The Ultimate Guide Approach: What Gift Cards Give Cash Back?
Strategy Stacking, Top Retailers, & Security Measures to Keep in Mind
Main image courtesy of CNBC.
One of the main benefits of using a gift card is its ability to enhance financial liquidity, lock in future expenses, maximize purchase value, and the ability to create multiple rewards on a purchase. You can earn multiple rewards on one transaction after purchasing a card through an online portal or rewards-based payment system.
Earn Cash Back With Granny Rewards
The primary cash-back system for Gift Card Granny is the Granny Rewards program, which was enhanced in late 2025. Through this program, users can earn cash-back rewards for every purchase made using the app or website.
Through the various cashback methods available through Gift Card Granny, users can save money on their purchases by getting 2% back on every transaction with a credit card like Citi Double Cash. Image courtesy of Gift Card Granny.
Cash Back vs. Cash Equivalence
When it comes to maximizing the value of gift cards, it is important to distinguish between cash back and cash equivalence.
Cash Back: A Reward Mechanism
Instead of being a tangible asset, cash back is a form of incentive that rewards you with a percentage of your purchase after you have completed the transaction. It can be represented as a credit or a bank deposit.
Most people earn cash back by using gift cards or high-reward credit cards at supermarkets or through online portals. Some of these programs allow users to redeem their earned cash back for higher-value gift cards. For instance, if you exchange $80 in rewards for $100 worth of gift cards, you'll get back $80 in cash.
Cash Equivalence: An Asset
The accounting and legal term cash equivalence refers to assets that are regarded as stable and liquid. According to Section 132 of the IRS Code, gift cards are generally considered cash equivalents, which can be used for general merchandise and have a readily-determined face value.
Since gift cards are generally considered cash equivalents, they are taxable income for employers. The preferred type of cash equivalents is the general-purpose prepaid card, which can be used almost anywhere. On the other hand, store-specific cards, such as Starbucks gift cards, are considered closed-loop cash equivalents and have restricted liquidity.
The Strategy of Stacking
To get a solid number of at least a 15%+ return, start by upgrading your strategies and implementing "triple-play stacking." This involves creating a secure payment method, an online shopping portal, and a rebate app.
The Multiplier Payment
Chase Freedom Flex is a great way to earn 5% back when you spend at grocery stores and wholesale clubs. You can also buy gift cards for your favorite brands such as Nike, Uber, and Airbnb at the grocery store, which immediately earns you at least a 5% return.
The Shopping Portal
Your shopping portals are the main gateway to transactions. They allow you to earn money from retailers by directing marketing dollars back into your pockets.
To find the best deal on your favorite store, use tools such as CashBackHolic or CashBackMonitor. You can then click on the portal that's most relevant to your needs. Even though you may use a gift card as the payment method, your shopping portal will keep track of the total transaction and provide you with cash back on the purchase.
Receipt Scanning & Product Rebates
Even after you have used a gift card to make a purchase, the value of the receipt remains the same. With the help of receipt scanning apps, you can collect data for market analysis.
The easiest way to scan a receipt is with the app known as Fetch. It allows users to take a photo of any receipt, and it has an eReceipt feature that automatically scans your email for digital invoices and gift card confirmations. With the Receipt Hog app on the other hand, you can convert your receipt into coins or spins. It also allows users to receive cash payouts through PayPal.
Although item-specific rebate apps require more effort to operate, they offer higher payouts. For instance, they can give you up to $5.00 for each item. Ibotta allows users to add offers to their list before they make a purchase. If you use a gift card to buy an item from the app's list, you can claim the cash by scanning the receipt.
The app Shopkick also lets users earn rewards for scanning barcodes as they browse the store. They can then stack these on top of their gift card purchase. Image courtesy of Whop.
Top Retailers
These merchants have the highest "velocity," making them the ideal places to spend and get gift cards with the most cash back.
Amazon
Amazon is a leader in providing rewards and cash back, which offers a variety of products and services that allow users to earn and redeem their rewards easily. Its platform also allows users to stack their rewards with other promotional events for the best possible utility.
Through its various programs, Amazon can provide its customers with various ways to earn back on their purchases. For instance, those who are a Prime member can get 5% back on purchases at Whole Foods Market, Amazon, and Amazon.com. In 2026, its rotating program can increase this to 10% on select items.
When you make a purchase using the Prime Visa, you'll receive 5% cash back. This perk allows you to pre-fund your Amazon account with high-interest rewards. New cardmembers are also given substantial incentives, such as a $150 gift card upon approval.
