Posted by Chuck on July 17, 2015
Gift Card Churning

Published on July 17th, 2015 | by Chuck

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10% Back on Sears Purchases Through Discover Deals, Double-Cash, & How to Maximize

Discover Double

Discover Deals is a great shopping portal for Discover cardholders and often offers the highest cashback rates at many top merchants. What’s even more awesome is that now many of us got in a temporary offer from Discover to double all cashback for a year, including cashback earned from credit card points, from the portal, or anything else. That offer is no longer available for signup to existing Discover cardholders, but you can sign up for a new Discover card and get the deal. Even if you already have one Discover cashback card, you can signup for a second one and take advantage of this deal.

Sears 10%

We’re here today to discuss the Sears rate in particular. It was at 10% around a month ago, then it dropped down to 5%. Today, FrequentMiler broke the news that it’s back up to 10% until August 31, 2105. Honestly, this was a surprise to me as I assumed they lowered it due to the over-generous nature of the offer in conjunction with the double-cash promo. It’s definitely nice to see it back and we know it will be here until 8/31/15.

What’s even more awesome is that Discover is currently offering 5% cashback on the card in the following categories: home improvement stores, department stores, and Amazon. Sears is considered a department store and would work to trigger the 5% rate. If you add the 5% plus the 10% from the portal and then double that total at years end, you’ll end up with a whopping 30% discount on your purchases.

 

Okay, so what should we do with this promo? Buy stuff we need anyway? That’s no fun! Let’s be more creative…

Sell Gift Cards

One unique aspect about Sears is that they’re known to pay out portal points/cashback on gift card and e-gift card purchases. You’ll get the portal cashback whether you buy physical gift cards or e-gift cards (even reloads will work), but you’ll only get the 5% quarterly bonus if you buy e-gift cards since physical gift card purchases done at sears.com are run through the Kmart system and is not considered a department store purchase. See FrequentMiler’s guide to Sears gift cards for more info.

For our purposes, we want to maximize the 5% category bonus, so we’ll want the e-gift cards. You’ll get a whopping 30% off the price of the cards (after the double cashback comes at years end) and you’ll be able to sell it at a nice profit.

For example, Saveya is currently offering 84.5%.

  • Pay $1500
  • $75 back from quarterly category
  • $150 back from portal
  • $225 back at years end
  • Sell for $1267.50 to Saveya
  • Profit: $217.50

Note: There is definitely a risk of devaluation of the gift cards. That said, it’s hard to hear a real possibility of loss, assuming the portals all track properly. Also note that we’re all throttled at just $1500 per person, so it’s not a very scalable thing and may not devalue terribly.

Note #2: Saveya has strict limits on how much you can sell to them, see The Complete Guide to Selling your Unwanted Gift Cards for Cash for more info.

Note #3: You won’t get any immediate profit; in fact there’ll be a $7.50 loss. The profit will only be realized at years end.

Other Resellers

As noted, Saveya has strict limits on the amount of gift cards you can sell them and most of us will have to sell to other resellers.

You can get 84% from Cardcash or Giftcardzen, but only with physical gift cards. If you purchase the physical gift cards from Sears it won’t work to trigger the 5% quarterly bonus. For this reason, it won’t be so easy for most of us to take advantage of this deal.

A workaround route is to a buy $5 physical Sears gift card from a Sears store and then reload that card online at sears.com. This way, you end up with a physical card which can then be sold to Giftcardzen or Cardcash for 84%.

  • Pay $15 for three separate $5 physical Sears gift card
  • Pay $1485 for three separate reloads of $495 each
  • $74.25 back from quarterly category
  • $148.50 back from portal
  • $222.75 back at years end
  • Sell for $1260 to Giftcardzen or Cardcash
  • Profit: $205.50

Sell iPads

If gift cards isn’t your speed, you can try reselling merchandise purchased from Sears. Orensmoneysaver has a great idea for reselling an iPad from Sears. I haven’t researched this extensively (I’ll leave that for the reselling experts to chime in on), but the gist is that you can buy 3 iPads from Sears for around $1400 and resell them for a walk-home amount of $1230.

The beauty of reselling merchandise – something that we gift card sellers just can’t seem to get into our head – is that you can double dip with the Sears portal by purchasing the gift card intially through the portal and then buying the iPads through the portal. That’s awesome on its own and it’s doubly awesome since all the cash back will be doubled.

  • Pay $1400 for the Sears e-gift cards
  • Get $70 back for the quarterly category
  • Get $140 back from the Discover portal
  • Use the gift cards to buy the iPads
  • Get $140 back from the portal a second time
  • Get another $350 back from Discover at years end (brings us to a total of 50% cashback!)
  • Get $1230 on the sale of the iPads
  • Profit: $530

See orensmoneysaver for more details on this opportunity (and some more creative stuff along the way). Of course, there are probably lots of other reselling opportunities as well.

Important Note: Technically, we’re only supposed to get cashback from the Discover portal when paying with the Discover card. In the above scenario, only the initial gift card purchase was with a Discover card and the iPad purchase was not. There is a risk that Discover could claw back the cashback from the second go-round. Maybe it would be a good idea to pay the last few dollars of the iPad cost with your Discover card so that it looks a little better.

See the comments on this FrequentMiler post where a few mention getting the cashback clawed back. This may be a new trend; we’ll have to wait for more data points on that.

Risks of the reselling route:

  • Discover clawback on the 10% (x2) for the iPad purchase. [If this happens, you’ll be out $280 and your profit is down to $250.]
  • Merchandise returns on Amazon.
  • A flood on iPads on Amazon causing the prices to lower.
  • Probably other stuff I don’t know about since I don’t do much merchandise reselling.

