Published on April 22nd, 2015 | by Chuck44
Gift Cards on eBay, 5x and Cash Advance – take 2
We reported last week on two major issues which cropped up with purchasing gift cards on eBay:
- We’re no longer earning 5x for the purchases
- It’s coding as cash advances
In this post, we’ll try to clarify what works, what doesn’t, and why.
As we know, Giftcardmall on eBay and Paypal Digital Gifts on eBay were earning 5x with INK. The reason for this was not because eBay is an office supply store, rather because it was considered ‘Utilities’. As advertised, INK earns 5x on telecommunications charges, but apparently anything under the broader ‘Utilities’ category earns 5x as well. eBay seems to have various codings for their sellers and they considered Giftcardmall and Paypal Digital Gifts to be ‘Utilities’. I guess this is a sort of general category and they decided to put gift card sales as part of the category.
[UPDATE: Mileswhip informed me that not all ‘Utilities’ charges will earn 5x, but these have been.]
Recently, someone wizened up and switched the coding of Giftcardmall on eBay to the ‘Financial & Other’ category. Since it’s no longer coded as Utilities it doesn’t earn 5x anymore. This also caused another unintentional headache with these purchases wrongly being coded as cash advances.
I believe the cash advance problem will correct itself as Giftcardmall continues to receive bad feedback on eBay. (Be sure to leave bad feedback if you were charged a cash advance fee). The question is what happens then. Will Giftcardmall revert back to the Utilities coding or will they work some other fix.
There are three possible explanations as to why they changed the coding from Utilities to Financial:
- Giftcardmall is somehow saving fees with the new coding or they otherwise considered it to be more accurate.
- Giftcardmall doesn’t like ‘us’ and doesn’t like the fact that we’re earning 5x on the purchases which incentivizes ‘us’ to keep on purchasing these discounted gift card deals.
- Chase pressured Giftcardmall to change the coding so as not to pay out 5x on such purchases.
My guess is that the true reason is #2 or #3, in which case Giftcardmall will work out the cash advance some way, but they won’t be putting back the Utilities coding. Possibly they’ll change it to code as ‘Miscallaneous’ or somehow they’ll work out that it won’t code as a cash advance despite remaining under the ‘Financial’ category; not everything under that category gets hit with cash advance fees. (Even notorious-difficult Citi hasn’t been coding Buxx loads as a cash advance, despite the fact that it comes up as Financial.)
As of now, I have not seen any reports of changes to purchases made from Paypal Digital. They still are coding as Utilities and are thus earning 5x with INK. Likewise, there haven’t been any cash advance reports for these purchases that I’ve seen.
If the GiftCardMall switch was influenced by Chase then it’s it’s quite possible that Paypal Digital will be felled next.
SVM Gift Cards
We’ve heard numerous reports that SVMGiftCards (a newer gift card seller on eBay) does not earn 5x, yet we haven’t heard of any issues with cash advances charges. I used a Citi card with SVM and it did not code as cash advance, rather “Professional Services not otherwise classified”. My guess is that with Chase it will be called “Miscallaneous Services”, which will earn 1x rewards and won’t be considered a cash advance. If anyone can let us know more, please comment below.
[UPDATE: This issue of cash advances on Giftcardmall/eBay purchases has been fixed and it’s now safe to purchase gift cards from them on any credit card.]
Since Giftcardmall in coded as ‘Financial’ there have been problems with banks charging cash advance fees. While not everything coded as Financial will always be considered a cash advance, this particular instance seems to be pretty bad. Here’s the data we have currently:
- Citi is coding this as a cash advance (unsurprising)
- Barclay is coding this as a cash advance (surprising)
- Chase seems to code this initially as a cash advance but ultimately it switches over to be a regular purchase. [UPDATE: Another report indicates that Chase INK did come through with a cash advance fee.] This means that in order for the purchase to process you’ll need a cash advance limit, but in the end it will code as an ordinary purchase. This is terrible since you can’t put yourself down to $0 on your cash advance limit and there’s always a risk of something going wrong and getting hit with a cash advance fee.
- Amex Coding as purchase, not cash advance
- US Bank Coding as cash advance.
- Fidelity Amex Coding as ordinary purchase, no cash advance issue. We should assume that any BoA card will be the same, but some on Slickdeals are reporting otherwise.
- Bank of America Coding as cash advance. (Odd, being that Fidelity Amex is coding as purchase.)
- Capital One Coding as cash advance
Please let us know if you have any data using any other cards. Let us know which card you used and which gift card seller you purchased from. (We’re mainly looking for eBay/Giftcardmall purchases.)
Based on the current coding of Paypal Digital and SVM there’s no reason for there to be any cash advance. There is, of course, a risk that there could be a change on this front at any time, particularly with Paypal Digital.
To review, as of now:
- Giftcardmall is coding as Financial (which may or may not trigger a cash advance)
- Paypal Digital is coding as Utilities (5x)
- SVM is coding as some other miscellaneous category.
It’s definitely worth lowering your cash advance level to zero before making a gift card purchase on eBay. Certainly with Giftcardmall on eBay it would be a big risk to make a purchase without lowering that first. Paypal Digital and SVM seem to be okay for now but there’s always a risk that something could change.
As far as earning rewards is concerned, since Paypal Digital is still working to get the 5x rewards, we can buy eBay gift cards from them and then use those to buy other items from Giftcardmall or any other seller on eBay. We can also earn 5x by purchasing gift cards from Paypal Digital to other merchants such as Sears, Southwest and many others.
The info in this post is the current information according to the best of my knowledge. If anyone had different experiences, please let us know in the comment so that we can keep the post updated.
Hat tip goes to MilesToMemories for some of the info in this post.