The company's infrastructure is designed to reward users for their purchases, which can push the total value of their purchases past the initial 5% rebate. You can link your Amazon account to various reward programs, such as the Amex Membership Rewards or the Chase Ultimate Rewards. Amazon often offers promotions where customers can get a discount of up to 40% on their total orders by using just one point.
Target
Reward cards from Target are among the most popular types of gift cards due to their unique ability to offer different brands and their flexibility in terms of trade-in and rewards. Unlike other retailers, Target's Circle Card can be used at the time of purchase and provides a 5% discount.
Through the use of the Target Circle Card, you can get a 5% discount on hundreds of gift cards, including those from companies such as Netflix, Disney, and Uber. You can use the card to purchase a $100 Disney gift card and pay only $95, resulting in instant 5% cash-back on purchases on brands that do not offer direct discounts.
As one of the largest retailers in the country, Target allows customers to turn their unwanted gift cards into store credit through its dedicated exchange program. Through its network of over a hundred stores, you can exchange gift cards from other retailers such as Best Buy and Walmart. Although you typically get around 75% to 85% of the original value, this method provides instant liquidity to gift cards that you don't use.
Through its Tech Trade-In program, Target can help you swap old electronics, such as tablets and smartphones, for its eGiftCards. Its Circle loyalty program also provides additional perks that can complement gift card use.
Walmart
For cash-back enthusiasts, Walmart is a great place to start. It offers a variety of perks and benefits, such as high-rate credit cards and a robust loyalty currency called Walmart Cash.
Through its various perks and benefits, Walmart is able to offer some of the highest cash-back rates in the industry. One of the most popular perks is its OnePay Cash Rewards Card, which allows members to receive 5% back on all purchases.
You can earn 6% back on your purchases when you use the U.S Bank Cash Rewards Visa Signature Card and choose Walmart as your preferred retailer. The American Express Blue Cash Everyday Card gives 3% back on all purchases at Walmart.com, ideal for grocery deliveries and "store pickup."
Walmart Cash
Walmart Cash is a digital loyalty token that may be converted into physical units. Through its partnership with Ibotta, Walmart has been able to integrate various manufacturer-direct offers into its app. These offers can be redeemed for cash when you make a purchase.
Walmart Cash is different from store points in that it allows customers to receive actual money inside the store. For instance, if you have $25 in it, you can ask to cash out and receive the money at the Customer Service Desk.
Posed cards are typically placed at the front of the display by scam artists. Victims can ask for one behind the counter or near the back or middle of the stack. Image courtesy of Retail Brew.
CVS
The loyalty program of CVS Pharmacy is known for its distinctive features. These include its gift card liquidity and unique rebates.
In 2026, the company introduced a variety of active and passive rewards. For instance, members can earn 2% back on every purchase with the ExtraCare program. They can additionally redeem these rewards through the app.
The ExtraCare Plus tier, which costs $5 a month, gives customers a 20% discount on all of the company's products. It also comes with a $10 monthly bonus.
CVS also offers cash-back equivalents for certain healthcare-related activities. Through its Pharmacy & Health Rewards program, customers can earn up to $50 extra bucks every year for participating in various activities. These include filling prescriptions and getting vaccinations.
Credit Card Optimization
Since it's a drugstore, credit card users are prone to spending on items at CVS. One of the most popular cards for this purpose is the Chase Freedom Flex, which gives 3% back on all purchases at the drugstore.
Participating cards, such as Discover, also have a 5% category for drugstores during certain quarters. This allows users to purchase gift cards that can be used for other purchases.
Security & Scams
When it comes to avoiding "drainer" scams, which involve taking card data from a store's racks and then emptying the balance immediately after it has been activated, it is important to adopt a proactive approach.
Drainer Tactics
Criminal groups physically alter credit cards in shops, which costs customers billions of dollars annually. Scammers then place fake stickers over the card's barcode, which they use to divert funds to their own account after scanning it.
After carefully opening the card's packaging, thieves can see the card's PIN by scratching off the protective film. They then use replacement stickers or high-quality adhesive to reseal the package. Once they have the card's data, they can run automated machines to check the balance.
Physical Integrity Checklist
You can first perform the finger test before buying a gift card. If you notice a raised edge or a layer of sticker covering the barcode, it's likely that the item has been tampered with.
Make sure that the card's scratch-off coating is completely intact, and reject it if it feels different from other cards. Also, inspect the packaging for signs of uneven edges, frayed paper fibers, and excess glue.
Gifts Cards Are More Than Just a Gift Idea
A gift card can be a great way to give a present, but it can also be used to add value to a purchase. By understanding the various perks that can be achieved through different programs and promotions, consumers can make informed decisions when it comes to choosing a gift card.
By being a smart shopper who uses the right tools, consumers can maximize their spending and accumulate points that can yield cash back.