My Latest Get Rich Slow Scheme: Gift Card Arbitrage

Ever since I started paying close attention to my finances, looking for ways to further optimize them is usually near the front of my mind.  As I mentioned my previous post, Financial Independence: An Introduction, the primary ways to do this are to cut out wasteful expenses, reduce the costs of the ones left, and look into generating more income.  My latest adventure involves the last one, generating more income, and is tied directly to several of the other strategies I’ve discussed in the past including churning, shopping portals, and gift cards.  I’ll walk you through how I got the idea in the first place, how the operation works at a high level, some of the numbers behind it, and my latest adventure to get more gift cards to sell.

How I Stumbled On The Idea

I’m certainly not the first person to try to make money buying and selling gift cards.  In fact, the only reason I’m able to make it work myself is because several other businesses exist solely in the market to buy and sell gift cards.  But before I get into that, let’s talk about how I found the idea in the first place.

Once I started churning credit cards in order to reduce my expenses and maximize the money I was getting back from my everyday purchases, I started following a lot of blogs and forums related to the subject.  A topic that comes up fairly often is manufacturing spend, or charging items to credit cards in which you can recover most or all of the cost of back into your bank account.  The primary benefit being that you can generate miles/points/cashback on the credit card with little to no out of pocket cost.  It also enables you to hit more minimum spends required for the signup bonuses, allowing you to sign up for more cards and get more bonuses without being limited by your normal everyday expenses.

Anyway, reading about manufacturing spend led me a blog that is primary dedicated to “gift card churning”, or buying and selling gift cards for a marginal cash loss/gain with the intention of generating credit card spend.  Unlike many spend manufacturing techniques that take advantage of loopholes and/or use products/services in ways they weren’t intended for, the buying and selling of gift cards is more about finding arbitrage opportunities in the marketplace.  Is either one ethically or morally above or below the other?  You can decide that for yourself, but buying and selling seems to be the cornerstone of most businesses in the world, so I haven’t lost any sleep over it.  Anyway, the blog is Chasing the Points and the person who runs the website has been a great resource to me through his various posts on the subject and has even been kind enough to answer some questions I sent him through email.

Once the idea that it was possible to buy and sell gift cards for profit was in my head, I started to do a little research to see if I could find some of these opportunities myself.  I’ll explain in more detail below, but since I know the price I can sell them for, the actual work is finding opportunities to buy cards for that price or lower.  To my surprise, I was able to find a few of these opportunities pretty quickly and after double checking my math, I made the purchases.  I started small to test the waters and verified I would actually get paid in order to make sure I wasn’t missing anything.  Fortunately, the first sale went smoothly and when the first check arrived, I immediately started coming up with ideas to potentially turn this into a small side-business by scaling it out and making the whole process more efficient.

How The Operation Actually Works

I’ve always had a knack for math and I rather enjoy working with numbers, especially if those numbers translate to making money.  Someone without those two characteristics probably wouldn’t be a good fit for this particular business because it all comes down to a bunch of percentages that add and subtract to determine whether or not it makes sense to buy a gift card.  The basic principle in the business of buying and selling is to buy for $X and sell for more than $X, and gift cards being the item you buy and sell doesn’t add too much complexity to that, but here are the basics:

  • Find and buy gift cards that are discounted more than the rate you can sell them at.  Finding the rate you can sell them at can be as simple as checking Gift Card Granny’s sell page for the current rates that various gift card resellers are buying different cards at.  The tough part is finding cards that you can buy below that rate, but credit card deals, gift card marketplaces, and limited time offers are a few examples of where they might come from.  Factoring in shopping portals, credit card points, and other means of revenue is very important to see what the “real” cost of each card it.
  • Sell the cards to a gift card reseller such as SaveYa or Cardpool.  Sometimes you can sell just the gift card code online and other times you have to mail them in, but overall it’s a fairly painless process.
  • Cash the check and count your earnings.  A large number of the cards I buy and sell may look like losses at first (for example, I recently bought a Best Buy gift card for $185 and sold it for $177), but if you factor in the rebates I got for that purchase such as $18.50 in eBay Bucks, $2.78 from a shopping portal, and 185 credit card points, that $8 loss suddenly turns into a $15+ profit!

