For quite some time, Discover has provided the option to redeem your Cashback Bonus for third party gift cards. Those gift cards have always come with a bonus of at least $5, although the denominations and percentage bonus have varied. For example, you could get a $25 Nike gift card for $20 which was a 25% bonus, but the only denomination for a Home Depot gift card was $75 which cost $70 and so was only a 7.14% bonus.
At some point in the past week Discover changed the Cashback Bonus gift card redemption options. Those changes are beneficial for the most part, although it looks like in a few small circumstances there’s been a minor devaluation.
The biggest change is that you can now redeem your cashback for many more denominations of gift cards than you used to be able to, although the specific values depend on the brand. For example, in the past the lowest denomination for Bath & Body Works gift cards was $25 which cost $20. You can now order Bath & Body Works gift cards in denominations as low as $5 which cost $4.
The upper limit has been increased too because in many cases you can now redeem your cashback for gift cards in denominations up to $200. That’s a great improvement if you’re sitting on a large cashback balance as it means you don’t have to mess around with multiple $25 denominations of gift cards any longer.
The slight downside to this change is that in some limited cases the redemption rate has worsened. For example, I mentioned earlier that in the past you could redeem $70 of Discover Cashback for a $75 Home Depot gift card. That same $75 gift card now costs $71.25, so $1.25 more than you’d have previously had to redeem.
Another example is when you redeem cashback for a Staples gift card. In the past you could redeem $25 cashback for a $30 Staples gift card which was a 16.67% discount (or 20% bonus). You now have to redeem $25.50 for a $30 gift card which is a 15% discount (or 17.65% bonus).
From what I can tell, it only seems to be the brands that didn’t previously come in $25 denominations/multiples that have been devalued. Other brands where you used to be able to redeem $20 cashback for $25 gift cards or $40 cashback for $50 gift cards appear to have maintained that 25% bonus ratio. That includes Nike, Bath & Body Works, Bed Bath & Beyond, Gap, Old Navy and more.
Despite the devaluation for some brands, I think this is a positive change for the most part as it makes redeeming your Discover Cashback Bonus for gift cards much easier at both ends of the scale. For those with large cashback balances, you can order larger denominations of gift cards. For those with a residual amount of cashback, you can now redeem as little as $4 for a $5 gift card.