Redeeming Discover Cash Back for Travel Gift Cards – Is It a Good Deal?

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Redeeming Discover Cash Back for Travel Gift Cards – Is It a Good Deal?

Million Mile SecretsRedeeming Discover Cash Back for Travel Gift Cards – Is It a Good Deal?Million Mile Secrets Team

We devote thousands of hours of research to help you get Big Travel with Small Money. You support us by signing-up for credit cards through partner links which earn us a commission. Here’s our full Advertising Policy.

Did you know you can redeem the cash back you earn from the Discover It card for discounted travel gift cards?

You can save 10% to 50% on gift cards to certain hotels, all-inclusive resorts, car rental agencies, cruise lines, and tour companies.

Sounds like a good deal, right?

Not necessarily!  You won’t always save money!

Redeeming Discover Cash Back For Travel Gift Cards Is It A Good Deal
You Might Get a Good Deal Using Discover Cash Back for Discounted Travel Gift Cards – but NOT Always!

I’ll explain what to look out for and why it’s often not a good deal!

How Does It Work?

Link:   Discover It
Link:   Sign-In to Your Discover Account

Instead of redeeming for cash, Discover It cardholders can use the cash back they’ve earned toward discounted retail gift cards, including hotels, car rentals, cruises, and tours.

And you’ll always get more than the cash value of the certificate.  For example, a $50 Hyatt gift card costs $45.

Redeeming Discover Cash Back For Travel Gift Cards Is It A Good Deal
Save on Hotel, Car Rental, Cruise, and Resort Gift Cards When You Redeem Discover It Cash Back

While that sounds like a good deal, in certain cases it’s NOT.  That’s because Discover makes you redeem certain gift cards through their own travel agency, which may charge more expensive prices!

And in some situations, you could save more money by booking your hotel, cruise, car, or tour through a 3rd-party website like Orbitz, Expedia, or Hotwire.

Let’s look at a few examples.

1.   Hyatt Gift Cards

You can redeem your Discover It cash back for Hyatt gift cards in $50 and $100 denominations.

You’ll pay:

  • $45 for a $50 Hyatt gift card (save 10%)
  • $90 for a $100 Hyatt gift card (save 10%)

That’s an OK deal!  Keep in mind:

  • You can only use gift cards at Hyatt hotels and resorts in the US, Canada, and Caribbean (this is true of Hyatt gift cards purchased directly from Hyatt, too)
  • You can redeem them for many Hyatt goods and services, like a night’s stay, dining, golfing, or spa services
  • You do NOT have to be a registered guest at the hotel in order to use the gift card
  • No expiration dates
Redeeming Discover Cash Back For Travel Gift Cards Is It A Good Deal
Use a Hyatt Gift Card to Stay at Hotels in the US, Canada, and the Caribbean, Like the Hyatt Regency Baltimore, on the Inner Harbor

Saving 10% is a good deal for folks who would normally book directly through Hyatt to earn points, participate in promotions, and have their elite status recognized.

But if that’s not important to you, you might get a better price booking through 3rd-party sites like Orbitz or Priceline.  You can NOT use Hyatt gift cards to pay for stays booked through these sites!

That said, if you DO find a better price, you might consider submitting a Best Rate Guarantee claim with Hyatt.  If they honor it, you’ll save 20% on your stay (and can use the gift card to pay!)

You could also use the gift cards for dining and activities once at the hotel.

Keep in mind, you may find a better deal on Hyatt gift cards at Gift Card Granny.  If you used your Discover card to pay, you’d earn another 1% back (doubled at the end of the 1st 12 months for new cardholders).

2.   Sandals Resorts

On the surface, gift cards to Sandals all-inclusive resorts seem like a fabulous deal!

If you redeem your Discover It cash back for Sandals gift cards, you’ll get a 50% discount!  You’ll pay:

  • $20 for a $40 gift card
  • $40 for an $80 gift card
  • $80 for a $160 gift card
  • $160 for a $320 gift card
Redeeming Discover Cash Back For Travel Gift Cards Is It A Good Deal
A 50% Discount on a Sandals Vacation? If It Sounds Too Good to Be True, It Probably Is!

