Discover cashback rewards can be earned a number of different ways including ordinary 1% credit card rewards, 5% rotating categories, the Double Cashback promo, the Discover Deals portal, and Refer-a-friend bonuses.
In this post, we’ll recap the various ways of redeeming Discover rewards.
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Cash Back
The easiest redemption option, used by most people, is to redeem Discover rewards for cash back.
There are two ways of doing so: get cash back as a statement credit on your Discover credit card statement or get the funds sent directly to the bank account of your choice.
There’s no minimum redemption threshold for the Cash Back option.
Gift Cards
Discover also has an option to redeem rewards for gift cards or e-gift cards instead of cash.
These gift cards offered by Discover are discounted, meaning that you’ll get more than your cash back balance in the form of a gift card. For example, you might use $70 in Discover Rewards for a $75 Whole Foods gift card.
The discount varies by the card. A Banana Republic gift card is currently discounted 20% (pay $80 in rewards for $100 gift card) while a CVS gift card is discounted only 10% (pay $45 in rewards for a $50 gift card).
There are dozens of brands offered – browse the available options to find one you use often. Popular brands include: Staples, Shell, Whole Foods, Sears, JC Penney, Kohl’s, Lowe’s, Hyatt, Macy’s, Nordstrom, Nike, Neiman Marcus, Sephora, iTunes, Starbucks, IHOP, Domino’s, Olive Garden, Panera, Overstock, TJ Maxx, TGI, Gap, and Banana. There are dozens of other options too.
The most common denominations available are $25, $50, or $100, but some cards come in other amounts. Some brands will offer a few different denomination options, and some will have just one available denomination.
As always, be sure to check the second-hand gift card exchanges before buying with Discover to see if they offer a better discount on your desired card.
E-Gift vs. Physical Cards
When ordering a gift card, take note of whether it will be physically delivered or electronically delivered. Some cards will have the option of physical gift or e-gift, some will be physical only, and some will be e-gift only.
The electronic option means it will be instantly available as soon as you check out while physical cards take 7-10 business days to deliver.
If you’re planning on using the gift codes online or for reselling (see below), there’s an excellent trick from Demflyers to be able to extract all the gift codes from electronic gift cards with Javascript. You can read more details in their post, but what’s important to know is that it needs to done immediately after checkout. There’s a special link given then with all the gift cards in one PDF, and the Java trick only works with that link.
Reselling Gift Cards
Even if you won’t be able to use the gift cards, it could still make sense to choose the discounted gift card option for purposes of gift card resellering.
Many of us can’t make use of the discounted gift cards but still redeem Discover rewards for gift cards with the intent of reselling. The idea is that by reselling these gift cards, we’ll end up with a slightly better return than redeeming for cash.
It’s probably not worthwhile for small redemptions, but some people might have hundreds or even thousands of dollar worth of Discover rewards. With gift card reselling, it might be possible to milk it for an extra few percent – $1000 might turn into $1050 with a little work, for example.
The best few options I’ve seen for reselling are Staples and Nike. (Note, these details will change over time and market conditions; this is just meant as an example.)
Staples gift cards are showing on Discover at a 20% discount and are available both as physical cards and e-cards. Unfortunately, Discover only carries $25 denominations for $20, no higher denominations are available, but using the Demflyer trick (above) it’s easy to process many cards at once.
Staples gift cards can usually be resold for around 85%+, but this will depend which exchanges you sell to. This means a gain of 5% or more by redeeming for gift cards versus cash. If you have $800 in Discover cash, you can buy $1000 in Staples gift cards and sell them for $850, a $50 gain.
Another good option is buying Nike gift cards. These typically resell for around 84%, making it slightly less profitable than Staples, but your exact sell-rate will always depend on your selling relationships. Nike has the advantage of being available in both $50 and $25 denominations.
There are likely a number of other options that can make sense for reselling, but these are two solid deals that can work for most people. Using these methods, you’ll give a small boost to your Discover rewards with a bit of effort.
Travel/ Car Rental
Update 3/10/18: Seems like these travel options are currently unavailable.
There are a few options for using rewards toward travel. On a basic level, you can purchase Hyatt or Best Western gift cards at 10% off; see Gift Cards, above. Those are the only hotel brands I see. And I don’t see any airline gift cards.
