How to turn an American Express gift card (or Visa gift card) into cash

**IMPORTANT UPDATE TO THIS POST:  Please note that this method may not work for you.  Some years ago, when I first made this post, this workaround did the trick without any problems.  PayPal may have changed their policy since then and/or your particular gift card may not be able to be added to your PayPal account as described below.**

You might have received an American Express gift card (or Visa gift card), but instead of spending it at a merchant that accepts Visa or American Express, you want to convert it into cash that can be deposited into your bank account.

There are some ways to do this … but I am going to focus on one way … and it involves PayPal.

You will need:

  • Two (2) PayPal accounts, preferably both belonging to you, one can be personal and the other a premier account for example
  • A bank account (linked to at least one of these PayPal accounts so you can withdraw received funds )
  • Your brain or some form of thinking ability (the ingredients get more obvious as the list goes on)
  • Your American Express or Visa gift card with an available balance on it (that always helps)

1.  Add your gift card as a new credit/debit card to one of your PayPal accounts.  This can be done through My Account | Profile | Add or Edit Credit Card (or by clicking here).

2.  After completing Step 1, a temporary authorization charge of $1.00 (from PayPal) will appear on your gift card statement.  This pending transaction of $1.00 [shown as a debit, or ($1.00) on your statement] will stay for 7 days.  So, for approximately one week, your available gift card balance will be $1 less … for example, if you had a $50 gift card, it will show a $49 available balance until that $1 authorization charge is cleared.

3.  After waiting for about 7 days, your available balance will return back to normal … using the example in Step 2, your balance would return back to $50.

4.  Initiate a payment/send money from the account where you linked the gift card.  This can be done through Send Money | Send Money Online.

5.  Enter all of the information … To (the e-mail address of your other PayPal account), Amount (the entire balance of the gift card), and you could select one of the options from the Personal Tab (e.g. Payment owed, other, etc.).

6.  Click Continue.  When you get to the next screen, make sure that you change the payment method to the gift card that you added.

7.  This is the fun part … if you like fees, which most of us don’t.  Make sure that you uncheck the box that says “I will pay the fee.”  (Otherwise, if you’re sending the entire balance on your gift card, you’ll end up getting charged more than your available balance, and that won’t work.)

8.  Click Send Money.

9.  Open up/log into your other PayPal account.  You should have received the funds that you sent from the gift card, minus any fees.  For example, for a $50 gift card, there is a deduction of $1.75 in fees for using a credit/debit card, so you would really end up receiving $48.25.

10.  While still logged into your PayPal account where you received the funds (and admiring the marvels of modern payment technology), withdraw those funds to a linked bank account.  This can be done through My Account | Withdraw | Transfer to Bank Account.

11.  In about 3-4 business days (sometimes less), those funds will have been electronically transferred/deposited to your bank account.

12.  I just felt like adding another numbered item here just to confuse you more … but seriously, if you have any questions, comments, complaints, cash … feel free to share them with me.  It seems like a drawn out process, but it’s actually pretty simple … it’s not rocket science, trust me!  (I really have to stop overusing that whole rocket science reference even though I’m nominally considered to be a mechanical & aerospace engineer.)