows you to stack rewards.

One of the main advantages of using Ibotta is that it allows users to get cash back immediately after they purchase a digital gift card. Unlike other methods, this feature does not require a receipt or waiting periods. Another advantage is that it allows users to pay instantly for their gift cards, and this feature works like a mobile payment method, allowing you to complete the purchase in just a couple of seconds.

Ibotta's gift card purchases can accumulate points toward various challenges and bonuses, which can help users reach their goals faster. It also works with hundreds of restaurants and retailers, giving users a wide range of opportunities to earn cash back.

With the flexibility of using a linked debit card or applying your Ibotta earnings, you can easily get cash back on gift cards. The app also has a dedicated gift card wallet that allows users to track their purchases and manage their unspent and spent cards. Another great feature of the app is that it allows users to send their gift cards to their friends and family using text or email.

Better Redemption Values

Different credit card programs offer higher value when it comes to gift card redemptions compared to statement credits. They can also provide better exchange rates and lower point requirements. While the standard ratio for statement credits is one cent for every point, gift card redemptions typically range from 1.1 to 1.25 cents during promotional periods.

Issuers usually reduce the number of points required for a card's purchase during gift card sales. For instance, a $10 gift card with a $1,000 face value might have 900 points instead, which is a 10% reduction. Some cards also provide higher value for gift card redemptions than cash. The Citi Rewards Card has a 1 cent per point exchange rate and only 0.5 cents cash back.

Some credit card programs, such as Discover and American Express, provide different tiered values depending on the merchant. For instance, if you have a $100 gift card from Olive Garden, you can get a 20% bonus. On the other hand, a Starbucks card still has the standard rate. Chase Ultimate Rewards also offers holiday-themed promotions during the October to December period, where points are offered for various brands.

Banks typically offer gift cards as a cost-effective alternative to paying cash because they can negotiate with their retailers for bulk discounts. The card can also help users maintain their loyalty with the bank by encouraging them to respond to promotional emails and apps.

With gift cards, issuers can quickly add rewards to various lifestyle categories, such as fuel, dining, and wellness, without having to develop a separate redemption system for each merchant.

Get Cash Back On Your Gift Cards Today

In general, if you're looking for cashback deals for places that you frequent, and you're comfortable with the terms and conditions, it can be a great way to save money. Especially during the holidays!