Fall weather brings us Average Joes the much awaited for cooler weather, the return of football and thoughts of the holidays fast approaching. For those Average Joes who are faithful fans of this blog, and follow our WebTalk, Facebook and Instagram pages, they know the Fall Season also means gift card season!
The happiest season of them all!
The gift card business is big business. Billions of dollars of hard earned money are traded for branded pieces of plastic every year; with a special emphasis on the Christmas shopping season. Every retailer, restaurant and theme park in America has gotten into this game and the competition for your dollars is tense.
The reasons are twofold:
- Sellers receive a quick boost to their bottom line; thus propping up their year-end sales.
- Many gift cards go unused, resulting in bonus money to the sellers who now do not have to redeem sold gift cards.
With Competition, Comes Opportunity
To entice you to spend money on gift cards, vendors will often offer incentives, and sometimes crazy good incentives, to buyers in an effort to lure them into purchasing their brand specific gift cards:
- For example, Restaurant A offers a deal where you buy $100.00 of gift cards, you receive, $40.00 in extra bonus gift cards.
- For example, Grocery Store B offers a deal where you buy $100.00 of gift cards, you receive a free turkey.
- For example, Clothing Store C offers a deal where you buy $100.00 of gift cards, you receive a bonus of $20.00 store credit.
And, when the incentives start flowing, the Average Joes who are astute enough to keep an eye out can begin to earn some serious cash rebates and/or freebies playing the arbitrage game.
Definition of Arbitrage – Buying a product for one price and then selling it for another.
I have earned many thousands in actual dollars and store gift card dollars, which has given me the ability to give those I care about a better life. I share this information with you, so you too can be aware of the opportunities to better your lives and those of your loved ones.
Gift Card Vendors
Every retailer, restaurant and entertainment venue in America offers gift cards. Walk into an establishment and somewhere on a peg you will see those coveted gift cards dangling before you calling out to you, “buy me, buy me.” If you buy them without any form of discount, you are paying the Rack Rate. Rack Rate is the non-discounted rate (full retail) being offered and is the most expensive.
We, the Average Joes want to avoid paying full price.
But, there are times when we do. So, do not despair if you have too.
Discounted Gift Cards Sources
Some retail locations will sell discounted gift cards.
For example, a retailer has a $100.00 Disney gift card for sale for $94.00. This is a 6% savings off of the face value of the card.
Sam’s Club, BJ’s, and Costco are a great source of these discounted gift cards, however, the offers may be limited. These discounts average about 1- 5% from the standard retail rate.
I have also noticed discounts vary within regional markets. For example, I was in Minneapolis and a gift card I wanted had a 1% discount at a retailer. But, the same gift card, at the same retailer, had a 6% discount in San Juan Puerto Rico. Go figure. It always pays to shop around.
A plethora of online sources have emerged offering to sell gift cards for a discounted rate. These include:
- Ebay – Make sure you do your due diligence on the seller first.
- Amazon – Mostly, these are retail rates, but some discounted cards can be had.
- Gift Card Granny – This Company separates itself by offering a rewards program.
- Raise – A market place of buyers and sellers offering their gift cards for a discounted price. This company offers an app, which I note below.
Black Friday Opportunities
Watch your Black Friday sales ads!
Black Friday sales ad will often include crazy offers for gift cards where cards can be marked down 10% to 20% from their retail value (or more!). But, these are often very limited in quantity and often used as door busters.
It is very important to check your retailer ads and plan your lucrative pre-dawn shopping spree out. I have missed many a great Black Friday opportunities because I arrived too late and the last of the heavily discounted gift cards had already left the building.
I also had one of my record gift card days several years ago and scored almost $1,000.00 in profit on a Black Friday shop at just one store. I should have pushed for more, but, I had reached my credit limits that night.
Trust me, it pays to plan ahead!
Gift Card Rebate Stacking
By using cell phone apps, it is possible to stack rebates and receive an even greater discount on your gift card purchases which directly increases your gift card purchasing profitability. It pays to monitor your apps and watch as these special rebates are often run for very limited periods of time.
For example, recently, DO$H offered a 1 week rebate special of 5% for purchases made at Sam’s Club. I went to my local Sam’s Club, purchased gift cards at a 6% discount of their retail level, and then received an additional 5% rebate from DO$H using my linked credit card. This equated into an 11% percent discount by combining just these two efforts.
One word of caution, often with these flash sales, gift cards are specifically excluded from the extra discounts. As a work around, I always test my app on a smaller denomination gift card to see if it will be accepted or rejected by the app and the retailer computer algorithms. On occasion, the retailer algorithms are not coded properly resulting in a sudden windfall to you, the Average Joe.
Two years ago, I found a vendor whose computers were not coded properly, and even though their ad specifically prevented me from what I was doing, I purchased cards by the dozens and activated them at the register. The staff happily rang up the transactions; none the wiser. My profit was almost $500.00 a night while that promotion ran.
