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The Offer
- American Express is offering some Membership Rewards earning cardholders 20% off some gift cards when redeeming Membership Rewards points. Update some people are seeing a bigger discount of 30%.
- 1¢ per point (now 1.25¢ per point): Athleta, Banana Rep, Brooks Bros, Carnival, Pottery Barn, Ralph Laur, Ruth Chris, Sak 5th, Victoria’s Sec, & West Elm
- 0.7¢ per point (now 0.875¢ per point): Walmart, Target,
The Fine Print
- Valid until December 21st, 2017.
- Not all cardholders are displaying the discount
Our Verdict
Unfortunately all the desirable gift cards are the ones that you get less than 1¢ per point. Given you can cash out American Express memebrship points via Charles Schwab for 1.25¢ I can’t see a whole lot of use for this promotion but it might be helpful to some.
Thanks to readers @washingtonwong8 &Â @hareshk4
Hey there Doc, not sure if this slipped your radar but if you use the 1.25 points on ruth chris gift cards and sell them online you can convert MR points to cash at a 1:1. Just did this, best way to use these darn MR Pesos.
Good catch!
To cash out the points from Schwab, do you think we need to pay tax?
Good question
My thoughts are whether you can cash out via Schwab tax free or if you have to invest it and then watch for taxes in investment?
I think that you don’t. Tax is payed when you earn points not when you redeem them. You may have heard of stories of people winning millions of airline miles and then they have to pay actual money as taxes regardless of whether they redeem those miles or not. The only way to avoid having to pay money in that case is to donate those miles.
In this case, you don’t pay taxes when you earn the miles. it is because it is thought of as cashback which you earn by putting spend on your card. This is the reason why bank bonuses are taxable; you get those without actually spending any money.
No. The IRS considers miles earned from spending to be just a rebate and not taxable. It’s the same to them as if you bought a $100 item and got a $10 rebate later as a result- you don’t owe income taxes on the $10 rebate check, you shouldn’t owe taxes on 500 miles you get back. The IRS has generally indicated miles are just not worth their trouble. It’s not impossible a bonus could be treated as income, but this would be setting new precedent.
DoC has a post discussing this. As always, if you need specific tax advice, consult a tax professional.
Walmart, Delta, REI, Hilton and Target are all 1:1 for me
Itunes is 4177 MR for $50
Is there a banner or anything that shows there is a bonus? or do you need to check every gift card to see if it is there?
You can order by cost, and see if there is anything that became worthy of redeeming.
You probably don’t want to buy gift cards on <1c / MR anyway, regardless if it's discounted or not.
Is there any rhyme or reason to how this works? In the past I have seen Home Depot is somewhat frequently rewarded with a bonus but of course since I have been waiting for it to happen it doesn’t. Looking to make a fairly large purchase so even a 1.25 multiplier would be a big savings.
No idea unfortunately
How do you cash out via Charles Scwab? link on DOC
I believe you just get the Schwab Amex Platinum which lets you cash out points to a Schwab account at a 1.25 cents per point rate.
+1
You need the Schwab-branded Platinum. The converted points go into your brokerage account with them (which you need to have open to get the Schwab Plat).
I received nothing and wife received 30% off on most. Redeemed her 100K Platinum Bonus into $1400 Gift Cards and will have the card closed soon. Waiting patiently for mine.
Oooh, interesting.