Three students in New York, who found $40,000 (€29,000) in a second-hand couch they had bought, have tracked down the owner and returned the cash.

The three bought the couch from a charity shop for $20 and found the cash hidden inside.

Its owner, an elderly widow, said her daughter had sold it while she was in hospital for surgery, unaware what was inside.

They found the owner's name on a deposit receipt in the couch.

When the room-mates returned the money, the woman rewarded the three with $1,000.

One of the room-mates, Cally Guasti, said: "We just pulled out envelopes and envelopes."

"My mouth was literally hanging open, everybody's was. It was an unfathomable amount," said the social worker who shares an apartment with two friends in New Paltz, 120km north of New York City.

She said the three had considered the option of keeping the money, but decided against it.

"At the end of the day, it wasn't ours," Ms Guasti said. "I think if any of us had used it, it would have felt really wrong."