This will be a short post, as I’ve got some in-laws visiting for a few days.
In the news: Frequent Miler pointed out that you can get 4% cash back on Amex gift cards, plus you can buy $500 Visa gift cards with Amex gift cards. (Hint, hint!) FM, who’s been churning out a lot of good stuff lately, also produced a great guide to earning points for buying flowers. I’ve always been curious about how much you could get back buying flowers and I’m glad somebody’s finally done the legwork.
And here’s something interesting from Electric Co-Op Today (emphasis is mine):
Many electric cooperatives offer their members rebates for one reason or another; most send a check or give a bill credit. But among some utilities, prepaid rebate cards are gaining popularity.
Is a card right for your co-op? Experts say there are many pluses—and a few minuses.
“It’s cheaper than a check for the utility to process,” said Brian Sloboda, senior program manager at NRECA’s Cooperative Research Network. CRN has been looking at prepaid rebate cards with its strategic partner E Source.
“If you buy the cards in bulk from a bank, the bank will actually give you a discount. For example, if you’re giving a $50 rebate, the bank may sell you the card for as cheap as $49.”
I had no idea banks were willing to sell $50 for $49 in this manner–I guess they assume some people won’t redeem the cards. So if you’re a heavy hitter looking to scale up your operation, there’s something that may or may not be worth looking into, I have no idea.
And speaking of interesting bank business models, does anybody remember the First Citywide Change Bank ads from SNL a long time ago (“At First Citywide, we just make change“)? They’re finally online–here’s part 1 and part 2. I’d embed them if I could, but… technical issues. One of my all-time favorites, so have a look.
“How do we make money? The answer is simple: volume.”
hahaha Yes I refer to that skit from time to time!
FM is about a month late. http://www.flyertalk.com/forum/manufactured-spending/1412472-topcashback-2-25-amex-gift-cards-but-changes-fees-bigcrumbs-2-a-271.html
There are better portals IMHO, but I won’t spill the beans.
Even if there was no breakage, the bank would come up basically even on the swipe fees selling at a 2% discount for Visa/MC (and do even better with Amex). Given the breakage that most people have on these things (leaving a few dollars or cents on them), probably very profitable to the bank at only a 2% discount.
Imlndustry-wide, breakage is around 10% per reports I’ve seen. That’s why gift cards have exploded in popularity. Of course, in our niche, breakage is close to zero – hence they must make it up on volume 🙂