I’ve been reselling gift cards for over a year now and was able to profit over $3,000 in cash last year while generating a ton of credit card rewards to fuel our travel habit. My system since the beginning hasn’t changed too drastically and one website continues to be the best source of deals any given month, ebay. Thanks to the ability to stack several different savings options when buying gift cards and their frequent gift card sales, opportunities to make a small profit while generating credit card spend come around regularly. The best part is the entire process can be done from home and sometimes only takes a matter of minutes from purchase to sale. I’ll break down the whole process below on how to maximize your savings, find the best cards to resell, and if you stick around till the end I reveal a new tool I built to help with the whole process.
High Level Overview of the Process
- Find discounted gift cards on ebay
- Check the resale value of those gift cards
- Add up all the rebates you can stack while buying them
- See if your final purchase price is below the resell value
- If Yes, buy the gift card(s)
- Sell the gift cards to a gift card exchange once they arrive
1. Find Discounted Gift Cards on Ebay
Ebay actually makes this part fairly easy on us by having a Deals page dedicated to discounted gift cards:
I made the process even easier by creating a tool that can look for profitable gift card flips automatically and sort them:
While these pages don’t always list all of the deals available, it’s probably the best place to start. In addition to ebay’s own curated list, you can also check all of the major gift card dealer’s store fronts to get a complete picture of the new gift cards that are available:
2. Check The Resale Value
There are over a dozen gift card exchanges on the internet that will pay cash for gift cards. Luckily there are a couple existing tools that aggregate these exchanges to help determine the best one to sell to. Both Gift Card Granny and Gift Card Wiki allow you to search by brand and see what the prevailing purchase prices are for a wide range of gift cards:
The main limitation on both of these sites is that you have a search for the gift card brand before seeing the prices and the buy prices will occasionally go out of date. Always double check the payout before actually going through with the sale on the exchange’s website.
Another limitation is that the exchanges are listed only by payout and don’t take into account the quality of the exchange when it comes to timely payouts and minimal hassle. These are the gift card exchanges I’ve had a lot of success with and recommend:
3. Stack Rebates
There are 3 primary ways to get rebates on ebay purchases:
- Payment Method
(ebay gift cards)
- Shopping Portal
- Ebay Bucks
UPDATE 9/14/16: Ebay Gift Cards Are Now Restricted When Purchasing Other Gift Cards, More Details Can Be Found Here
The first one, payment method, can often make or break a gift card deal. A standard baseline would be a 2% cash back card if you are going for cash profit, or whatever you value the rewards of your favorite credit card at for regular spend (such as 1 UR point).
Ebay gift card opportunities can be very profitable if used as a part of meeting the minimum spend requirement on a credit card signup bonus, but only if you wouldn’t have been able to meet the spend normally. Otherwise you are essentially just getting the standard earning rate on whatever spend the arbitrage generates.
Once upon a time, ebay gift card usage was limited, but that restriction was recently removed which means it almost always makes sense to purchase with ebay gift cards. How to get ebay gift cards at a discount: Ebay will occasionally offer discounted gift cards directly at 3-8% off which can stack with whatever credit card you use to buy them. Gift card exchanges will sometimes offer ebay gift cards at several % off: GCW Ebay You can use the 5x/5% back bonus categories on your credit card(s) to buy ebay gift cards Office supply stores (Staples, Office Depot, etc.) sell ebay gift cards, so if you have a business card where they are a bonus category, this is a good way to maximize it. Grocery stores (Kroger, Safeway, etc.) sell ebay gift cards so any credit card with a grocery bonus probably makes sense here. If you can make use of grocery store fuel rewards as well, that can effectively add a 10%+ discount on top of the credit card rewards if maximized. If you have a Chase Ink+, buying digital gift cards directly from ebay or from Gyft have both been known to pay out the full 5x in Ultimate Rewards points which can be quite valuable.
In addition to ebay, other locations that sell ebay gift cards will offer discounts occasionally. Safeway, Gyft, and even RetailMeNot have all offered discount ebay gift cards in the past which were possible to stack with credit card rewards.
UPDATE 9/14/16: Most Shopping Portals No Longer Pay Out For Gift Card Purchases! Be Sure To Read The Fine Print (More Info Here)
The second part, Shopping Portals, is much simpler. My go-to source for checking the best ebay shopping portal payouts at any given time is Cashback Monitor:
1% back is always available from a bunch of different portals, and 2% isn’t too uncommon to see. In addition to cash back, several airline mile portals often offer 0.5-1 miles per dollar spent and even Chase offers ebay as a 1x option if you want to earn travel rewards instead of cashback.
