Why Can’t You Buy a Gift Card with a Gift Card?

Gift cards make your shopping experience in retail stores very simple and easy. If you give the gift card as a gift the recipient has the chance to decide what they want as a gift. However, many people wonder if they can buy a gift card with a gift card.  

In most cases, you cannot buy a gift card with a card. This restriction applies to most retailers and store-specific gift cards.

In this blog, you will learn why the limitation exists, what gift card options are available and what allows or restricts this transaction.  

Which Gift Cards Can Be Used to Buy Other Gift Cards?

There are rare open-looped gift cards, such as:

1. Visa gift cards
2. MasterCard gift cards
3. American Express gift cards

These cards act like cash and can be used in any retail store and can be used to purchase gift cards. 

The thing about open looped gift cards is that they function as a debit cards. There are no limitations on what you can buy with a gift card. You can check these gift cards out on the Send Credit platform.  

What Gift Cards Cannot Be Used to Buy Other Gift Cards? 

Most gift cards out there are store specific gift cards. This is what prevents such gift cards from being used to buy a gift card. It does not matter what gift card you have.  

It could be a retail giant like Walmart or Target, or even specialized stores like Starbucks and CVS. These brands have a policy that stops you from buying another gift card using their branded gift card.  

Here are some of the gift cards in the USA that cannot be used to buy a gift card: 

1. Walmart gift card 

2. Target gift card 

3. Amazon gift card 

There are other gift cards too, like Best Buy, Home Depot, and Starbucks. This limitation can be an issue especially when you have balance left in another gift and you want to transfer it to another brand. 

Reasons Why Gift Cards Cannot Be Used to Purchase Other Gift Cards

There are several reasons that prevent you from using a particular gift card to purchase another one. Here are some of the common explanations: 

1. Fraud Prevention 

If a retailer allows their gift card to be used for the purchase of other gift cards this can open a world of fraudulent activities. Due to the rise in gift card frauds, hackers and criminals may use stolen credit cards to buy gift cards. 

This can make it difficult for anyone to trace. Limiting this capability can help the businesses protect themselves from these types of frauds. 

2. Prevent Money Laundering 

Gift cards may also be used as a tool for money laundering. If a person could endlessly cycle through a gift card, then this could become a loophole. 

A loophole in which could disguise illegal activity. This restriction is a way for retailers to comply to the anti-money laundering regulations. 

3. Encourage Store Loyalty 

Store-specific gift cards are made to ensure that a customer spends their money on a particular product in that store.  By allowing users to buy other gift cards the company can lose business to its competitors. 

This system helps the company put in place restrictions that keep the customer’s money within the firm. This also promotes brand loyalty and gets retailers repeat business.  

4. Compliance Regulations 

There are regional laws in place different for each region that govern the use of gift cards, particularly in terms of fraud and taxation.  

Retailers also deploy restrictions according to the gift card region and the policy of the company itself that is to be implemented in the country.  

Alternatives to Buying Gift Cards with Gift Cards 

If you still want to buy a gift card, you can consider alternatives.

Following are some of the easiest alternatives: 

1. Use a Credit or Debit Card

The easiest way to purchase a gift card is by using a debit or credit card. This transaction does not have any restrictions and can be completed at most retails out there.  

2. Prepaid Visa or MasterCard

Cards like prepaid Visa and MasterCard are popular ways to buy another gift card. This is because these cards are like debit cards which makes this option much more flexible. 

3. Gift Card Exchange Websites:

There are many platforms out there which provide you with the option to exchange your existing gift card for other gift cards or even for cash. Websites like Raise and Cardpool provide you with this service. 

4. Use the Gift Card for Personal Use

If you fail to get rid of the gift card, then you can use the existing gift card to buy items from that retailer. Then you can buy the new gift card using an accepted payment method. 

Final Thoughts 

To wrap up, it might be inconvenient, but retailers restrict the use of gift cards to buy a gift card due to the threat of fraud, money laundering, and tax evasion.  

Almost all prepaid gift cards come with this limitation. However, there are gift cards like Visa, MasterCard and American Express that have no restrictions due to their resemblance with debit cards. 

Embracing the restrictions and exploring alternate ways to make the most out of your gift cards feeling limited. 

If you want to explore gift cards online, Send Credit is a secure platform to buy your gift cards.