Since the sell prices are known going in and change rather infrequently, the risk I am taking on is relatively low.  At the same time the profit margins are nothing to get too excited about and I certainly wouldn’t be able to replace my full time job with this anytime soon, so the open question is: Is is all worth it?

Examining The Actual Benefits

For the time being, deciding whether or not this business is worth pursuing long-term is still an open question.  I started around 2 months ago and am still finding new opportunities and ways to make the business run more efficiently, so it’s too early to say.  Fortunately, the start-up cost of this business is next to nothing and I could stop buying tomorrow, sell the rest of my inventory over the next couple of weeks, and walk away completely still having made a little money in the process.  Will I still be doing this 6 months or a year from now?  Maybe, but it could be at a much smaller or even a much larger scale than it is now, it’s just too early to say what this may or may not turn into.  Making the operation more efficient is my main goal at this point, but at some point in the future I will take a close look at the time and effort required vs. the benefits gained and decide what pace I want to settle at.  Regardless of that eventual decision, let’s look at some of the benefits themselves.

  • Cash Money – Always an important consideration to any business and this one is no exception.  I’m currently averaging a couple percent profit on each card sold if you count eBay Bucks as cash, so the actual cash profit is slightly lower.
  • Other “Profit” – The number above does NOT count any of the credit card points/miles that are earned when buying the cards OR the additional benefits such as fuel points that are earned.  Taking those into account, the actual profit per card is several percentage points higher.
  • Buying Gift Cards to Actually Use – While the business buys gift cards to turn around and immediately resell them, myself as an individual can buy them to actually use.  Since I am the business, the distinction isn’t too important, but whenever I buy cards to resell for stores I actually shop at, I also have the option to simply use them and get more benefit than simply selling.  For example, I’ve bought a few Target gift cards for about 85% of their value and while I could turn around and sell them for about 90% of their value, it would actually make more sense to just use them and get closer to 100% of their value back (assuming I was going to buy things at Target anyway).  I don’t count the cards I use personally towards my business numbers, but the benefit can’t be ignored because it saves me a decent amount of money on my regular spending.
  • Ability to Churn More Credit Cards – For me, the limiting factor in signing up for new credit cards was primarily the amount of money I spend on a regular basis.  It obviously doesn’t make sense to buy things simply to get the bonus, so I was limited by my regular spending habits as to how many cards I could sign up at a time and still meet the spending requirements.  While the normal profit margins and opportunities may be minimal, the additional rebate that comes from credit card signup bonuses makes the total profit go up drastically.

While the benefits seem great, they come at the cost of time and effort.  I am working to reduce the time and effort required when buying and selling, but it will always be a factor.  Luckily, 95% of the business can be run from my home in my spare time and doesn’t require me to be available at any particular times, so the impact on my life is only as much as I want to be.  As I increase my efficiency finding and buying cards, the benefits can be maintained or even go up while the time required gets smaller.  Once again, we’ll have to wait and see where it ends up.

My Latest Gift Card Sourcing Run

While I purchase a good number of the gift cards online, sometimes deals in person are too good to pass up.  I spent some time recently driving around to a few different stores to take advantage of the deals they were offering on gift cards to acquire the stockpile below:

Gift Card Pile

Stops #1, #3, and #5 – Safeway with a Coupon Loaded on My Loyalty Card

Safeway had a “just for U” offer on Gap branded gift cards that could be added to a Safeway card via their website or mobile app.  This post by Doctor of Credit was the first place I saw the deal: Gift Card Arbitrage at Safeway, 20% Off Gap Gift Cards.  The deal reads “Gap Brand Gift Cards: For every $25 in Gap Inc. gift cards purchased, save $5 instantly.” which equates to a 20% discount on Gap brands including Old Navy and Banana Republic.  A glance at the public sell rates showed most Gap brands can be sold for ~80.5%, but Old Navy can be sold for 81.5%.  Side note: I’m not sure why the gift card exchanges buy these at different rates, because to my knowledge they can all be used interchangeably at any brand owned by Gap.  Nevertheless, the cards could be flipped for a profit (a small 1.5% one), before even taking into account additional rebates.  One of those additional rebates is fuel rewards which are doubled on gift card purchases at Safeway.  And to my surprise, the fuel points received were based on the value of the cards, not what I actually paid, so they were even more beneficial than normal.

