The whole point of reselling gift cards is, naturally, to offload them to get your minimum spend met and get your money back ASAP.
With a bit of luck, you may even get a little extra beer money!
There are generally two things to consider when you list your gift cards.
The first is how quickly you want your money back, and the other is how much of a profit you want to make.
It is rare that you can get the best of both worlds. Not impossible, but rare.
Reselling gift cards quickly
If a quick sale is your priority, you need to be the seller with one of the biggest discounts. In most marketplaces, gift cards can be sorted based on how big a discount is being offered.
If you want your cards sold quickly, make sure your listing is near the top and highly visible, just like in the Office Depot example above.
At the same time, you need to make sure you are still breaking even. If you have done your research, you should have a gift card that would let you list near the top, but still make you money.
There is, however, a risk to discounting your cards so that they rise to the top.
The act of discounting may spark a price war, with the other sellers increasing their discounts too. To avoid kicking off a selling frenzy, list only a few cards at the highest discount rate. When it gets sold, list another one. Hopefully, other sellers might miss the fact that they are being outsold.
Conversely, if you do not see a sales notification after a day or so, check in. You may have a bigger discounter pulling the same trick on you. You then have to decide if you can afford to discount just a little more to get back on the top of the list.
Also, cards that have lower face values tend to sell quicker. If two Gap gift cards are both going at a 10% discount, the one that is $25 will often sell sooner than the one that is at $200.
Finally, set up an electronic funds transfer option if possible, like an ACH transfer. That will get your money into your bank account much faster than waiting for a check to be mailed.
Reselling gift cards for a profit
If your objective is to make a small profit, you’re going need to buy for as low as you can, and sell for as high as possible. It sounds simple, but the devil is in the details.
Buying as low as you can
Aside from trying to get as big a discount as you when you buy, you’re going to need to get serious about stacking offers, rebates, and maximizing category bonuses.
If you get a great cash back deal, pounce on it. Our favorites are the sweet, sweet offers that American Express throws out there from time to time. Some of these offers have been for Staples, OfficeMax, Gap, and Sam’s Club.
We go into details on how to get the most out of these offers in the 201 Gift Card Reselling Course, which we created for our members.
Get extra money from rebate portals
If you have the opportunity to do so, try to get a rebate from a cashback portal like TopCashBack and eBates when you BUY the gift cards (like on Staples).
At the time this course was written in Dec 2016, TopCashBack was paying up to 3.5% for purchases on Staples (see below).
This is supposed to EXCLUDE gift card purchases on Staples, but sometimes the rebates do get logged and paid out, like below:
Usually, they don’t:
If you get one or both rebates, great! If you don’t – this would be a good time to get familiar with this acronym: YMMV – Your Miles May Vary. We keep a current list of portals in the 201 Gift Card Reselling course.
Maximize category bonuses like you mean it
With the Chase Ink Plus, you get 5X Ultimate Rewards points for office supply store purchases like Staples and Office Max, but also when you pay using PayPal Digital Gifts and make the Ink Plus the preferred payment method.
That’s pretty neat. If you have the Chase Sapphire Reserve, transfer your UR points to it, and get an additional 50% when you use the points to redeem for travel costs like flights, hotels and car rentals.
Selling As High As You Can
Sell more to get lower marketplace fees
You can get a higher payout for your cards by getting a lower marketplace fee. How? Well, once you build up a track record and a healthy volume of sales, apply to become a bulk seller for lower rates. For SaveYa, if you sell at least $1,250 a week, you can sometimes get rates at around 10%.
Raise has a similar program, with rates going down to 8% for the most popular cards, and 13% for most others. These rules change from time to time, so the only way to find out is if you apply.
You might also have to be a little creative in your pricing strategy. Price just a few of your cards at a high discount, and see if your competitors will match you. If they do, they may also change all the prices of ALL their whole inventory.
This would clear out their supply much faster, thinning out the herd a bit. Check out what happened to Applebee’s gift cards, which had a major GLUT in the first week of December.
So, I listed one of my cards at a loss-making 18% discount, just to see what might happen. Within a day, many other cards were also listing at 18%. My one card sold at the discount, but none of my other Applebee’s cards that were listed at a 12% discount were seeing any action.
A week later, with the selling frenzy abated, I noticed that the rest of my Applebee’s cards were finally getting sold, which earned me a slightly better than breakeven sum.
Profit takes patience
When you have the funds to pay off your credit card in full every month, you have an advantage that your competitors do not – time. The closer you get to a full month from the date of a major gift card sale, the more likely many of your over-extended competitors are going to need to dump their inventory for cheap. This will clear off the big discounters, and allow you to sell yours at a higher price (with smaller discounts).
The Cold Stone Creamery example we discussed earlier is a testament to that! 29% is a horrible discount to have to offer!
I felt bad for the person listing the $150 gift card at a 29% discount, especially if he or she had to pay the full Raise fee of 15% after the sale. Hopefully it was a gift card they were gifted and didn’t care for it one way or another.
This wraps up the module on reselling gift cards to the marketplace.
In the final module, we’ll look at how to keep track of your cards, how to reduce risk in this hobby, and some other next steps.