I like to tell anyone who reads the blog that they should be buying and selling gift cards for cheap points. I highly recommend it. There seems to be a bigger gathering today, compared to even 3 months ago. One thing that I haven’t really touched upon in gift card churning is playing the exchanges. Gift Card Wiki is a phenomenal tool. They also have this “Hot Deals” section where it broadcasts gift cards that are discounted abnormally higher than usual. Oftentimes, this plays well into a real arbitrage among the exchanges.
Reason 1
You could be stuck with a bad card.
Generally speaking, I don’t play the exchanges anymore. Some may have read that I recently did $5000 worth from Gift Card Zen. I don’t like to do it, but there are times where I will take the chance. When I first started the gift card churning I used to do it. I learned many expensive lessons along the way and that is why I have stopped playing the exchanges.
Whenever I can, I want to be the first person to buy the gift card. This makes you the first link in the supply chain and you know the gift card will be good, barring special IT circumstances. If you play the exchanges and you were expecting the purchase guarantee to protect you, time might run out as things are being sorted out
Cardpool is committed to making our customers happy by offering the highest level of service possible. If you are not satisfied with your Cardpool purchase for any reason, you may return your unused gift card for a full refund*. If you purchase any gift card from Cardpool, we guarantee it will be valid at the merchant and to the dollar amount specified on your order. We make such guarantees for up to 100 days from the date of your purchase, up to a maximum of $1000 per customer.
Let’s say you buy the gift card from Cardpool and you sell it on Giftcard Zen immediately. A customer who buys from Zen 10 days after you sell to Zen decides to use it 35 days after purchasing. That means 45 days have passed and if the card is bad, you contact Cardpool. They contact the original seller, all of this takes time. If the Zen customer waited any longer, it could have been 100 days passing at which point Cardpool will say, I’m sorry we can’t help you.
In this scenario, if you did it with CardCash you’d be totally out of luck:
CardCash is the largest gift card exchange in the world. Turn unused gift cards into cash or buy discount gift cards with the safety and security of our 45 day card balance guarantee.
CardCash has a shorter guarantee.
Why The Big Stink About Being #1?
Because you can easily tell the exchanges, I’ve been selling with you for all this time and not a single bad card has gone into your system. That’s what I told Cardpool and they waived the electronic gift card redemption fee. You will have better leverage and accessibility as a bulk seller when they know you can supply good cards. Trust me.
Why does a card go bad? It’s mostly because of fraud. I don’t want to become entangled in a web of credit card fraud or deal with following up with people when a card goes bad.
Reason 2
You have no idea what kind of card you will be receiving.
If you were banking on a physical gift card, you might be out of luck. I have sold thousands of dollars to Giftcard Zen that were physical cards where they accepted it as electronic cards. I never had to mail in a single card. When someone bought the gift card I sold, all they had were the electronic code or a digitally recreated bar code to redeem. What was once a physical card has merged into the ether of the Internet. You will not be receiving a physical card you thought you might get. If you were expecting to make a play with an exchange, you could be facing a bigger loss than you expect, especially if you are not a bulk seller. For someone like me, I never have to worry about that, but I try to avoid those situations altogether anyway.
Old News Worth Repeating
I wrote this back two years ago when I played the exchanges. I received a merchandise card and Plastic Jungle knew the card was merchandise credit so they would not accept it. You don’t want to buy a “gift card” and attempt to resell and then find yourself SOL when none of the exchanges will buy it. Especially if it’s something like Lane Bryant card or you wear size 2 clothes or you are a man.
Reason 3
You have no idea where it came from.
Once you buy a gift card from an exchange, they will not buy it back again. It makes reconciling a gift card incredibly difficult if something were to ever happen. If you were the original buyer and I bought the card and tried to sell it back to Cardpool and a third buyer buys the same gift card and something goes wrong, where do we go to fix it?
I ordered 3 $100 cards, then tried to sell them to saveya. A few minutes later I got this from saveya:
We experienced an issue during balance verification for the following gift cards that you have submitted.
and
This code was previously acquired from this seller
listed as the reason.
So apparently you can’t sell cards to saveya that saveya already sold at one point in time. I couldn’t find anyone saying this, a search for the message turned up 0 hits, and I can’t call saveya today because it’s Sunday. Tried on giftcards.com, got a “security error”.
As you can see, someone tried it and wasn’t working and went to Reddit for advice.
More Old News Worth Repeating
I also wrote this two years ago. If someone already played the arbitrage game before you, you will be out of luck. Here’s the hypothetical scenario I posted:
- You bought a Sears gift card on Plastic Jungle
- You sell Sears gift card to Cardpool
- I buy the Sears card from Cardpool
- I attempt to sell on Plastic Jungle
- Plastic Jungle will not accept because it came from Plastic Jungle
This one is probably ranked #1 as to why you should not play the exchanges. Imagine buying $500 worth of White Castle gift cards? What are you going to do with that? Hopefully, Harold and Kumar with Neil Patrick Harris are around to help you eat all of those steamed burgers.
