Gift Card Arbitrage

**arbitrage** ‎(*countable and uncountable*, *plural* **arbitrages**)

1. (finance) A market activity in which a security, commodity, currency or other tradable item is bought in one market and sold simultaneously in another, in order **to profit from price differences between the markets**.

Gift Card Arbitrage (GCA) is a method of Manufactured Spending which involves purchasing merchant gift cards from one site, selling them to another site, and by a combination of store incentives, cash-back portals, and credit card rewards drawing a profit - or at worst allowing for an inexpensive form of purchasing points/MS.

**NOTE**: Due to recent changes at eBay, this is not likely to be as profitable a hobby in the future. Proceed at your own peril.

## The Basics

1. DO THE MATH FIRST! Set up a system!
2. Find a gift card with a relatively high resale value compared to its cost
3. Purchase said gift card with a credit card that will earn you high value rewards
4. Use any store incentives and cash-back portals when making purchase to negate costs/increase profit
5. Sell your purchased gift card to another gift card reselling establishment to recoup costs

Enough with the basics, how do you actually make this profitable?

## Step One: The Math and a System

Before you even THINK about going into GCA make sure you have two things straight - you want to develop some system of organization and have a way to quickly do the math on any perspective deal to ensure that your returns will be worth your effort (and more importantly, that they'll be correct!).

The best way to handle both of these problems at once is to keep things organized in a Spreadsheet. We like Google Docs as they're free and accessible anywhere from computer and phone.

### Why do I need to be organized?

Because you have a lot of information to keep straight! Here's what we recommend recording in your spreadsheet to keep you sane:

* Date of purchase
* What type of Gift Card (KMart, Best Buy, Amazon, etc)
* Gift Card Value
* Gift Card Purchase Price
* Gift Card Number and PIN (always save these!)
* Where you purchased Gift Card (eBay vs CVS etc)
* Cash Back Portal Used and Value (TopCashBack vs Simply Best Coupons etc)
* Store Incentives (eBay Bucks) and value
* Payment Method Used (Credit Card, CC + eBay Gift Card, etc)
* Where you are selling the GC
* How much you're getting for selling the GC
* Total Value of rewards + cash back + incentives
* Total Cost or Profit Overall
* Confirmation Number for Sale
* Column denoting whether you've received your payment

**Make sure you do the math before you buy anything!** Don't waste your time or money on a bum deal!

## Step Two: Finding a Deal

So you've got the base of a system in place and now you need to find a good deal to jump on - but how does that happen? Fortunately, there are some great tools to help you find the deals you want. Here's where we recommend starting:

Money MetaGame's eBay Gift Card Arbitrage Tool: This fantastic tool scrapes eBay for gift card deals and allows you to custom enter your eBay bucks percentage, your credit card earning rate, and portal cashback into a calculator to determine which deals would be profitable and which deals to stay away from.

Gift Card Wiki's Hot Deals Tool: From the fantastic GiftCardWiki, a website whose forums are also a treasure trove of useful GCA information, this tool allows you to see a quick difference between prices at different markets.

Blogs and Reddit are also useful places to spot a deal. DoctorOfCredit has a Gift Card Deals section.

## Step Three: Checking the Portals and eBay Bucks

### The Portals

So you know now which GC you want to buy and know where you want to buy it - but you should check the various online cash-back portals to see if you can get a few dollars back for your purchase. Now don't expect to break the bank with portals - at their absolute best we're talking a return of 2% but usually closer to 1% - but that's still 1% and if you do enough volume can absolutely add up.

Rather than try to check every single cash back and miles portals out there, use one of the popular aggregators like CashBackMonitor or CashBackAholic.

**Expert tip**: You absolutely can **NOT** be using any Adblocking or Script-blocking plugins when you're doing these deals. Rather than go through the annoyance of disabling or whitelisting sites, **download a separate, different browser and use it exclusively for any cash back/portal deals**. Firefox or Chrome - if you're not primarily using one for browsing - make excellent options. What we recommend is download Firefox, don't add any add-ons, and add this Javascript Bookmarklet for CashBackMonitor.

Of note, sometimes the various Airline portals will have additional spending incentives such as the now-expired United offering an extra 1000 miles for $350 spent or Alaska Airlines offering a bonus 1500 miles for $750 spent. Keep an eye peeled at either the GCW Forums or your favorite blog for such offers and don't forget to include the value of the bonus points in your calculations.

**Update 9/22/16**: Popular cash back portal TopCashBack is now blocking cash back on Gift Cards going forward. This hopefully will be an isolated incident but other portals may follow suit. Make sure you're reading the terms and exclusions when selecting a portal.

### eBay Bucks

**Update 9/21/2016**: As of 10/1/2016, eBay Bucks will not be awarded for Gift Card purchases. Everything you read below is null and void for GCA purposes after that date. We still recommend signing up for eBay Bucks in case you dabble in reselling or just for big eBay purchases.

eBay Bucks is a program where you can earn eBay credit for purchases made on eBay. By default, you earn 2 eBay Bucks - equal to 2% (1 eBay Buck = $1) on your purchases but from time to time eBay will send out emails offering even higher earning rates - 8%, 10% - but usually for a short period of time. It's during these times you should pounce on better deals to really make things profitable.

