The best way to Ink money (revised)

I’ve reported in the past that those with Chase Ink cards (the ones that give 5 points per dollar for office supplies) can profit from buying Visa gift cards at office supply stores. Recently I analyzed the difference between buying these gift cards online vs. in-store and I declared that online was better.  By shopping online through the Ultimate Rewards Mall to Staples, it is possible to earn even more points than the 5X given automatically.  You can read the original post here: “The best way to Ink money”.  Recently, though, the Ultimate Rewards Mall dropped the Staples bonus rate from 4X to 2X (or 3X for some lucky people) so it’s time to re-evaluate.

With each of the options for buying Visa gift cards, the value of paying the gift card fee in order to get extra points depends upon how highly you value those points.  Some people like to conservatively value Ultimate Rewards points at only 1 cent each since you can withdraw points from Chase as cash at exactly that rate.  Others (like me) use the Fair Trading Price of 1.31 cents each.  This is an estimate of how much it costs to buy Ultimate Rewards Points via credit card spend.  Still others prefer to look at the redemption value of Ultimate Rewards points.  Depending upon how the points are used, it is common to get at least 2 cents per point value from redemptions (using either an Ink Bold or Sapphire Preferred account – both of which have better redemption options than other Ultimate Rewards cards).

Analysis Table

The table shown here estimates the “X” for each option and each point value.  For example, If you have the Staples 3X option in the Ultimate Rewards Mall and you value points at 1.31 cents each, this table shows that buying $100 Visa gift cards online will give you the equivalent of 3.93X (points per dollar) for spend that you make with that Visa gift card.  In other words, while you start with 8 points per dollar in that scenario, just over 4 points per dollar are used to “pay you back” for the card’s $5.95 fee so you are left with 3.93X overall.

Gift Card Value

Fee

Points Earned

Value points 1 cent

Value points 1.31 cents

Value points 2 cents

Buy online through UR Mall 2X

$100

$5.95

742

1.47X

2.87X

4.44X

Buy online through UR Mall 3X

$100

$5.95

848

2.53X

3.93X

5.50X

Buy in-store

$200

$6.95

1035

1.70X

2.52X

3.44X

 

So, which approach is better?

In the table shown above, you can see that buying online is still the best bet in almost all cases.  The main exception is if you value points at only 1 cent and you only have the option of Staples’ 2X in the Ultimate Rewards Mall.  In that case, buying in store is better.

Still a great deal

The lowest multiple on the entire chart is 1.47X which is pretty good for ordinary purchases that would usually get you only 1X!  However, I think the 1.31 cent value is pretty conservative itself and with that value you get at least 2.5X regardless of which approach you use!

If you do not have a Chase Ink card, you can read more about those and other cards on the Preparing for Miles page which can be found as a menu item at the top of every page on the Frequent Miler blog.  Also, there is currently a public offer for 60,000 bonus points upon signup for the Ink Bold!  You can find details in this FlyerTalk thread. (60K deal has already been revoked).


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About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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Comments

  1. What about going through other portals? Although not UR points, but still a good amount of cash back. Lately some are reporting staples giving 5% back through the uPromise shopping portal. with the ink card, that makes it a 10% back at a 1cent per point ratio. and ~ 13% back if you rate 5% of the UR point as 1.31 points?

    • Mow: I don’t have experience buying gift cards at Staples via other portals. There’s a chance that you won’t get any cash back. It’s worth trying that with a small gift card purchase before going in big. I’ll add this experiment to the Lab page.

  2. I agree with your recommendations and calcs and I conservatively use the actual cash out value (that’s why I prefer URs to others where the lack of this option devalues them). In any case, at 1 cpp, your actual points are cash, so 1.47x is a real 1.47% return on your spend. At 1.31 cpp valuation, the perceived cash value to you is 2.87*1.31 = $.0375 or 3.75% return on your spending, and 8.88% return at 2X value. If that is how you value them, that is quite a return and justifies (some of) the time we scheme.

