Zakat on Gift Cards/Vouchers

The cash equivalent principle

For Zakat on gift cards, the key principle is whether the card represents stored monetary value that you can use like cash.

General-purpose gift cards (Visa, Mastercard) are clearly cash equivalents, they function exactly like debit cards with prepaid funds.

Store-specific cards (Amazon, Walmart, department stores) also represent stored value. You can purchase goods with them, and in many jurisdictions, they have cash value or can be sold.

Even restaurant or café cards represent value, you own the right to £50 worth of food. This is wealth in Islamic terms and is zakatable.

Face value method (primary method)

For most Zakat on gift card calculations, use the face value, the amount of stored value remaining on the card.

This is the simplest and most accurate method. If you have a £100 Amazon card with full balance, include £100. If you've spent £30, include £70. Track remaining balances on your Zakat date.

Face value works for:

• General-purpose prepaid cards
• Store-specific gift cards
• Restaurant and café cards
• Digital e-gift codes
• Mobile app store credit

Secondary market value

Some gift cards trade below face value on secondary markets (e.g., CardSwap, GiftCardGranny). If you can easily sell your gift cards, you may value them at their resale price.

The Hanafi school generally requires valuation at market price. If your £100 card sells for £85 online, you could value it at £85 for Zakat. However, many contemporary scholars recommend face value for simplicity and caution, unless you actually intend to sell.

Whichever method you choose, be consistent year to year and don't undervalue intentionally to reduce Zakat.

Tracking partially used cards

For accurate Zakat on gift cards, track partially used cards carefully:

• Keep physical cards with balance receipts
• For digital cards, check online balance before Zakat date
• Record spending from gift cards throughout year
• Take screenshots of remaining balances on Zakat date
• Include only the remaining balance in calculation

Cards that expire before Zakat date

If a gift card expires and becomes worthless before your Zakat date, it is not included in Zakat calculation for that year.

The wealth has been lost or forfeited. You no longer own the value. This follows the principle that Zakat is due only on wealth you actually possess on your calculation date.

Cards that expire on Zakat date

If a gift card expires exactly on your Zakat date, include it in calculation. The general rule is that wealth is assessed at the end of the Zakat day. If the card is still valid at the end of that day, it's included.

Intentional expiration to avoid Zakat

Letting gift cards expire intentionally to avoid Zakat obligation is not permissible. This would be considered evading Zakat (taharrush), which is prohibited in Islam.

If you intentionally hold cards until expiration rather than using them or giving them away, and you do so to reduce Zakat, this is not acceptable. Use cards before expiration or give them as gifts to others, but don't waste wealth to avoid obligation.

Loyalty points are not zakatable until converted

A common confusion in Zakat on gift cards is whether loyalty points, airline miles, and reward program balances are zakatable.

Contemporary scholars unanimously agree that loyalty points themselves are not zakatable. They are mere promises or potential benefits, not owned wealth. You cannot sell them (in most cases), they are not transferable, and they don't represent stored value you control.

However, once you convert loyalty points to gift cards, vouchers, or cash, those converted instruments become zakatable.

When do loyalty points become zakatable?

Loyalty points become zakatable when they are converted to:

• Gift cards (store credit)
• Cash back (direct deposits)
• Vouchers with monetary value
• Transferable rewards that can be sold
• Prepaid cards loaded from points

At the moment of conversion, the resulting gift card or cash becomes owned wealth and starts its one-year Zakat timeline.

Receiving gift cards as gifts

When you receive a gift card, it becomes your wealth from that moment. For Zakat on gift cards, the receipt date starts the hawl (one-year) clock.

If you receive multiple gift cards throughout the year, track each receipt date separately. On your Zakat date, include only cards that have been in your possession for one full lunar year.

Cards received less than one year before your Zakat date will be included in next year's calculation.

Giving gift cards to others

When you give a gift card to someone else, it leaves your zakatable wealth permanently. The recipient becomes the owner and bears future Zakat responsibility.

If you gave the card before your Zakat date, do not include it in your calculation. If you gave it after your Zakat date, it was included in that year's calculation (since you owned it on your Zakat date) and is now the recipient's concern.

Step 1: Inventory all gift cards and vouchers

Gather all gift cards, vouchers, store credit, and prepaid cards you own:

• Physical gift cards in wallet, desk, drawers
• Digital gift cards in email, apps, accounts
• Store credit from returns
• App store credit (Apple, Google Play)
• Prepaid Visa/Mastercard/Amex cards
• Restaurant/café loyalty cards with stored value
• Gift cards received but not yet used

Don't forget cards you've tucked away and forgotten. All are zakatable if they hold value.

Step 2: Determine remaining balance on each card

For each gift card, determine the remaining value on your Zakat date:

• Check online balance for major retailers
• Call the number on the card
• Check app store balance in your account
• Look at recent receipts for remaining store credit
• For physical cards with no balance check, estimate from purchase history
• Take screenshots or photos as documentation

Be thorough, even small balances add up and may push you over nisab combined with other wealth.

Step 3: Record receipt dates for hawl calculation

For Zakat on gift cards, only include cards that have been in your possession for one full lunar year:

• Note when you received or purchased each card
• Cards received within the last year: exclude from current Zakat
• Cards owned for more than one year: include
• If receipt date unknown, be conservative, include if likely over one year

Step 4: Combine with other wealth and calculate Zakat

Add eligible gift card values to your other zakatable wealth:

• Cash and bank balances
• Investments and stocks
• Gold and silver
• Business inventory
• Cryptocurrency
• Loans given to others

Calculate total, compare to nisab (£400 silver standard), and pay 2.5% Zakat on the total if above threshold.