Credit Card Rebates
Credit card companies are a great source of incentives when buying gift cards. For example, with my Sam’s Club purchase, I received a 6% retailer discount, a 5% DO$H rebate and my Bank of America Cash Rewards credit card offered a 1% rebate. I now had purchased a $100.00 gift card for $88.00 after all the rebates and discounts were applied. A 12% rebate is about as good as it gets!
Some retailers with higher rebates than my Bank of America Cash Rewards include-
- Capital One Quicksilver – 1.5%
- Citi Double Cash Card – 2%
- American Express Blue Cash Preferred – 1% to 6%
It also pays to watch your credit cards as the credit card companies and banks will often offer a brand specific bonus promotion(s) which can result in a higher payout to you.
For example, Bank of America offers “Special Deals,” and by purchasing from a specific brand, I can receive up to a 10% rebate into my Bank of America rewards program. The frustrating thing here is these bonuses are often very limited in scope and often max out rather quickly.
Gift Card Apps
Some companies are forming up just for the intent of selling discounted gift cards. These are a simple way to buy gift cards electronically, allowing you to save from 1% to 17.5% and have them delivered to your cell phone for loading and using. The advantage to this method, is it saves you the hassle of getting into a car and driving around chasing the merchants.
And, the thrill of the hunt is half the excitement.
Raise – This is one company that I have started using and have found a multitude of gift cards that I can use right away. Some of my favorites include Uber, AMC and Under Armor. If you use my referral code, EWYNN9654 you will get a $5.00 bonus (And full disclosure, I will receive a $5.00 referral fee). Raise also has a rewards program for many of its gift cards allowing you to receive back a small commission for your purchase.
Gift Card Selling
If you become adept at buying gift cards, you may want to get into the business of selling gift cards.
I know a few who do this and find it is a profitable endeavor. The main point of this effort is to incur credit card transactions that result in rewards points be deposited into their respective airline or hotel rewards account. This practice is often referred to as manufactured spending. Although, it can be done for profit.
While I am not a heavy practitioner of manufactured spending, if you are interested in the practice, I would recommend checking out –
Point Chaser – By Ariana Arghandewal. Ariana really dives deep into the world of manufactured spending and her blog is a plethora of good information; the pro’s, the con’s, the frustrations. When I look for manufactured spending incite, I turn to Ariana.
I myself have not sold gift cards into the retail market. I generally seek to just use them. And, often when I buy so many, I am saving and using them months later. So, make sure you secure them and treat them like cash.
If you want to sell gift cards, here are a few online companies buying gift cards (just a note, I have not used them so I don’t have any direct feedback on the process)-
- Cardpool – Cardpool lists the gift card within its inventory and then individuals buy the gift card. It appears that a 12% loss on the transaction is standard.
- Buy Back World – Using my $100.00 Disney gift card, Buy Back World offered me $70.00 for my gift card. A pretty steep loss of 30%. With this conversion rate, making a profit is impossible. Unless you are the one buying the gift card.
It is very important that you study the gift card market before delving in with the intentions of being a seller. I am aware of enough difficulties within the buyers’ market, that I have not developed an interest in taking it on myself. Although, it seems a lot people are doing it.
Gift Card Cash Convertibles
Not all debit cards are worth the same.
For example a Subway gift card is only good for one thing – Subway.
A Target gift card can be used for anything, including other gift cards, like Visa or Master Cards debit cards.
For this reason, I am always on the prowl for opportunities to buy more valuable gift cards over less valuable gift cards.
More valuable cards are those gift cards that give you the flexibility to buy more than just the store branded merchandise. Retail stores and grocery store gift cards can often be used to buy Visa and MasterCard debit cards which are cash equivalents; meaning you can use these to pay bills like your mortgage and utilities.
One year, a Target placed their branded gift card on sale for 20% off. I knew I could use these gift cards for other gift cards. So, I would visit several stores a night; buy their store branded gift card for $300.00, then go to the next store and convert those store gift cards to Visa Debit Cards, pocketing almost 20% or $60.00 profit on each transaction. I then converted these into MasterCard debit cards and cashed them in.
Here is an Average Joe favorite – Hy-Vee is a Midwest grocery store chain, and whenever I am in the Midwest, I frequent the chain every chance I get. They love to sell their store branded gift cards at a discount during promotional runs or they offer bonus cards if you buy a gift card. I have bought as many of these as I could physically buy when the opportunity presents itself.
I have earned many thousands of dollars from this one grocery store chain using my brand of arbitrage, but, I also frequent them buying their groceries, gas, liquor, dry cleaning, and eating at their restaurants. And, I give them many thousands of dollars’ worth of free social media exposure in return.
Everyone has their favorite grocery store, including me. But, when I am on the gift card prowl, you have to learn to explore other stores and seek other opportunities. They are out there! Go where the promotions are!
If you have a favorite store, let me know!
The Rewards Are Worth It
Once, you start scoring heavily discounted gift cards and are able to significantly increasing your bottom line, you are on your way to vastly improving your lifestyle and those of your family and loved ones.
Average Joe Rule #1 – Don’t Pay Retail!
I have been able to help my family immensely by learning and developing this hack and I am sharing this information with you so you too can do the same!
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