My main goal when taking advantage of deals is to not inconvenience anyone else in my pursuit of saving/making money, and that includes holding up people at the Safeway checkout.  For that reason, I only opted to buy a few hundred dollars worth at each Safeway instead of attempting to buy them all.  Because I was making stops at two other stores anyway and Safeways seem to be located everywhere, it wasn’t difficult for me to hit multiple stores.

Since the gift cards allow you to put anywhere from $25-$500 on them when purchasing, my initial plan was to just load $300 on a card or two and get the 20% off that way, but it turns out the coupon is coded to only take off $5 per gift card rather than $5 off for each $25 loaded.  After discovering that, I decided to buy $300 worth at the first location, $400 at the second, and $500 at the third based on how many were available on the gift card rack and how busy the store was at the time.  Since the loaded coupon can be used an “Unlimited” number of times and doesn’t expire for another week, there’s a very good chance I’ll be back to buy more in the coming days.

After selling the $1200 worth of Old Navy gift cards I purchased at 20% off, I will profit $18 cash plus 960 American Airlines miles (worth ~$15 towards flights) plus $1 off per gallon at my next two fill-ups at a Safeway or Chevron gas station (probably ~$25 worth).

Stop #2 – Sears with a BankAmeriDeal

Bank of America offers BankAmeriDeals on many of their credit cards and my Alaska Airlines card is no exception.  Chasing the Points posted about a new Sears deal here (Check Your Bank Of America Card For An BankAmeriDeal) and I decided to check my own account to see if I got the same one.  While his deal was for 10% off, mine was for 15% off, but both had a maximum refund of $20.  That means I could spend up to $133.33 at Sears and receive 15% back and because I started paying attention to the gift cards racks at all the stores I visit, I know my local Sears sells Shell gift cards.  In general, grocery store and gas station gift cards sell for the most money because everyone has a use for them.  Since gift cards are sold in $25 increments most of the time, I decided to purchase $125 worth of Shell gift cards at 15% off and I can resell them for 91.5%.  That’s a 6.5% profit ($8.13) and 125 Alaska Airline miles which can be worth ~2 cents each ($2.50).  While I can resell these, I’ll probably end up just using them because I have a lot of Fred Meyer fuel rewards to use in April and they work at Shell stations.

Stop #4 – Lowe’s with an Amex Offer (or two)

Amex Offers are similar to BankAmeriDeals in that you load them to your credit card ahead of time and they will automatically add in the savings on your next statement.  Amex currently has a deal where you get $10 off a purchase of $50 or more at Lowe’s.  While I only have 1 Bank of America card right now, my fiance and I have 4 Amex cards between us.  Due to the nature of Amex Offers, you can also load the deal to an Authorized  User’s card and get the deal twice per credit line.  Because I knew about this a while ago, I made sure we both had each other as authorized users on all of out Amex cards, which means we can use this deal 8 times!  We had already used 6 of the cards previously to this trip, so I only had two left to use up.  I’m glad we did use them up already, because we certainly weren’t the only people taking advantage of the deal by buying gift cards.  The first time we went, we bought the last few eBay gift cards because those are almost as good as cash to me.  The next time, we bought Shell gift cards because those can be resold (or used) for a nice return.  This time, there were no more Shell cards, no eBay cards, and the entire gift card rack looked like a tornado swept through and took half the cards with it.  Fortunately, I did spot some Staples cards left over which can still be sold for a profit after the 20% discount the Amex deal offers.  Next time, we should probably just use all of our Amex cards on the first trip, so lesson learned.  This particular trip of buying 2 $50 Staples gift cards will yield a profit of $6.50 plus 100 MR points (worth ~$2).

