Last week we posted the good news on quarterly categories, with Freedom Q1 2015 at supermarkets and Discover Q1 2015 at gas stations.
Now for the bad news…
Discover
[UPDATE: See Dissecting my Discover Statement for an update on this.]
The current (Q4) Discover category is online purchases, including Paypal, Google Wallet, and most online retailers. In past years, an easy way to cash out on this was to buy gift cards online, from GiftCardMall or other gift cards re-sellers. It appears that this is no longer the case.
The first clue was when Grant from travelwithgrant.com posted that his GiftCardMall purchase did not result in 5% cashback.
This has now been confirmed by Discover to orensmoneysaver.com that gift card reseller Junkcard does not count as the 5% category, since, ” JunkCard LLC is considered a service provider since no merchandise is sold.” Apparently, they consider gift card sales to be a “service” and not a product. Only merchandise purchased online is eligible. This is an update in their system from last year.
This is probably why Grant didn’t earn 5% on his GiftCardMall purchase. And based on this, it would seem obvious that Evolve also won’t earn 5% with Discover as we reported earlier.
Discover Plan B
The Q4 Discover remains a very generous category, since it’s very inclusive. Here are some remaining options:
- Online purchases from Amazon, eBay, Walmart, Target etc. would all earn 5%. Â You can even buy $200 Visa gift cards at walmart.com or staples.com, but the fees will eat up most of your profit. (If you’re going this route, go for Staples over Walmart since Staples sends GiftCardMall Visa gift cards which are PIN-able, but Walmart sends more difficult Vanilla Visa gift cards.)
- Pay with Discover at lots of other online shopping websites. Whether you use the site’s payment system or if you use their Paypal option, you’ll earn 5%.
- You can send money to someone via Paypal or Google Wallet and earn around 2.1% profit, after accounting for the fees. [UPDDATE: I’m no longer sure this will work. I added $20 to my Google Wallet balance and it does not look like it will earn 5%. However, it could be sending money is different than adding money, but at this point I’m not sure.] [UPDATE #2: My statement just closed, and according to the Discover rep that I chatted with, I DID earn 5% on my Google Wallet top-up. I thought I did from my own analysis of the rewards, but it’s a little hard to tell sometimes, so I confirmed it with the rep.]
- You can tap-and-pay with Google Wallet NFC in-store and get 5% as we reported earlier.
- Buy eBay or Amazon gift cards for future use.
- Buy your Holiday gift cards on eBay or Amazon. GiftCardMall sells lots of gift cards on eBay (though no Visa gift cards), and Amazon sells lots of third-party gift cards and e-gift cards.
- Via Saverocity, Amex gift cards will trigger the 5%. It will originally process as a Cash Advance, but eventually will switch over to a regular purchase and earn 5%.
One final idea: We reported that on Black Friday (November 28) from 6 AM until noon (central time for online purchases), Target stores and target.com will be selling Target gift cards at a 10% discount. Max $300. This isn’t a huge moneymaker, but if I’m by a computer during those 6 hours, I’ll buy $300 in Target gift cards and pay with my Discover card. I’m currently stocked up on Target gift cards so I won’t be keeping the gift cards, but I’ll resell them for around 90%Â of their value, and I’ll be left with the 5% Discover cash-back as profit.
Citi Dividend
Citi released their 2015 categories, and it ain’t pretty. We were expecting Q1 to be drugstores, our favorite place to buy gift cards, as its been in the past. No such luck. This coming year Q1 is Macy’s.
Here’s an email I received today from Cit:
I think it means that we’ll earn 5% at Macy’s plus at all home furnishing stores, but it’s still pretty useless for me.
Citi Plan B
The only category that looks interesting to me is Best Buy, since you can buy $200 Visa gift cards for a $6 fee. You also earn 2% back in Best Buy Rewards. All told, assuming free-unload via Bluebird/Serve, it’s possible to profit 2% cash and 2% Rewards. Best Buy is the current 2014 Q4 category, and will be the 2015 Q4 category.
Tip 1:Â Best Buy caps us at $300 in rewards per year, but there’s no quarterly cap. It’s possible to earn a full $300 in category spend in one quarter by spending $6,000 in that category.
Tip 2: Citi counts the Reward Dollar year based on when the cash-back posts, which is at the statement close. This is an important distinction.
To illustrate, let me give myself as a perfect example: I maxed out the $300 annual reward max for 2014 by purchasing gift cards at drugstores during Jan.- March 2014. My statement closes on the 4th of each month (or around there). I can go on December 5 – 31, 2014 and purchase $6000 of Visa gift cards or other gift cards at Best Buy, and I’ll  earn $300 in Dividend Rewards which will post on January 4, 2015. Since it posts in January 2015, it counts as 2015 Rewards and I’ll get the 5%, despite having maxed out 2014 earlier in the year.
My thoughts: I’ll probably keep my Dividend card for now and possibly use it at Best Buy in December. Now that they dropped the drugstore category, I’m strongly considering doing a product change from the Dividend to the Citi Double Cash.
I’ve been to four Best Buy stores and only found one vgc. I don’t know if it’s true but a few employees told me Best Buy is discontinuing them.
#BadNews
I still see them in my local BB. Some stores make an individual decision not to carry them, but in my experience, most do carry them. Maybe the stores you visited were simply out of stock? Or maybe, they’re really discontinuing them.
I had no issues receiving the 5% for GCM purchases using my wife’s Discover card, but I should note that it’s the older More rather than IT card so I’m not sure if that matters. I’ll also add when I received the email about the Dividend categories today, my first thought was “Goodbye Dividend, hello Double Cash”, although I’m not sure yet as the 4Q Best Buy is still pretty useful, plus I’ll kick myself later if good categories come around in 2016 when this card is no longer available to new applicants.
I see we think alike.
After I wrote the post, I decided that I probably won’t do the product change because of Best Buy.
Great post. Have you ever tried using a Discover card for Google Wallet peer to peer payments? I’ve seen reports of Discover considering AMEX gift cards as a cash advance. I am wondering if this will be the same?
I just tried it. I added $20 to my wallet balance (I didn’t actually send it to someone), and the charge went through fine, despite the fact that I have a $0 cash advance limit. Hopefully, the 5% will post properly. It shows up as “Google Wallet topup”. If they know it’s a topup, maybe it won’t earn 5%. We’ll have to wait and see.