Personally, I think I’ll be sticking with the gift card route since I’m more comfortable with gift card reselling and have bulk seller status with various exchanges which changes a lot. Those more comfortable with selling merchandise will likely prefer the increased profitability of the iPad deal.

 



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JB
JB

Looks like a great opportunity. Thanks Chuck! How do I know that Saveya accepts eGC for a certain merchant? On the Giftcards.com site it was easy as it was shown before clicking the “SELL” button but in the new site it doesn’t…

TechMo
TechMo

Check giftcardwiki.com – it lists the sellers on the right side and which form they accept.

JB
JB

Mille grazie to both of you 😉

Matthew C.
Matthew C.

Could you take the e-giftcards you buy from sears.com and use them to purchase third party gift cards/visa/amex at Kmart? Gas gift cards could mean more profit…..

Feel
Feel

YMMV, depending on your local store policy

Cowboyguy
Cowboyguy

Saveya has a $300 limit per 30 day period so thats a BUMMER.

Feel
Feel

Is Sears.com considered as department store or online store by discover? On the discover website they just said Sears, I am not sure if it includes just the stores or the Sears.com as well

Eric
Eric

I asked Discover a couple of weeks ago and was told that Sears.com is considered a department store.

Drew

The problem with using Discover Deals for reselling merchandise is it shows ridiculously high prices when going through the portal. Those $435 iPads are $617 when you click through Discover Deals.

Evan
Evan

I always had the following question about Sears gc’s: can you load them with more value than what they originally held? I have some $50-100 gc’s, can I load those up to $500?

R.
R.

The only limitation is that a single GC cannot hold more than $500.

sheila
sheila

Just to be certain. Does Discover pay the bonus based on the amount charged on the card?

MH
MH

Charges minus returns I would think.

sheila
sheila

Then will the charge on the card be very small or even zero after using the gift card? Then no cash back?

janol
janol

yes, before tax

Vikas
Vikas

Does anyone know if discover portal pays cashback for e-gift cards purchased at Nordstrom? I have to buy couple of expensive items and would love to double dip the 10%+5% cashback from portal and card.

janol
janol

no, they do not pay for giftcards

Vikas
Vikas

Thanks for the response…

Olanky
Olanky

For those who wish to take the iPad resell route: you should be careful with the iPad that quality photo shipped to you. Last month, I tried to take this double dipping deal and buy an iPad 2 Air as gift to my parents. I finally got an iPad with damaged package. I called to make an exchange. One week later, I got the same one that I shipped back to them. Although I though I was joked, I called them wishing to indeed get a “new” one to take this deal. (Yes, the iPad I got was never opened and should be new. But I don’t even want to send it as a gift because of the ragged package. I think if you sell it, you will take the risk of return.) Maybe they just don’t have the iPad in perfect condition, they offered to give me refund finally.
PS: What was worse, I didn’t receive the email confirmation from discover for the sears egift card purchase……

glycine76
glycine76

Now everyone is going to do it. We will see a crack down/terms adjustment very soon. 🙂

Phong @ FinancialBasis.com

Wow great post! Although I always think the whole portal thing is so sketchy. Especially if they don’t track. I’ve read articles about what to do in order to maximize portal tracking. Still seems scary when you do everything you can and you might not know if it track and then losing out on $100+ :(.

prand
prand

Another risk is that you are relying on discover to honor every penny you spent in the year end. But as far as I know, it is not unusual for discover to lose track of some of your spending.

sheila
sheila

I have a handful time that Discover didn’t track the purchases correctly even though they were real spending on merchandise.

DavidNJ
DavidNJ

My Wife has the Discoverit card so I just sent a referral from her to me. She is suppose to get a $50 referral bonus and I get $50 on my 1st spend. Will we both get another $50 in a year from now w/ the 100% bonus?

anthonyjh21
anthonyjh21

In my situation I’m not sure this is worthwhile, although I’m still debating it.

———-
Pros:
14.5 profit margin

Benefit to my bulk seller status

Cons:
Must wait a year to get the $217.50

Cross my fingers there are no clawbacks and/or tracking issues with the gift card (its against their terms after all)

Must deal with Saveya limits (even for me as a bulk seller with $6k/mo limits) because I have three Discover cards and this will cause me to have to wait until subsequent weeks for my weekly limit to open back up. It would also hinder any other sales to Saveya while I force feed Sears gc through the system as I’d have no selling limit left.

Hope there is no devaluation in the midst of completing this deal

My opportunity cost is 10%, coming from eBay gc’s purchased at Lowes and used as part of the eBay gravy train of gift card/bullion arbitrage.

———–

Is all of this really worth 4.5% to me? After writing this all out, I’m thinking the answer is no but it’s still an interesting opportunity w/ the increased portal payout.

Eric
Eric

Did you decide to do this deal? I don’t think the 10% is really an opportunity cost. Wouldn’t you instead be getting the 10% from buying the Sears gc with the Discover cards? That would make it a wash.

anthonyjh21
anthonyjh21

It’s an opportunity cost for me, personally. I’ll explain.

I have no value with Sears. I don’t buy and resell through Sears/Kmart nor do I typically buy any products through them, as it’s a hassle and the closest one is half an hour away in a ghetto part of town. Thus the value of a Sears gift card is only as high as what the best buy rate I can get from a resale site.

Ebay on the other hand has value. I’m able to buy gift cards via ebay deals and gold/silver coins when ebay bucks are 4x-5x. It plays heavily into my MS/arbitrage strategy.

Eric
Eric

I thought you were referring to losing the 5% (doubled) cash back using your Discover card which is the same either way. Now I see you mean you could end up getting stuck with the Sears gc which would be worse than the Ebay gc which you would be able to use easily, correct?

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