Final Numbers

The Old Navy cards I was able to immediately sell online once I got home, while the Staples cards can be sold for a higher rate if I mail them in.  I typically wait until I have several cards to mail in before actually sending them to save on postage, so it will probably be a week or two before I actually sell them.  At the end of the day, I calculate a cash profit of $32.63, about $19.50 worth of points/miles, and around $25 worth of gas rewards.  Not too bad for about 2 hours of my time.

 


Travel Rewards Credit Cards

52 thoughts on “My Latest Get Rich Slow Scheme: Gift Card Arbitrage

  1. How very odd. I bought $500 Old Navy cards for $400 at several Safways without issue. I didn’t buy nearly as many as you, but made almost as much. Also, there appear to be ways to get more than one AU for an Amex card even with only one significant other. Just sayin’.

    1. Interesting that yours rang up differently and that sure would have made my life easier. The first time I tried ringing up a $300 card and the total came out to $295 after the discount, so I stuck to $25 cards from there on out. If the deal comes around again, I’ll experiment a little more

      As for more AUs, the rabbit hole always seems to go deeper. Thanks for the tip

  2. Hey Noah, this was a good read. Thanks for sharing such a detailed post! Incidentally, I too am interested in financial independence and it’s great to find someone else with similar interests and values too.

    One question with regards to gift card arbitrage. I’ve actually recently tiptoed into the waters as well. Just wondering if you have a spreadsheet template that you can possibly share to track your gift card purchases and sales?

    Thanks!

    1. Thanks for reading!

      The excel sheet I’m currently using to track gift card arbitrage is actually a couple tabs on my general churning excel sheet at the moment and has evolved into an ugly mess as I add new metrics I’m interested in. I may clean it up in the future and will post it here at that time, but for now, here’s the basic columns I use if you want to create your own:

      MANUAL ENTRY COLUMNS
      Buy Date
      GC Store
      Card Value
      Card Cost
      Type (physical or digital)
      Bought From
      Shopping Portal Used

      CC Cash Back
      CC Points
      CC Points Value (what I value the currency at per point)
      CC Rebate (Amex Offers and similar)
      SP Buy Cash Back
      SP Buy Points
      SP Points Value
      Store Rebate (ebay bucks and similar)
      Used GC Bonus (when I use a gift card to buy a gift card, I shift the profits to the final cards in this column)
      Other Rebate (anything not captured in the other columns, like fuel points)

      Sell Date
      Sold To
      Sold For
      Shipping Cost

      CALCULATED COLUMNS
      Cash Profit
      Rebate Profit
      GC/Other Profit
      Points Profit
      Total Profit
      Cost per Point
      Cash Profit Margin
      Total Profit Margin

      Hopefully that helps you if you want to put together your own.

      1. What does SP stand for? Shopping Portal doesn’t make sense so I’m not sure what SP means.

        Also, do you have more updated excel or is this what you’re still using? Thanks!

        1. It does stand for Shopping Portal, I specified “SP Buy” because it’s also possible to get shopping portal cashback in certain cases when selling cards.

          I do still use the same excel for tracking my gift card sales.

      2. Also, not sure if you’re interested, but I’d love to see an example of a gift card used in your excel. I didn’t fully understand what you meant by “Used GC Bonus (when I use a gift card to buy a gift card, I shift the profits to the final cards in this column)”

        1. I can give you an example for that particular column. Let’s say I buy a $50 ebay gift card for $40. That card will have it’s own column in which I “Sell” it to myself for the full $50 which means I profited $10 for that “sale” (I’ll leave out shopping portal and credit card bonuses for this example), but I don’t count these cards in my totals because it didn’t end up with cash.

          Now, let’s say I buy a $60 gift card on ebay for $50 using the gift card from above. Let’s say I sell the card for $45 which then makes it look like I lost $5. In reality, I actually made $5 across the two transactions, but that isn’t immediately obvious at first glance. To make it easier to calculate final profits and my real earnings on each card I use the “Used GC Bonus” column on both transactions by putting -$10 on the ebay card (now that’s a $0 break even row) and $10 on the second card (making the profit on that card $5).