For car rentals, there is an interesting option available to get a $40 Enterprise, Alamo, or National gift certificate for just $20. However, these certificates have some limitations. Most importantly, you can only use one certificate per rental. The maximum you’ll save on a rental is $20.
Using this certificate forces you to rent directly from Enterprise/National/Alamo which might mean losing out on shopping portal cashback which you can get from booking sites like Priceline. And it might also affect your ability to use other discounts or promotions on the rental.
Using these certificates might be a good deal on a $40 rental, but on a week-long rental you might do better with portals or other promo codes.
Another thing to be aware of is that it’s not clear if using these certificates will negate the insurance offered by your credit card. If you have your own insurance, that might not be the biggest deal.
Shop with Points
Amazon partners with Discover (as with many other card issuers) to allow us to pay for Amazon purchases with our Discover points. This redemption is a $1-to-$1 redemption so there isn’t usually any benefit in using it. We’re better off cashing out the points and using a credit card to buy on Amazon.
The Shop with Points option is occasionally beneficial when there is a promotional deal for using Discover points on Amazon.
It was recently in the news that Paypal partnered with Discover to allow using Discover Rewards on any Paypal purchase. I don’t see that option available so it’s probably not yet active.
Charity
Discover partners with a few charities, including The Red Cross, Make-A-Wish and a few others.
This redemption is a $1-to-$1 redemption, and there isn’t any benefit in donating points versus cashing out and then donating cash. Cashing out and then donating will yield you a tax write-off too, while points donation probably won’t. That said, some people might like the idea of giving away their points and that’s great!
Trying to redeem for gift cards has resulted in “This page is temporarily unavailable” for at least the past few weeks for me…
Hmm
It looks like Enterprise, etc. car rental certificates have been removed from Discover redemption options. I am no longer seeing any.
I’m also not seeing any gift cards in travel other then Best Western gift cards
It looks like all Travel redemption options have been removed from cashback bonus (all rental car and hotel gift cards). I know they also reduced some benefits effective 28Feb2018. I wonder if this is part of cutting costs or forcing customers who want travel options into the miles card (vs the chrome card)? DOC needs to update the travel section (basically, delete it).
Will do, thanks
Great post! Very good timing for me, and many others- just after my double points posted! (That apple Discover promo last winter got many into a new Discover It card.) Thanks!
What about cruises? The certificate they offer seems sketchy..
The way i maximize the value is Use it to buy Groupon Gift Card (10% Discount)
Use Upromise Clicks to get 5% cashback on groupn (Any payment method)
Redeeming points on Amazon is a worse deal than just paying for the full order with your Discover card, getting the 1% reward, and then paying your card with your reward balance (which now includes the 1% from the Amazon order).
I wish they gave a small incentive to deposit cb to your checking like other banks do. None of the giftcards interests me much.
Considering they are always after me to open a savings account, I’m a little surprised the idea “save 5% more when you transfer your CB to Discover Savings!” hasn’t been executed on…
Is there any way to use the National/Alamo/Enterprise with a corporate contract, but *not* a coupon? Would be worth it for me if so.
Yes, it is entirely permissible to use the Discover coupon with a contract code at National etc. — you just can’t use it with another coupon. Basically, if no other “decent” coupon is applicable to your rental, the Discover coupons you buy for $20 off $40 are a good deal. It all depends on your personal car rental patterns.
I use the National/Alamo/Enterprise coupons for my Discover cashback, but they only save me money on certain rentals — usually short ones, and usually mid-week rentals. The “problem” is you can’t add another coupon to the rental. Like if there’s a $25 off weekend coupon publicly available, it makes no sense to use a $40 Discover coupon that you’ve “paid” $20 for. On the other hand, if you just need a car for a day — especially one-way — it’s a real $40 savings.
My overall Discover strategy is to put enough spending on my Discover card (at least during the first year when the earnings are doubled — my wife and I just “swapped” cards) to meet my car rental needs. We’re stockpiling credits to last us a couple years. Otherwise, I don’t see that much appeal in using Discover.
If a gift certificate is used for car rental discounts, does it affect the rental insurance provided by credit cards (in my case with Chase Sapphire Reserve)?
If I’m not mistaken, I recall reading that gift card usage might negate insurance. In this case, it’s a little less clear since the gift certificate comes off the price more like a promo code (from what I gather), so it might not negate it. YMMV. I’ll add that point.