Back in June, Doctor of Credit (and many others), wrote about a great feature of the Discover IT card, at first for any card holder, then later for only new cardholders. That is the Discover Double Cash Back (receiving that second half of cashback 13 months later). This has been absolutely huge in my opinion, because it really changes the math, especially for resellers.
Cut to today, and I happen to see a FrequentMiler QuickDeal that United is offering 10x at Sears today. At first I’m looking at this and saying to myself “Wow, I could totally leverage this to get myself another Lufthansa First Class flight.” But then I start thinking to myself, if I were to do go ahead and go through the United MileagePlus Shopping Mall, what would I be giving up?
Let’s look at the math:
Since Sears lets you buy gift cards and get miles, you should do that, so we start out at 10x.
Lets assume you get giftcards for exactly the same amount as the product you’re going to buy, now you’re 10x.
If you do as FrequentMiler advises, and use your DiscoverIT (if you haven’t already burned through your $1,500 of 5x w/ another 5x in 13 months), that kicks yourself up more. Yeah, United has a Back to School bonus, but, for me that’s kind’ve in the weeds.
So, here I have it. I could have 20x United miles or I could have 40% cashback, with the second half of that cashback coming in 13 months. Let’s leave the whole Time/Value of Money consideration out of here, and ignore all risk of Discover somehow shutting down or not paying that second half. That roughly equates to valuing a United mile at 2 cents. United themselves value their miles when they sell them on special, like their flash sale earlier this week for 2.3 cents per mile.
Wrapping Up
Thinking all that through, I have to say, I’m sticking with Discover Cashback. I feel like its a no brainer for me. Maybe before United’s devaluation that nearly doubled most of the premium cabin awards, I would’ve felt differently, but having just burned 130k miles per person to fly Thai and Lufthansa First from Bali, I’m feeling like United has effectively cut the value of their miles by roughly half. For me, regardless of what the “market cost” of the award is, I feel like United miles are worth less than a penny. Not that I bother with outlining point valuations.
Are we sure you get 10% buying gift cards via Discover and 10% using them at Discover, plus of course the cash back later?
If you get 10+10 in cash for buying, and then 10 +10 in cash for using the cards (albeit on the backend)
Sears must be headed toward bankruptcy. They keep trading losses for cash flow.
(I can’t say I have looked at their financials but maybe I should)
Everyone thought Lampert would turn this into another Autozone.
Instead, it’s like they hit him over the head and ordered him to buy Sears when he was kidnapped.
(Read about it if you don’t know what I am talking about, as it gets funny)
So yeah, I track the 20% figure that I offered… obviously, the 20% in 12 months is a TBD, but, I can tell you that I am tracking the 10% from buying the GC, then 10% from using the GC.
So, Trevor, you go through the Discover Deals portal and buy eGCs first (for 10% now and 10% after 12 months) and then go through the United Shopping portal and use those eGCs and buy more eGCs with that (for an additional 10% now+10% later)? My question is whether you can buy eGCs with eGCs?
I don’t think you can buy eGC’s with eGC’s… I’ll give it a try next time I buy eGCs though… but, I mean, Sears is generous, but they can’t be that generous… right?
Yeah, you are probably right. And even if the system allows it, you will probably get flagged sooner or later (especially because most large Sears eGC orders will have to be manually verified by a representative).
Trevor, I can confirm that you cannot buy eGC using eGC. Anyways, do you use those eGCs to buy stuff to resell?
Since Sears allows companies to list products on their site for a 15% fee, you can always relist everything you bought, use new gift cards, and buy from yourself, getting a huge profit each time, right?
Merchandise never need leave your house.
Buy a $1000 TV with 40% back, relist at 1000 and buy from yourself for 600 (getting paid as the merchant at 85%). I am not the first to think about it and a defense attorney told me he didn’t see anything illegal about it.
So, why bother dealing with messy FBA? Just keep selling the same item to yourself.
There have to be people doing this as I’m not the first to consider it.
I actually wrote about that a few months ago, the challenge was getting all signed up with Fulfillment by Sears, it took forever and I lost interest. Link: https://saverocity.com/taggingmiles/fulfilled-sears-game-changer/
Trevor, how soon will you get the first 10%?
I got an e-mail I think within 24 hours of the transaction.