          That’s the way I handle using gift cards to buy gift cards but still see the actual profit on the final card. Hopefully that explanation made sense. There’s probably a better way to do it, but I haven’t invested too much time in improving my bookkeeping yet.

    1. Hey Nick, thanks for reading!

      I wish I had a solid answer for my profits vs. time invested, but don’t at this time. In the future, the business should become a little more consistent and I’ll be able to calculate how much I’m making per hour, but because it’s fairly new and I’m rapidly changing/improving how I run it, I don’t think it’d even be worth trying to calculate right now. I can provide a few thoughts towards it though.

      The major time sink is finding profitable cards to buy. When GiftCardMall has a deal on eBay that’s profitable, I’ll find it quickly, and spend little to no time flipping it. A minute to buy, a minute to take it out of the envelope and verify the balance, and then another minute or two to sell it. If I made a dollar or two on that deal, my hourly profit would look significant. Unfortunately, those deals are limited in the number you can buy and only happen every so often, so I end up spending time trying to find the next deal.

      If I had to guess, I’m probably making roughly minimum wage on the time I’ve put in so far, maybe less. Fortunately, I keep getting more efficient and that number should go up over time.

      Luckily, I can do 95% of it from home in my free time and I really enjoy it so far. I can’t wait to find out what it turns into.

  3. Noah, just curious what’s the lowest you can buy Amazon gift cards and the highest you can sell them? I have access to buying them at 5% discount using any credit card so wanted to see how to maximize the churning. I usually use either the $200 Visa gift card bought from Staples with all Chase Ink card (5x UR) or the $500 VGC from supermarkets using AMEX Blue Cash (6% cashback). Then I sell them for 96-97% face value. Profit margin is small so wondering how to do better.

      1. I don’t have a great avenue for buying Amazon at a discount and they don’t sell for very high because of the restrictions on them. As far as I know, it’s impossible to check the balance of an Amazon gift card without adding it to an account, so the gift card buyers are very hesitant to buy them.

        There are a lot better retailers to go after than Amazon if you want to start churning gift cards.

    1. It takes a few steps, but Sears is where I get my Amazon cards. 10% discount at least. Buy Sears/Kmart/Lands End G/C at any reseller for at least a 10% discount. YMMV, but every Sears I have been into allows the purchase of G/C with a G/C (almost every other store that used to no longer does). Amazon cards, as well as Exxon and Shell are available. Unfortunately the highest denomination is sometimes $50 ($25 at some stores). I can always use the Sears card for retail arbitrage so it isn’t risky for me. If you have nothing to buy at Kmart or Sears, this may be risky.
      Some of my credit cards allow points to buy Sears cards at a greater than 10% discount which can be the most valuable way to spend some points. Upgrading G/C can be beneficial!

      1. That’s awesome that you have a Sears that lets you upgrade. I only have one within a reasonable driving distance and I’ve been denied twice trying to upgrade my Sears gift cards to Shell or Amazon.

  4. Noah, your article got me paying attention and took advantage of the recent Safeway/Vons offer and the Am Ex Smart and Final. S&F was easy because Am Ex limited it to 3 purchased per registered card. However, the Gap Safeway deal didn’t. I was able to buy $50 cards for $40 and resold them to Cardpool but I went to the store every day and bought one card each time because I didn’t want to hold up the line. My question is how did you approach the Safeway cashiers with multiple cards in hand? You would have had to ring each card up separately to get 20% off which would take up a lot of time? Did you go early, late, use customer service desk, go from cashier to cashier? What’s your routine?

    1. John, the $5 off $25 Safeway deal was per card, not per transaction (as stated in the T&C). I was able to check out multiple $25 gift cards at a time and got the $5 discount. I got 73 x $25 gift cards in one day. I did have to visit multiple Safeways because there weren’t that much in stock. I basically bought up all the Old Navy gift cards at each Safeway. I got Old Navy because the payout was slightly higher for Old Navy then it was for Gap.