Be sure to check the restrictions of whatever portal you choose (some cap the amount you can earn). While many specify you can’t receive portal rewards on ebay gift cards, none that I know of restrict buying other brands of gift cards when getting the rewards. Here are a few that I frequently use, have received payouts from, and recommend:
Those are all referral links, so if you haven’t signed up for them yet we should both get a bonus when you do!
The third rebate you can stack on each purchase (and possibly the easiest) is ebay bucks. If you join the Ebay Bucks program on your ebay account, ebay will give you 2% back on everything to be used on future ebay purchases. In addition to this free 2%, they will often increase the ebay bucks payout to 8% or even more! These occasions present very good opportunities to resell gift cards from ebay and are often the times I buy the most.
Ebay Bucks come with two important restrictions:
- Only $500 can be earned per calendar quarter
- Only $100 can be earned per purchase
Be sure to opt-in to promotional ebay emails to see when these increased ebay bucks events happen.
4. Calculate Your Buy Price and Compare to the Sell Price
Alright, this is the most important step in the entire process. You found some discount gift cards, checked their resell value, bought some discount ebay gift cards, and are ready to buy. Before you pull the trigger on the purchase, be sure to check whether or not you’ll make a profit on the deal!
The key is to compare your final buy price (price minus rebates) to the price you expect to sell the gift card(s) for to a gift card exchange.
Final buy price is equal to the listed purchase price minus the 3 different rebates, plus the shipping cost minus the payment method rebate (ebay bucks and shopping portals don’t pay out on the shipping cost if there is one).
Final Buy Price = Gift Card Price * (1 – PAYMENT_PCT – PORTAL_PCT – EBAY_BUCKS_PCT) + Shipping Price * (1 – PAYMENT_PCT)
Then we compare that final buy price to the amount we expect to sell the gift card for (Gift Card Value * Exchange Buy Percentage)
Let’s say we found a $100 Toys R Us gift card being sold at $85 on ebay with free shipping. The gift card is a physical card that will be shipped and we found that SaveYa is willing to buy physical Toys R Us gift cards for 80% of their face value. In other words, they would pay $80 for a $100 Toys R Us gift card.
Let’s also say ebay happens to be running a 8% ebay bucks deal, the best portal payout is 2%, and you obtained ebay gift cards at Staples with an Ink card at 5x UR back (we’ll just use 1 UR = 1 cent for this calculation).
First, let’s calculate the final buy price:
Final Buy Price = $85 * (1 – .05 – .02 – .08) + 0 * (1 – .05)
Final Buy Price = $85 * (0.85) + 0
Final Buy Price = $72.25
The final buy price of $72.25 is far less than the $80 we can sell the card for! This is probably a good opportunity to jump on.
You will initially lose $5 on the purchase, but will end up with $7.75 in profit after adding up the following rebates:
- $6.80 in Ebay Bucks for a future purchase (gift card or otherwise)
- $1.70 cash back from the 2% shopping portal
- 425 Chase UR Points (worth $4.25+)
If you’ve made it this far and read all the material above, you’ve pretty much got the basics for how taking advantage of gift card arbitrage opportunities on ebay works. After finding a profitable deal and making the purchase, you simply wait for the gift cards to arrive and either type the numbers into a gift card exchange (if they accept digital cards), or mail them in and wait for your payment in the form of a check or ACH transfer.
I go through phases of gift card reselling depending on the amount of free time I have available, but almost always try to take advantage of the increased ebay bucks opportunities and often max out the full $500 each quarter. At an increased 8% back (which tends to happen at least monthly), that’s $6,250 in credit card spend per quarter or $25,000 per year in which I make a cash profit while generating travel rewards.
If you have any questions, I’d be happy to answer them below.
Thanks For Reading
If you’re still reading at this point, I have a little treat for you. Automation is key when trying to find the best gift card arbitrage opportunities efficiently, and I’ve written numerous scripts to help me find deals and run the calculations above to speed up the process for myself. Recently I’ve been experimenting with porting these scripts into useful web-app-like pages that can be used by a large number of people.
I recently released the first beta version of one of these pages via Twitter and I encourage you to check it out. The goal of the page is to essentially complete the first 4 steps listed out above for you and point you to the best gift cards to purchase at any given time. The page updates automatically every 15 minutes (this may change) with the latest ebay gift card deals and buy prices of the big gift card exchanges, calculating the potential profit for you.
My goal for this page is to be the first stop for everyone whenever there is an increased ebay bucks deal and people want to know what the best cards to buy to take advantage of it are:
I have several ideas to expand the usefulness of the page, but I’d love to hear your feedback on what would make the page work best for you. Please let me know below and thanks for trying it out!