It quickly becomes less of a steal when you look at the restrictions:

  • $40 certificate is valid toward a 3-night stay or longer
  • $80 certificate is valid toward a 5-night stay or longer
  • $160 certificate is valid toward a 7-night stay or longer
  • $320 certificate is valid toward a 9-night stay or longer

But the real deal breaker here is that you must book your vacation through Discover’s travel agency, Cruise and Vacation Desk

And their prices aren’t always competitive!

I did a test search for a week at the Sandals Plantation Resort in Ocho Rios, Jamaica, in November 2015.

Booked with Discover’s travel agency, a week for 2 costs $3,996.  So you could use a $160 certificate you bought for $80 and save $80.  You net cost is $3,916 ($3,996 – $80 saved from certificate).

If you reserve directly through Sandals, the same suite for 2 costs $3,940.  But it also comes with a $335 airfare credit.

Redeeming Discover Cash Back For Travel Gift Cards Is It A Good Deal
Bookings Made Through Sandals Directly Include Extra Goodies Like Airfare Credits

So booking through Discover and using the discounted gift card still costs you more than booking through the resort directly.

I didn’t check every scenario, so there could be cases where you will save money booking through Discover and using a certificate.  In this case it’s very important to consider all your options!

Remember, all-inclusive resorts like Sandals often go on sale close to the date of travel.  So if you’re not picky, you’ll likely save even more by waiting and booking through a last-minute or sell-off travel agency.

3.   Car Rental

You can redeem Discover It cash back for car rental gift cards from Alamo, Enterprise, and National.

For each agency, you’ll pay $20 for a $40 gift card.  So you’ll save 50%.

But – you must book directly with the rental company!

Redeeming Discover Cash Back For Travel Gift Cards Is It A Good Deal
You Could Save MORE Money by Booking Your Car Rentals Through 3rd-Party Sites

And you can only use ONE certificate per reservation.

I’ve written about how to save money on car rentals.  Often, the best deals can be found through 3rd-party sites like Hotwire or by booking through Chase Ultimate Rewards or Costco travel.

So even though you’ll save a small amount of money using a certificate, you might miss out on bigger savings by booking directly through the rental company.

Remember, you can use AutoSlash to monitor your rental reservations for price drops.  Folks save lots of cash this way!

Bottom Line

Discover It cardholders can redeem their cash back for travel gift cards, including hotels, all-inclusive resorts, car rentals, cruises, and tours.

You’ll save 10% to 50% off the face value of the gift card.  But it’s NOT always a good deal!

In some cases, you’re required to book through Discover’s travel agency, which may not have the best prices.

And in other situations you can only use the gift cards when you book directly through the hotel or car rental company.  You might save more money booking through a 3rd-party site.

Before you redeem your Discover cash back in this way, do the math to be sure you’re actually getting a deal!

Have you redeemed Discover cash back for gift cards?  Please share your experiences in the comments!

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Chase Sapphire Preferred® Card

Chase Sapphire Preferred® Card

  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Chase Sapphire Preferred® named a 'Best Travel Credit Card' by MONEY® Magazine, 2016-2017
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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@A – I don’t know of any off the top of my head, but you could check Cardpool to see what they’ll buy your gift cards for:

http://www.cardpool.com/sell-gift-cards

@PJ – Good point!

@frekwentflier – The terms say “One certificate per National rental.” That’s great if they’ve accepted more than 1 on your previous rentals!

@Ruby E – Thanks for the tip!

We normally redeem Groupon & CVS gift cards.

Groupon in case there are great events in our city, which makes a ticket or activity (or two, or more) free. And CVS, well, for medicine & other medical supplies we may need.

Every little counts, right?

I’ve used more than 1 Discover National certs on 1 reservation many times in the past. Have they changed the terms and now only permit 1 per reservation?

LOOK at the discount you get from Panera subway and Shell Gift cards etc

7000 point to get $75 Shell gift card ; if you are happy to get 5% on Chase Freedom for gas this is about as good

Any gift cards that can be resold for more than redemption cost?