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

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    Update:   One or more card offers in this post are no longer available.  Check our Hot Deals for the latest offers.  This page includes information about the Discover it® Cash Back that is not currently available on Million Mile Secrets and may be out of date. 

    Did you know you can redeem the cash back you earn from the Discover it® Cash Back 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!

    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 Cash Back
    Link:   Sign-In to Your Discover Account

    Instead of redeeming for cash, Discover it Cash Back 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.

    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:

    That’s an OK deal!  Keep in mind:

    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:

    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:

    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.

    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!

    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 Cash Back 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!

    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! :)