      1. Susan, mine was the 20% instantly off and I bought the Old Navy too but how did you deal with the cashiers when buying that many cards. Did you literally stand there and have them ring them up one after the other? People at my stores would have tossed fruit at me.

        1. I guess you have a different offer than I did. When I bought the cards, I checked out about 10-15 cards at a time, which was about all each store had. Scanning each card is no different than checking out 10-15 items. The only difference is after scanning, they have to enter the amount you want. I don’t see what the hold up was…. unless the cashier required some override in which they need to get a supervisor to scan their override card.

          Again, I was able to check out 10-15 cards per transaction/receipt. I didn’t have to ring or pay for each card separately.

      2. I had the same experience with my $5 off $25 offer and was able to buy several cards in a single transaction and still get the discount.

        By the way, if you’re selling the card digitally, it doesn’t matter what the card actually says. You can buy and Old Navy card and sell it as Gap, buy a Gap Options card and sell as Banana Republic, or even buy an Athleta card and sell it as Old Navy. Any combination will work because they all use the same gift card system. Even if you are mailing in the physical cards it will probably still be okay, but I’d verify with whoever you’re selling to before shipping them off. This should help you on future deals if your Safeway happens to be out of the specific type that is most profitable.

  5. Susan, sorry for being so slow on the uptake. What the cashier had me do was scan the a single gift card, then had me swipe my CC, and sign for each individual card. Each GC purchase was an stand alone transaction. She said more than one or two would hold up everyone else.

    1. That’s an interesting experience you had John. I’ve had the same experience as Susan where I can bring multiple gift cards to the cashier, they will scan them all in on a single transaction, and I will then pay and sign only once with my credit card.

      Have you tried this more than once? It sounds a little strange to be a store policy, so maybe you just got a cashier that didn’t know better?

      The most I attempted to do was 20 $25 cards in one transaction ($500 worth of cards for $400) and that went through just fine with a single credit card swipe. With the more recent 20% off I had, I simply purchased 2 $300 cards per transaction and then sold them to SaveYa.

  6. Noah,

    Thanks for the feedback. Next time I’m in Von’s I’m going to ask someone about it. I have four stores in my area and could have had fun with Old Navy doing it you and Susan’s way. Thanks for the post by the way. Don’t want to make this a “job” but I’m sure going to take advantage of the low hanging fruit as it comes along.

    1. I missed the 20% off offer! That would have saved me a lot of trouble with the small denomination cards! My offer was $5 off $25, so I visited 5 Safeways stores and bought everything on the shelf — 73 x $25 which painstakingly took a while to remove from the packaging, scratch to get the PIN, and list on a spreadsheet. I sold most to Raise (some to my colleagues) within 3 days for a small profit of $110 —> 6% ROI not including the time spent.

      1. That’s a good return, and considering how many people took advantage of the latest offer, we probably won’t be able to get that high for the immediate future. I’ve used this offer twice so far and once it was the $5 of $25 and the next it was 20% off the whole card (Safeway/Vons must target based on something). WAY less effort involved for the 20% off, but if Raise is your primary way to unload them, buying large denominations (>$200) might not be the best plan.

        I should explore selling to my co-workers more, doing it as a business wouldn’t go well, but selling a single type of card every so often would probably work out alright. The payouts would certainly be higher as most of them don’t know about gift card exchanges.

  7. Hi Noah,

    Just curious, now that more time has passed, how is your gift card business going?
    Have your profits increased, and do you think you will continue to do this long term?
    Thanks!

    1. It’s been an interesting ride so far. At first I was scaling up and buying everything I could make a buck on, but got burnt out a bit and decided the grind wasn’t worth it (at the pace I was going).

