Three Months of Gift Card Arbitrage: Some Stats and What’s Next

After glancing all the way to the top of my ever growing excel sheet for my gift card business, I realized it’s been a full 3 months since I started.  After Chasing the Points was kind enough to answer some of my questions about the field of gift cards around that time, I decided to pull the trigger and give gift card churning a shot.  The very first gift card I bought with the intention of immediately selling took place on 2/5/15 and was a spectacular waste of time.  The company sent me the wrong card and ended up refunding my money after I returned it to them a week later.  Luckily in the time it took for that whole process to unfold, I didn’t shy away from buying a few more and was successfully able to flip those cards for a small profit and some credit cards points.  At that point I was hooked and couldn’t stop looking for more opportunities to buy gift cards for less than the going rates listed at Gift Card Granny.  My volume ramped up over the following months and 3 months later and I’ve cycled through over $20k worth of gift cards and made a small profit along the way.  Below, I’ll explain more about the companies I sell the gift cards to, share some statistics, and tell you about some of my future plans for the business.

 Who I Sell The Cards To

When I first started, I just picked whoever had the best rate for the cards and sold them kind of sporadically to Monster, ABC, Cardpool, and Giftcards.com.  Once I realized that I would be able to move a decent amount of volume, I started looking into becoming a bulk seller.  Giftcards.com seemed to have the highest public rates in general, so I worked with them first.  After filling out their bulk seller application online and answering a few questions they had such as where I get the cards from, I was granted bulk seller status a few weeks later.  This bulk seller status also translated directly to SaveYa, so I was able to utilize whoever had the better rates.  While bulk seller status didn’t increase the price they would pay per card, my sales limit went way up, and they cover shipping in the instances where I need to mail in physical cards.

Once I became a bulk seller with Giftcards.com and SaveYa, 99% of my sales went through them.  Monster would occasionally have better rates, but after taking into account shipping costs (they don’t take digital codes), it wasn’t worth it to spread my sales around any more.  About a month later, I also started looking into selling cards through Raise.com [referral link] which changed my game completely.  Unlike the other websites that pay you up front for the cards, Raise is a marketplace in which I can set the price and sell directly to consumers.  Raise takes a commission from each sale, but I can still come out ahead with many brands.  Becoming a bulk seller with Raise was a quick and painless process.  I filled out their bulk seller questionnaire online, was contacted a day later by phone, answered a few questions, and was able to start selling that same day with my new lower commissions rates (non bulk sellers have a 15% commission across the board).

After I became a bulk seller with Raise, I’ve had an almost exact 50:50 split (50.3% going to SaveYa) with selling gift cards between SaveYa and Raise.  Raise seems to win for the most popular brands (Best Buy, Walmart, Target, etc.), SaveYa usually wins out for physical cards (gas and restaurants), and everything else can go either way.  I’ve found a pretty good balance with the two gift card buyers so far, but I’m always looking for ways to increase my bottom line, so it’s entirely possible I’ll explore other options soon to see if I can get better rates elsewhere.

Some Select Statistics

As I mentioned in the intro, I recently crossed $20k in gift card sales and it doesn’t look like I’ll be slowing down any time soon.  The “cash” profit has come in at just under 5% (~$1000) so far, but I’ve also earned a lot of points and miles via credit card signup bonuses and regular spending.  I put “cash” in quotes because I’m including ebay Bucks in that total.  Some more randomly selected statistics:

  • Number of gift cards sold: 387
  • Average Value Per Gift Card: $66.91
  • Average Sell %: 83.39%
  • Unique Brands of Gift Cards Sold: 86
  • Most Popular Brand: Old Navy (See This Post and This Post for why)

Let me know if you’re curious about any other statistics and I’d be happy to share if it doesn’t give away any of the “secret sauce”.  Where I obtain most of the gift cards will remain obscure for now because it’s not exactly scalable.  The best thing about this business is that I operate it 99% from home and it’s easy to pick up and drop depending on my schedule.

Moving Forward

I’ve done a lot in the past 3 months, but there is still plenty more ideas I have to improve the profitability and efficiency of the business.  One thing I should probably do soon is talk to a CPA about my tax implications and establish how good of records I need to keep in the event of an audit.  I have everything recorded in an excel sheet and 99% of the transactions take place digitally, so I can retrieve the receipts, but it’d be nice to make sure I’m not missing anything.  I did get approved for my first business credit card as Gift Card Ark LLC, and I’ll share the details in a  future post.  I still haven’t set up a business checking account or business PayPal account, but both of those are on my to-do list.  All in all, I’m happy with where the business is heading and hopefully I can keep it running profitably into the future.


17 thoughts on “Three Months of Gift Card Arbitrage: Some Stats and What’s Next

      1. hey this is kk i have 2500 gift card i want sell or i can give sell bulk gift card will you please tell me how is work

  1. Curious: Aside from the $1k and the cc points, did you also earn lots of portal cashback/miles along the way? And what would you guess if the number of hours you spent on the buying/selling?

    1. The $1k includes portal cashback and I haven’t gotten too many portal points/miles because cashback was usually the better deal for where I was buying from.

      As far as hours go, I spent a lot in the beginning, but I’ve gotten it pretty well down to a science. I probably spend 30-60 minutes daily opening envelopes, updating my records, selling the cards (direct to SaveYa or listing on Raise), and buying up the latest deals (if there are any) online. Since I was fumbling around in the beginning, a better estimate would be looking at the last month. Let’s say I spent an hour a day and moved ~$10k in sales for a profit of $500 and 15k points (pretty close to the actual numbers). If you simply value the points at 1 cent each, my hourly return works out to just over $21 per hour. That number does not count signup bonuses that I’m earning and I expect it will go up over time as I keep find new avenues and improve my efficiency.

      The occasional trip to physical stores like Safeway do throw that number off, but I have one about a half mile away that’s a nice walk while I listen to podcasts, so I wouldn’t consider it purely a business trip.

  2. any recommendations on where to get more gift cards? currently i do grocery, staples, and ebay. but looking for more.

    1. The only major one I can think of other than those you just mentioned would be Amex Offers. The samsclub.com $20 off $20 is great for gift cards right now if you can find one that’s still in stock.

  3. would you mind sharing your excel sheet? always looking to make sure im keeping track of the right stuff as well.

  4. assuming you report the income, then you will have to pay taxes on it. Could be about 25% to 35% for both state and federal depending on your total income level. Still worth it after taxes?

    1. I’ll definitely be reporting the profit on my taxes, but keep in mind that I’ll be able to take certain business deductions like home office, my laptop, etc. that will offset the profits a bit. I still need to talk to a CPA about exactly what I’m allowed to deduct.

      While the business keeps growing, it’s tough to say whether or not it’s “worth it” to me yet. It’s definitely a fair question though and one that I’ll keep in mind for the future if/when I hit a steady state. I know people have done crazier things in pursuit of points and being able to do all of this from home is a big plus though.

        1. Hey Texas,

          I’m still in the gift card reselling business, but I’ve scaled back from doing thousands per month to only grabbing the easiest and most profitable deals. I found my time has been better spent elsewhere recently, but it’s possible I’ll pick back up more volume in the future.

          Thanks for reading!

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