Now before you get too worked up about free cash back, here's some limitations you need to know about Bucks:

* **AS OF 10/1/2016 YOU WILL NO LONGER EARN EBAY BUCKS ON GIFT CARD PURCHASES**
* You must earn at least $5.00 (meaning you've spent at minimum $250) within a quarter to earn rewards
* If you do **NOT** earn a full $5.00, you will lose all your Bucks at the end of the quarter
* Rewards are sent to you quarterly
* You must pay with PayPal
* Limit of $100 in eBay Bucks per single transaction
* Limit of $500 in eBay Bucks per quarter
* Read the full FAQ at eBay's site to make sure you know what you're getting into

Still interested? Make sure you've signed up for the eBay Bucks program here and perform the following steps to ensure you're getting emails from eBay for promotions including Bucks (yes it means you're signing up for eBay spam, but otherwise you'd miss these targeted offers):

**To check that you're signed up to receive emails from eBay Bucks, follow these steps**:

* Log in to your account and go to My eBay
* Click on the Account tab
* Select Communication Preferences
* Scroll down to Promotions and Surveys and click Show
* Select General Email Promotions and click Save

By signing up for general email promotions, you will receive emails from eBay Bucks.

When you get your eBay Bucks certificates you'll have **30 days** to redeem them on purchases on eBay. If you do not use them in 30 days, **they expire**.

## Step Four: Purchase your Gift Card

Now that you're enrolled in eBay Bucks, picked out your portal of choice, created an account there if you didn't already have one and have logged in to the portal, you're ready to click onward to your site of purchase (if online) and buy your gift card as normal. The biggest thing you want to do here is maximize your rewards on your purchase.

### eBay Gift Cards

The old bell-cow of GCA was purchasing eBay Gift Cards at office supply stores or online to earn 5x points, but as of October 13th you will no longer be able to use eBay Gift Cards to purchase 3rd Party Gift Cards. Also make sure you know, don't purchase eBay GC on eBay - you won't earn any eBay Bucks.

### Credit Card Rewards

You should account for the earning structure of the card you're choosing to pay for in your calculations of the worth/merits of your GCA transactions. There are a few credit card perks of note:

Chase Ink Plus/Cash: These cards give 5x UR for "Utility" purchases, and any purchase from popular gift card reseller Paypal Digital Gifts mysteriously code at 5x. This can be lucrative if done right.

Citi AT&T Access More Card: Earns 3x TYP for Online transactions. Per this thread at MilesToMemories, eBay counts in this for 3x TYP.

BBVA NBA American Express: Earns 5% cash back on anything during the NBA All-Star weekend and the 2 weeks of the NBA Finals. Limited to $500 cash back per year starting in 2017.

Discover IT Miles: Earns 1.5% cash back on all purchases, but is doubled at the end of the first member year netting an effective 3% (though you will have to wait for it).

## Step Five: Selling your Gift Card

After getting your gift card, either by mail or by email, make sure you record all the pertinent information in your spreadsheet and prepare the cards to sell to a reseller. We've had the best success with SaveYa and ABC Gift Cards/Card Cash, but there are many to check. Instead of doing that, go to the main page at GiftCardWiki, type in the name of the gift card you want to sell, and compare the Selling prices of different merchants. There are other avenues to sell as well. www.theplasticmerchant.com and Drew through his the-card-exchange.slack.com group as well. His site (as of 5/11/2017) is still being worked on but that address is www.thecardexchange.net. Jgauthier\_nola is partnered with Drew and can help you get on board with him if needed.

### Submitting Digital Gift Cards

This is our preferred method - if all else is equal, we recommend purchasing digital gift cards over physical ones. Why? Though the resellers typically pay less for digital than physical you do not have to go through the worries of your GC being lost in the mail on its way to you, your GC being lost on its way to the reseller, or even the whole hassle/cost of having to ship your GC to the reseller.

Just submit your codes online, select your payment method - resellers often offer ACH, Paypal, or may force you to receive a paper check - and wait for payment. All done!

### Submitting Physical Gift Cards

You're going to want to ship any gift cards in a high value with some form of tracking and/or signature verification. Since this can be pricey - $6.45 at USPS for a flat rate envelope - you'll want to group a good amount of GC together. The general rule is 3 GC = 1 oz, and 1 oz is the max weight that can be shipped with a standard postage stamp. If you can pool together a larger order to submit you greatly cut down on shipping costs. Wrap or tape your GC to a piece of paper, fold it, and place it in your envelope to mail. **DON'T LOSE THE TRACKING NUMBER! ADD IT TO YOUR SPREADSHEET! TAKE A PICTURE OF IT!**

That's it! Best of luck and do your homework. Read this whole guide 3-4 times before you act! You're not going to get rich on GCA - the margins are usually razor thin - but if done correctly you may find a good deal every once in a while.

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