      Read more about it here:
      http://moneymetagame.com/giftcards/20k-spending-challenge-complete-profit-breakdown-and-thoughts/

      Since that point, I’ve scaled back heavily due to a combination of it not being worth the time commitment and a lack of free time due to summer activities. When I was going full force, the profits came out in the $80-100/hour range which is a little under what I desire for my extra-curricular money earning activities. I’m currently thinking I’ll ramp back up a bit when the weather gets worse outside and I have some more free time, but for now I just grab the easy ebay deals and pass on the extra effort ones.

      I’ll continue to resell gift cards into the future, but will mostly stick to easy wins for the time being.

  8. You don’t seem to mention Ebay’s Final Value Fees – unless I missed it? Where do those factor in, I know ebay takes 10%.

    1. Hey Leslie,

      I don’t actually sell any cards on ebay, so I don’t have to worry about their seller fees. I acquire a lot of cards on ebay and sell most of them to SaveYa and Raise.

      Thanks for reading!

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  10. Hey Noah thanks for this great article and your most recent one with the calculator. Haven’t started giftcard reselling yet but just researching now. You didn’t tell us WHERE you actually sold your Old Navy cards online.

    1. I typically just sell to the exchange with the highest payout! The ones in the picture above probably went to SaveYa back when you could sell them for above 80% of their value.

      GiftCardWiki and GiftCardGranny are both useful websites if you want to see what the payouts across exchanges are, but be careful to verify the amount on the actual exchanges before hitting sell. Sometimes they fall out of date.

  11. I have about 15,000 of spend I need to get done quickly for several credit card minimums to get the points/miles. I do not have that much regular spend. I read somewhere to buy pin enable cards and then convert to money orders at Walmart and then redeposit the money orders in my bank account. Is this correct?

    Is there a post somewhere that explains this really well?

    TIA

    1. It sounds like you jumped in the deep end without knowing how to swim…

      I recommend always having a plan to meet the minimum spend BEFORE signing up for any new credit cards. Personally, I don’t do any of the Visa/MC gift card manufactured spending, so I won’t be of much help. Reddit and FlyerTalk are probably your best bet to learn more, specifically the MS Saturday threads on reddit:
      https://www.reddit.com/r/churning/search?q=flair%3A%28%22MS+Saturday%22+OR+%22MS+Tuesday%22%29&restrict_sr=on&sort=new&t=all&feature=legacy_search

    2. Like Noah said, $15k is a lot to meet if you didn’t have a plan before you applied for the cards. Manufactured spending is becoming increasingly difficult with various options being removed. There are some people that know how to buy pin-enabled cards and turn the funds into money orders at Walmart and various convenience stores, but very few people will flat out tell you the exact locations where you can do that. Many stores are cracking down on MS folks, so those with the know-hows don’t want a good thing to be ruined.

      Many have turned to reselling (electronics, gift cards) to meet minimum spend as well as earn more points. If you’re good at it, you could even make a little from the reselling, but it does take some time and patience — all of which is not good if you only have a limited time to meet your spending requirement (or pay off the balance).

      Check out Doctor of Credit (doctorofcredit.com) and Oren’s Money Saver (http://www.orensmoneysaver.com/) for ideas on what you can buy that might sell for breakeven.

      If you’re lazy and don’t want to deal with reselling $15k worth of goods, the easiest but most expensive way is to find a credit card processor and pay the 3% convenience fee to convert credit card transactions into money deposited into your bank account.

      1. Hey Susan! 🙂

        I agree that reselling is definitely a solid option at this stage of the game (2016). However, like you stated, it definitely takes time and patience….and larger float times.

        I’m with Noah in that I’m not interested in the VGC/MC game. You have to factor in your time as an opportunity cost here. The raw numbers on fees and liquidation methods are only one part of the equation.

        Like Noah said though, it’s better to have a plan before jumping in. At this point I think your idea of paying the processing fee sounds like a solid choice. Perhaps wait until the last week or two before deciding. I’m sure it’ll still work out to being a profitable option despite losing value. If I were you (John) I’d start brainstorming some spending ideas and do some rough calculations to determine if they’d be worth the time, float and bonus gained. The impact to your credit at this point is a sunk cost and it’s just a matter of determining if the value gained is worth the effort. My guess is you’ll be fine if you’re willing to roll your sleeves up.

