tmount
Administrator
Earlier this week, I read through Chasing the Points’ post about how its been a bad month. As a small business owner, I commiserate with him, there have been times when I’ve bought products where I’ve lost, heck, there have been some products where my only recourse was to donate. But, I don’t believe I’ve ever lost as much as Chasing the Points has, in a single month In his post, he states:
I went in hard with a gift card deal and this one went bad, fast. I’m looking at a loss of $2000.
The lesson Chasing the Points learned is meaningful — that being, keep trying the things that work, perhaps not at such a scale, but just to know they work. I know that to this day, I still buy a Kohls Gift Card through a portal just to see whether I get points… At this point its more speculative but, I still feel like something positive might happen as I prepare for one of their big sales.
But what really struck me was how different gift card reselling is.
Warning: Pure opinion, any facts are unintended
Chatting with my friend @Saianel (and if you don’t follow him, you should, he’s a kick!) a couple of nights ago, it occurred to me that I see gift card reselling as: “mitigating losses” whereas I see product reselling as “the pursuit of profit.” Now, don’t get me wrong, if you’re really on top of things, you can get ahead of the game, if you decrement your costs by the value of your points, although, I prefer not to do things that way. In fact, whenever I analyze a product for resale, I will consider it before shopping portals, credit card rewards, and any store loyalty programs (like Staples Rewards), and only then, will I make the value judgement, if it makes sense to take a risk, because those three components could ultimately lead to a net profit.
A time and place for everything
Now, don’t get me wrong, I’ve dabbled in gift card reselling. Dabble being the key word here. Back when I spent more time chasing AMEX Sync offers, I would cash many offers out through purchasing gift cards, and resell them… Of course, like any risk you take, sometimes you get burned. There were some gift cards to certain retail stores (of things I wouldn’t resell) that I couldn’t make work, and rather than taking a loss, I just gave to my wife, who was more than happy to buy something nice. I suppose that’s a silver lining.
So what’s the point?
I think Chasing the Points highlights publicly (I actually did a search and I don’t think I’ve talked enough about my losses, call it a character flaw), the pitfalls that we run into. I know I’ve highlighted the pitfalls of MS and Reselling, and in fact, if you really wanted to go crazy, you could totally leverage Chasing the Point’s Gift Card Churning approach to increase your margin on reselling, but that may come down to a question of how complexity vs. simplicity of such systems.
At the end of the day, I think the message is clear, whether it is Manufactured Spending, Gift Card or Product Reselling, you should only do what you are comfortable with.
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