Posted by Don L on April 21, 2017
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Published on April 21st, 2017 | by Don L

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Prepaid2Cash Review – Expensive Gift Card Liquidation

P2C #1

Quick Summary

Prepaid2Cash (P2C) is a website that allows you to liquidate gift cards at a relatively high cost.

How It Works

Signup for an Account

(Quick) Requires: Name, Address, Email, Phone [text verification]

Enter Card Information

(Quick) Add all the important card information from the front and back of your gift card

(Some Hassle) I was also asked to provide proof of physical ownership which required taking and sending a picture of the gift card.  [I’m not sure if this additional step is P2C’s standard protocol, or based on the historically high rate of fraud with the gift card type I used (US Bank MCGC) (rate based on DoC reader comments)].

Choose Payment Method

To receive your funds choose a paper check ($2.50 fee) or Bank ACH ($1.50 fee) [which requires adding bank account information]

Infographic

Here is the site’s process infographic:

P2C #2

MS Tool Dimensions

Fees (Service Cost) – Expensive

Prepaid2Cash charges a 5% processing fee of the card balance (+$1.50 for direct deposit or $2.50 for a mailed check per card).

Fees for a few common gift card values:

P2C #3

[Update 2017-12-26: Processing fee increased to 7.5%, that’s really expensive.  Calculations and graphics in post not yet modified.]

Convenience (Time Cost) – Good

The ability to liquidate a gift card online is quite convenient.  Image documentation of gift cards definitely slows things down.

Float (Lost Interest Cost) – Fine

Prepaid2Cash states that direct deposits (ACH transfers) take about 4 business days.  This matches my experience.

Volume – Limited

Maximum Daily Transaction Limit: $500 (Source)

Which calculates to an implied monthly (30-Day) limit  of $15,000 [an approximate yearly limit of $180,000]

Risks

Counterparty Risk – Will P2C Deliver Your Gift Card Funds?

Probably a fairly low risk of not receiving your funds.

Looks like they’ve been in business for a while since 2010, and nothing negative immediately pops up with a Google search (as of April 2017).

Founders (#1, #2) still seem connected to the company.

One odd thing – the same comment appears again and again: BeerMoney (actually many times across reddit), PC #1, PC #2 (same article), MMS.  I figure this has to be a low cost marketing strategy (even something I might do 🙂 ), but I guess there’s always a tiny chance that a P2C super fan could be out there … somewhere … spamming comments.

Identity Theft Risk

Probably a fairly low risk of having your identity compromised.  No SSN or government issued documentation is collected.  The site notes that it uses bank-level security.

P2C #4

FAQs

Which Cards Can I Use?

The site appears to support Visa, MasterCard, American Express, and Discover Gift Cards/Prepaid Cards.  I have only personally tested a US Bank MCGC.

Geographic Restrictions?

Per the P2C FAQ:

At the moment, we only serve customers who reside in the United States and can’t accept transactions from customers who either reside, wish to have their payment sent to, or wish to send money to a bank that is located exclusively within the states of: Arkansas, Florida, Hawaii, Illinois, Kentucky, Maine, Mississippi, Ohio, Rhode Island, Tennessee, Vermont, West Virginia and Wisconsin. We are working on adding these states as soon as possible.

Final Notes

We would love to hear your thoughts, data points, ideas, … in the comments.  Have you heard of/do you use a competitor’s service?

You can also reach me at anotherdonaldson@gmail.com

All the best!

Appendix – My Rationale

The Office Depot Deal

I got excited when the Office Depot deal was reported.  Free money gets me kind of euphoric, and a $14 profit per $100 gift card was a pretty good deal (not including the credit card cash back, or other potential promo stacking opportunities).

I’m fortunate to have a number of brick and mortar options to transform gift cards into MOs where I live, but (at times) while waiting in line I could feel the opportunity cost (just please don’t ask me to define the term).

My Fascination with High Cost MS

I’m also endlessly fascinated with high cost MS (manufactured spend) which perhaps many in our hobby wouldn’t even categorize as MS.  Techniques where the fees are greater than the credit card’s transaction earning rate but less than the value of the card’s signup bonus.

So when I could still make a profit (albeit it a much lower profit [about half $7.50]), I decided to give Prepaid2Cash (P2C) [a site specifically built for gift card liquidation] a try.

A Fascination with High Cost MS is Generally Not Smart

There are many better MS methods (cheaper liquidation) methods – we have a list of recommended sites.  Personally, I think FrequentMiler’s monthly update on the state of manufactured spend is the best that I’ve seen, but also enjoy prospecting in r/churning’s weekly manufactured spend thread.

Even if you don’t use a better liquidation method, economically it makes more sense to just spend the gift cards on your normal/organic spend than to use a high cost liquidation method – the high cost liquidation method is more costly than the credit card rewards earned.  Unless all of your spend is spend for credit card signup bonuses – and then I salute you.

I generally run separate ledgers for normal spend and hobby spend, almost treating the travel/promotional hacking as its own business.  While not always optimal it keeps things simpler for me.

Why High Cost MS Tools?

Optimistically, I feel some of these tools/methods might only be a step or two away from being quite useful.  Perhaps with a little promotional alchemy, a discount here, a rebate there, we might happen upon something quite valuable.

As DoC readers are the smartest people on the Internet, perhaps you’ll find a use.

 



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This is great for that recent Office Max deal (or other $100 VGC deals where the discount is $10+). Other than that, I would find limited use at a 5%+ cost.

In any case it’s still cheaper to Paypal out at 2.9% + $0.30.

Awful deal. If you really need to liquidate a card use Square and pay the 2.75% fee and you get the money within a day. (The best option is money order, but if that’s not available, Square is next best option).

Thanks @ Don L
Great review of MS and links.
I usually use Prepaid G cards to pay my bills but recently I have accumulated few thousands due to recent CC sign ups.
I can’t do BB loads as WM is far from where I live and haven’t tried converting them to MOs.
I also thought of using Plastiq to pay my rent but the fee is prohibitively expensive as I don’t believe in spending money to make little money.
I have also exhausted CC funding for bank accounts opening.
Maybe I’ll just buy grocery store GCs to meet the requirements of the promotion.

interesting post Don thanks for the heads up.

For me, unloading open loops -> amazon would be cheaper to resell. though this would’ve been a great option for the OD promo, definitely could come into play later.

Drawing attention to yourself is when you unload too much volume over any one method is a risk I’m not personally willing to take so perhaps this could see some use. E.g dumping $3k through a CVS or on amazon to get those gc’s has a lot of risk as well

Since you tried it, where did they unload the cards at?

“they”…. but this really looks like a one man operation of possibly dubious legality.

Seems like it might be a decent (not great, but decent) option if you’re not a regular MS’er, but are just trying to hit the min spend for a sign up bonus. For example, if my normal organic spend is $1,500/month, I can easily cover a $3k/3month min spend, but it would be a stretch to cover a $5k/3month min spend, like the current Marriott offer. So if I supplement my organic spend with one or two VGCs, but I don’t want to hassle with money orders, I can liquidate this way, and only be out about ~$26 each, but earn that nice sign-up bonus in the process.

Certainly doesn’t seem to make sense for routine, ongoing MS though.

13 states that are not able to transfer to…I sent a message regarding whether my physical adress being from illinois will prevent me from using their service or just the banks location (branches,headquarters etc;)

Another tool in the arsenal, even an albeit expensive tool, is always welcome.

Thanks!

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