  12. I’ve been buying about $1,000 – $2,000 worth of gift cards every week from a couple of the big gift card sellers on Ebay so I could resell them, and I was wondering if you think that’s too large an amount to be purchasing every week. Does Ebay care about that? For example, I can purchase as many RedRobin gift cards as I want right now for reselling, but I don’t want to buy too many since I don’t have a reference point as to how much is too much.

    1. As long as you aren’t trying to circumvent the limits on specific cards, I haven’t heard of any problems with buying in large quantities. PayPal digital gifts frequently won’t let you check out if you try to buy a lot of digital cards, but I haven’t heard of any similar problems with any of the other big sellers.

      The Red Robin deal is interesting because it’s the first profitable flip I’ve ever seen without a per user limit on what you can buy. I’m not sure if this is a mistake or something else, but I’d love to hear how it plays out if anyone goes big with the purchase and flips them. The margins are a little slim, but there certainly looks to be a lot of opportunity if someone is willing to take a risk.

      1. What would you consider a big purchase for RedRobin? I was going to buy some today to flip next week, just to try it out, but thought maybe there’ll be an Ebay Bucks deal tomorrow.

        Historically, has Ebay ever done an Ebay Bucks flash promotion on a Tuesday after a Monday holiday?

        1. The max ebay bucks you can get on a single purchase is $100, which at the standard 2% would mean buying $5,000 in RedRobin gift cards. That is a significant purchase though and probably more than I would risk on something like this. 5 would most likely be safe, 10 seems reasonable, but anything higher is probably getting pretty risky. YMMV with ebay, PayPal, and Cardency though, so who knows on this one…

  13. Great but I suffered a lot by doing this. Some gift card details were misused, and kinds of stuff like that happened. You can also try my little hack about gift cards. I buy all the brands’ gift cards through yaarlo.com, a cool cashback website. It saves bucks that are equivalent to churning. There are gift cards that offer triple cash back also.

  14. Fun Fact. If you bank/Credit Card company see you doing this a lot through your accounts, odds are great they will not only close your accounts but also report the activity to FINCEN or possible money laundering. Not worth it for any consistent source of income. One or two cards here and there for lower dollar amounts, not a problem normally.

    1. I’m pretty sure you’re just trolling, but if not you have been severely misinformed.

      All of these actions are 100% legal, not relevant to something like FINCEN, and not even against any of the credit card terms and conditions. The only shut down stories I’ve heard related to this is people cycling their credit line multiple times a month which is viewed as risky, I’ve never heard of any bank caring that you bought retail gift cards to resell.

  15. Noah,

    Are you still doing this as a money source? Are there any updates you may have for someone considering starting to do this?

    Would love a chance to email and see best practices on how to start!

    1. Hey Mike, I still do a little bit of gift card arbitrage for points and profits, but don’t spend anywhere near the time on it that I used to. If I happen to find a deal that I can quickly flip online then I’ll do it, but I’ve generally stopped seeking out every deal and making trips to stores to maximize them.

      After running the numbers and measuring time/mental energy spent, it was like I managed to create a low paying job for myself that ate into my free time a bit. While I was making some money, I decided that I valued my free time more. This was especially true after ebay cracked down on stacking deals with gift cards purchases.

      I know the folks over at the Travel Miles 101 facebook page have been discussing a full gift card reselling course, so that may be a good place to look if you want a full newbie-friendly intro to the whole process.

      Best of luck!

  16. id like info about the gift card business and the exchange rate like whats the most i can pay out instead of a kiosk and how do i get the money i payed out on the card is there somepalce that you send them?

    1. GiftCardWiki.com is a good place to check the public rates for both buying and selling. If you can find a card selling for under the amount the exchanges are buying for, then you found an arbitrage opportunity in the market.

      Some exchanges pay out via ACH while others will mail a check or use PayPal. It will depend on the type of card and the exchange as to whether or not you need to mail the cards you’re selling.

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