The Conundrum – Buying Mastercard & Visa Gift Cards at Staples
Yesterday Ed over at Pizza in Motion relayed a story from one of his readers about the possibility of Staples no longer accepting credit cards for the purchase of Visa or Mastercard gift cards. I addressed the rumor yesterday, but I found another thing of interest in his post that I wanted to follow up on.
In his post, Ed said, “It’s worth noting that it’s not really a good value to buy Visa and Mastercard gift cards with a credit card at office supply stores. The fee charged to purchase them usually mitigates the value of the miles.”
Most people who have been around for awhile have already done the math on buying gift cards at Staples with their Chase Ink cards, however it occured to me that beginners may not have.
With the recent disappearances of a lot of what I call “low hanging fruit” opportunities, a lot of newer people are probably looking at this as an option. Since the value of any deal is highly personal, I figured I would show you why I believe it is a phenomenal deal.
I don’t fault Ed for his opinion, since as I said, everyone is different. What is a good deal for me is not necessarily a good deal for someone else.
The Simple Math
So lets take a look at some of the basic math of buying $200 Visa or Mastercard gift cards at Staples with a Chase Ink Visa card. After paying the $6.95 fee and receiving a 1% rebate with Visa Savings Edge, your out of pocket cost is $204.88 for a card that is worth $200. The purchase of this card will net you 1035 points.
In the end, you have 1035 points for $4.88. Essentially you just purchased Chase Ultimate Rewards points for a little less than 1/2 cent each ($.0047). Considering most people value these points at around 2 cents each, that is a really good deal if you have a good use for the points.
The No Money Option
Before I move on to this next option, I want to mention that I do not do it myself. I normally follow the math as outlined above as it makes the most sense to me. With that said, there is another way you could go about this. Lets take a look in more detail.
What if you didn’t want to spend $4.88 out of pocket? In that case you could use 488 of the points earned to pay yourself back at $.01 each. (Chase allows you to redeem UR points at $.01 each for a statement credit.) After bringing your cash out of pocket down to $0, you would still have 547 Ultimate Rewards. These points come at no monetary cost to you, but your time still has value.
So lets say you and a spouse both have Bluebird/Serve cards and can load $10,000 per month. After paying yourself back, you would net 27,350 points which are worth $547. Are those $547 in points worth it for the time it takes to buy and liquidate the gift cards?
Each trip to Staples takes me about 30 minutes total so I will use that as a benchmark. Lets say you buy $2,000 in each trip and thus make five trips per month, taking 150 minutes in total.
In my experience each gift card takes about 2 minutes to liquidate to Bluebird/Serve on average. That would mean another 100 minutes to liquidate the 50 $200 cards.
Considering Bluebird/Serve card load limits are $2,500 per day it would take two trips to Walmart to load everything. If it takes 10 minutes each way to Walmart. That is 40 minutes total.
So time wise we have 150 minutes for Staples, 40 minutes for Walmart driving and 100 minutes for gift card loading which equates to just under 5 hours. If we round up to five hours, the haul comes out to roughly $109 per hour. Not bad.
Should You Do This
I am perfectly happy paying the $4.88 and keeping the extra points, however this is a completely free (money wise) way to earn very valuable points. In the scenario mentioned above, a couple could earn 328,200 Ultimate Rewards points for 60 hours worth of work over the course of a year. That is pretty darn good.
The main purpose of this post is to demonstrate how to think about these things a different way. While I don’t pay myself back at $.01 each, I think it is a perfectly legitimate way to ensure you aren’t spending any money to obtain these points.
I am completely aware that the time this deal takes is reliant on how far Staples and Walmart are from your home, however that is a calculation you can do yourself. Additionally, some people may not value Ultimate Rewards points so high, so that can be a personal adjustment as well.
Whether or not you pay yourself back or go with the more common way of going about this deal, I fail to see how it isn’t a good deal. Ultimate Rewards points are flexible and valuable and I can never seem to have enough of them. Sure this deal requires people get a Chase Ink card, but it is already one of the best cards out there and one that I highly recommend.
Hopefully this showed you another way to think about this deal. It is this analytical way of thinking that leads towards a better understanding of advanced techniques in my opinion.
So what do you think? Is it a good deal to buy Visa or Mastercard gift cards at Staples? Am I way off base with this post? Are you tired of seeing me write about Staples? (I will probably take a break from it for awhile.) Let me know!