  3. FM did you get a chance to read the 60k Ink Bold offer while it was up? Down in the details it cut the bonus category rewards from 5 pts/$ to 4 pts/$. Good for the churners (bigger bonus, while it lasted) but not so good for those spending or the long term users. Found that interesting…

  4. @Steelsnow – The category bonus on the 60k offer was no different than the standard 50k offer. Chase words it to say that you “earn 1 base point” plus “earn an additional 4 points” for the bonus category purchases. It still adds up to 5 points per dollar. They do the same thing for the Chase Freedom bonus categories. You get 1 base point plus 4 bonus points. It makes it easier for them to enforce the bonus caps per quarter ($1500 Freedom) or year ($50k Bold).

  5. Miler,

    Excellent post. I value at 1 cpm to be conservative and only have 2X. So, I moved to in person $200 gift cards.

    By the way, I am about $3000 into your ebay/walmart scheme. I already think I have someone trying to “screw me,” but I am going to try to use the Ebay resolution center. In the case in question, I bought a $500 gift card for $485. Seller says it won’t ship until 30 business days and arrive in 32-33 business days. Quite interestingly, this is about exactly when your 45 day window to file a complaint with ebay would lapse. Once it has been a full month, I plan to file a pre-emptive claim with ebay. The seller in question, who had a nearly spotless record when I bought from him, clearly went on a tear of scamming folks and now has one negative feedback after another. I am hoping that bodes well for me in dealing with Ebay. I suspect Ebay will end up eating it, but still have my fingers crossed. Seller has not returned any of my messages.

    Otherwise, going well. Finding very few $485 offers, but if I can get my scammed money back, the Ebay bucks things makes this revenue positive if anything.

  6. Should only bonus points (4x, instead of 5x) be considered?

    Since you will get 1x base point anyway when charge to Ink card. Now the opportunity of getting that 1x base point is gone when using GC instead of Ink card. Does this make sense?

  7. @ Elizabeth & HikerT: Thanks for the clarification, I read through it too quickly trying to pick out the details and forgot to take the ‘extra point’ for card spend as part of the offer.

  8. Good news on the Visa Gift Cards!

    I just bought a $500 Visa Gift Card at my local Office Depot, and there was just a $4.95 processing charge. It is a new offering, and you can get the Visa Gift Card for any value between $20 and $500 with that flat $4.95 fee. Needless to say, since the same fee applies to any amount up to $500, you get the most value for $500.

    Considering that the $4.95 fee is the one that also corresponds to the regular $50 card (and $5.95 for $100 card and $6.95 for the $200 card), this is a real bargain.

    I’m sure the FrequentMiler will take care of the complex math, comparisons, and wild scenarios and schemes that have made this blog legendary, but in the meantime I can tell you this: if you use your Ink Bold in the store for the $500 card, then you are getting 2,525 UR points for just $4.95. Less than 0.2 cents per point! Sweet! (Now that I did the math, I may have to go out and buy some more of those!)

    • Steve K: Thanks for posting this amazing deal. Another reader also informed me about this via email. I’ll do some research and post something on Monday.

      THEsocalledfan: Thanks for the update! That’s very cool that you’ve amassed 25K points so quickly! But, don’t let anyone persuade you that I’m not off my rocker! 🙂

  9. Darn it; no Office Depot where I live!!!!! Any way to do this on their web site? I would love that with the 10X…….

    On another note, I just wanted to post about my success using this “Inking” technique. This past month, I was able to generate over 25,000 Ultimate Rewards Points using this technique (and a couple other small ones like FAR and telecom). I spent $82 that I would have NOT spent in the process. Those 25,000 point are worth one coach ticket on United. It is easy to see how this can “pile up.” I at first thought this Miler was off his rocker, and now I think he is a genious. So, if anyone see’s me paying with Visa gift cards, now you know why.

  10. Thanks for all the awesome info. I’ve been trying to figure this out on FT, but can’t seem to find anything definitive. Do you know if I can use my Amex gold bz to buy cards in store and then use cards on WP or CS to pay mortgage?

    • econjon: the problem with using ChargeSmart to do this is that they charge too big of a fee for small payments (e.g. $200 at a time) to be worth it. I don’t know what WP is. Can you elaborate?

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