Do Pawn Shops Buy Gift Cards

Do Pawn Shops Buy Gift Cards

Understand the Pawn Shop Business Model

Financial institutions, pawn shops offer loans secured by collateralized personal property. The shops also purchase and sell goods directly. Items accepted include jewelry, electronics, musical instruments, and gift cards. Pawn shops are popular because of their quick transactions, accessibility and lack of credit checks.

How Pawn Shops Work

  1. Secured loans: Customers can bring an item to a pawn shop and receive a loan that is based on the estimated value of the item. If the loan has been repaid by the customer, they can retrieve their item. Otherwise, the item is sold by the pawnshop.
  2. Pawn Shops also buy items in cash, and offer immediate payment to sellers.
  3. Selling Item: Items in pawnshops are either purchased from sellers or forfeited by the borrowers. The items are then marked up and sold to the general public.

Gift cards in Pawn Shops

Gift cards are a relatively recent addition to the pawn shop inventory. The trend was driven by the growing popularity of gift cards, and the desire for consumers to convert them into cash. Recognizing this demand, pawn shops have adjusted their business models to meet it.

Why Gift Cards are bought by Pawn Shops

  1. Consumer demand: Many people receive gift cards that they don’t want to use, and would prefer cash.
  2. Profit Margin: A pawn shop can purchase gift cards for a discounted price and then sell them to a higher value, usually through secondary markets.
  3. Low-Risk: Unlike electronic goods or jewelry, gift cards do not lose value over time and are not affected by wear and tear.

How to Sell Gift Cards at Pawn Shops

Selling gift cards to pawnshops is simple, but the process varies depending on each shop’s policy. This is a typical guide that shows you how to sell gift cards.

  1. Evaluation The pawnshop evaluates the gift cards, checking their balance and making sure they are not expired or compromised.
  2. Offer : The pawnshop makes an offer based on the value and demand of the gift card. It is typically a percentage of card value.
  3. Transaction : The transaction is complete if the seller accepts the offer.

Pawn Shops: Factors that influence their offers

There are several factors that influence the price a pawnshop will pay for a gift certificate:

  1. Card balance: A higher balance usually attracts better offers.
  2. Brand : Cards from well-known retailers or those widely accepted are more valuable.
  3. Demand Seasonal demand may affect the offer. Higher offers are likely to be made during holidays.
  4. Condition : The condition of the item can be important, although digital balances tend to be prioritized.

Benefits to Consumers

Gift cards can be sold to pawnshops for several reasons.

  1. Immediate cash: Pawn shops provide immediate cash, unlike online exchanges.
  2. Convenience : The process requires little documentation and is quick.
  3. Accessibility : Many pawnshops are located in easily accessible urban areas.

Consumers’ Drawbacks

There are some disadvantages as well.

  1. Lower value: Consumers receive gift cards that are often worth less than their face value.
  2. Limited Availability Not all pawnshops deal in gift cards and those who do may have different policies.
  3. Potential scams: Beware of dishonest shops that may undervalue or mistreat gift cards.

Pawn Shop Perspective

Gift cards can be a source of both opportunity and challenge for pawnshops.


  1. Expanded Customer Base Offering gift cards can attract a broader range of customers.
  2. Increased Turnover Gift cards are resold at high prices, and often with a large markup.
  3. Market Growth: Pawn shops that deal in gift cards can tap into a growing secondary market.


  1. Verification Issues : It can be difficult to verify the validity and balance of gift certificates.
  2. Market Fluctuations : The demand and value of certain gift cards may fluctuate. This can affect profitability.
  3. Fraud risk There is a fraud risk when dealing with gift cards that are stolen or counterfeit.

Regulation and Ethical Concerns

As with all financial institutions there is regulatory oversight. Gift cards are subject to legal and ethical requirements.

  1. Anti Fraud Measures : Pawn shops are required to implement measures that detect and prevent fraud.
  2. Consumer Protection : They must make sure that they do not exploit consumers who are vulnerable.
  3. Transparency : It is important to communicate clearly about the terms and conditions of the transaction as well as the valuation process.

Compare Pawn Shops with Other Gift Card Exchange Options

There are other options to exchange gift cards for money.

  1. Online Markets Websites such as Raise and CardCash let consumers sell gift cards for a greater percentage than the face value, but they receive funds later.
  2. Gift Cards Kiosks : Automated kiosks can be found in retail locations and provide instant cash, similar to pawnshops but at set rates.
  3. Peer to peer sales: Although selling directly to another individual is potentially more lucrative, it carries more risks and requires greater effort.

Case Studies

Case Study 1: Urban Pawn Shop

A large urban pawnshop added gift cards to its service offerings. In six months they had a 15% rise in foot traffic, and a 20% boost in revenue. Most popular were cards from online and major retailers.

Case Study 2: Rural Pawn Shop

A rural pawnshop experimented by buying gift cards, but the demand was less. They saw an increase in gift card sales during the holidays, which indicates a seasonal pattern.

The Best Practices to Sell Gift Cards To Pawn Shops

Here are some tips for consumers who want to sell their gift cards to pawnshops:

  1. Research : Compare offers from multiple pawnshops.
  2. Verify : Check the expiration date and balance of your gift card.
  3. Don’t Be Afraid to Negotiate : Do not be afraid to negotiate an offer.
  4. Be aware of scams Choose pawn shops that have good reviews and policies.

Future Trends

Gift card transactions at pawnshops are likely to continue growing in the future.

  1. Digital Integration More pawnshops may integrate digital payment and verification systems.
  2. Expanded inventory: Acceptance for a wider range of gift certificates, including those that are used to pay for digital services or cryptocurrencies.
  3. Enhanced security: Fraud detection and anti-theft methods to protect consumers and businesses.

The conclusion 

Gift card transactions have been incorporated into the services of pawn shops to adapt to the changing landscape of consumer financing. Both consumers looking for quick cash and pawnshops seeking to expand their businesses benefit from this adaptation. There are risks and challenges, but the trend shows that the pawn business is increasingly accepting and relying on this asset class. Understanding the dynamics and best practice of selling gift certificates to pawnshops will help consumers make informed decisions, and maximize their value.


  • National Pawnbrokers Association. (n.d.). Understanding the Pawn Industry. Retrieved from NPA website.
  • Consumer Financial Protection Bureau. (2021). Gift Cards: Your Rights Under Federal Law. Retrieved from CFPB website.
  • Raise. (2024). How to Sell Gift Cards Online. Retrieved from Raise website.
  • CardCash. (2024). Sell Gift Cards for Cash. Retrieved from CardCash website.

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