Wrapping It Up
This is why I don’t play the exchanges. I have done it before and I learned that I do not want to get involved in all that trouble. It’s not worth it. As I read through the comments in the Reddit example, 2 of the 3 reasons I mentioned in this post are the pain points to the original poster. So save yourself all the trouble and don’t start. If you need advice and direction on where to start, shoot me an email! Find me on Twitter! I’ve been a little slow to get back to people, but I respond to everything. If I don’t, which happened just the other day, I missed the email entirely, resend it to me and I’ll get back to you. I promise. Unless you start off the email with “Hi Matt” then I completely ignore it because I’m not Matt.
Great post!
Where does “cleaning” the gift card yourself come in? For example, Starbucks allow you to transfer the balance from one gift card to another very easily. Can there still be trouble brewing from the original gift card or are you good to go now that all the money is on a clean card?
This is a good point – I was thinking along the same lines regarding cleaning the cards – is there a list of cards already that are ‘exchangeable’ or ways to make that happen. EG call up their CSR and ask for a new card/pin for the old one?
That would make it a lot safer to both buy and sell cards…
This is the approach I’ve been testing out lately. There is a thread on Fatwallet that gives some info, but it’s mainly about buying third party GCs with a store card. Time to take it to the forum I suppose.
Thanks, great idea, let’s take it to the forum!
But as MrWho mentioned, I read the same thing, on Reddit with SBUX. They were trying to “clean” the cards and SBUX terminated their cards with the balances and lost their gold status. It was an ordeal to get their money back.
i recently used my points earned in wiki for cash cack . beyond no choice they only allot you to by gift cards; i would have asoon applird it to my credit card balance but no… not an option so i chose a walmart card in the amount of $32.00 which isn’t working and the response from help is a pdf link i can print it and hope it works in the store… mind you i am going blind and therefore going to the store is really not an option, and even if i was able to do so , what garantee do i have it will work there? there is something wrong withe pin! rant over sorry:/
I went to Apex gift cards and they gave me a bad card. I got embarrassed in a restaurant. I’m scared because I bought some of them for vacation. Never again unless it’s Direct from the company. Now I have to worry.
Question… what if your looking for the gift cards as a consumer? Not for reselling… but for gifting? Is the risk then lower since i’m not buying and then reselling?
If yes… do you trust one site over another for an end user/consumer?
Admittedly… i’m brand spanking new to this. Normally i buy groupon type deals… but there aren’t any for Golden Corral. So i did a google search which brought me to you.
Thanks!
T
” Starbucks allow you to transfer the balance from one gift card to another very easily.”
For Starbucks, I’ve read that you will lose ALL of the GC balance when you merge and if the transferring GC is bad.
Great post!
To stay in for the long haul, you have to build trust with the exchange sites, especially since you’re often asked how you acquired these. I only buy gift cards from merchants directly when there are deals. But now the gift card resell gig seems to be something everyone & their mother is doing …
That’s right! You can’t just force it, it takes time to develop. It’s like planting an apple tree, you won’t see fruits in the first couple of years.
This is why I “clean” Walmart gift cards that I buy at a discount for my personal use – sometimes I don’t use them up in the guarantee window.
I just buy a new gift card for the same amount to get a new gift card number.
Back in the day, I used to do that too
Why’d you stop?
I was buying the Walmart gift cards on eBay and I didn’t understand the process when I put more thought into it. You buy the gift card today at 80% of the value through a buy it now and then you will receive the gift card 30 to 60 days after. The whole waiting process I didn’t understand and could only think of something nefarious. Did it about 2 or 3 times, profitable and no issues arose.
Besides the waiting game, I couldn’t understand why they couldn’t cut me out and sell directly to the exchanges and earn even more money.
Oh. I buy Walmart gift cards from Cardpool and the like. Minor discounts to be sure, but better than nothing. These gift cards are delivered electronically.
I’m conservative and would never do this either…I’m always paranoid that the original owner of the card will start to use the card as soon as they realize it’s been sold and they’ve collected the money.
The one exception is when I bought a Target GC, quickly loaded it to my account, bought another Target GC with that Target GC (actually I split it up into 4 smaller Target GCs), and then resold those. But Target isn’t so lucrative anymore.
Aboslutely right. It happens more often than you think of. On Raise, I had trouble with lots of card those were drained or turned out to be fraudulent. Those were for mostly my own use. Only few of them I resold when there was bigger arbitrage. Cardcash was sold $300 card by me by flipping from Raise and they were used by original user. Raise was and is still very phenomenal to back their guarantee- Raise is the best. But I feel that strained my relations with Cardcash. I don’t want to do that with Saveya as I am their bulk seller and hence, I slowed down very much on Arbitrage unless I can “clean” the card.
I’ve noted bids greater than the face value of the card on Ebay . Why would someone do that ? Is there a reason ? Anybody have a suggestion ? Thanks .
Ah, that was my reddit thread. I eventually ended up selling 1 to giftcards.com, and 1 to abc, and probably turned a very slight loss.
Also, apparently it’s not due to the card being sold through them before, but just a glitch, as http://www.doctorofcredit.com/100-off-85-on-ebay-is-back-on/#comment-145820 reports the same error on a brand new card.