Million Mile Madness: Preparing to buy & sell

Background: Early in January, I introduced the idea of challenging myself (and anyone foolish enough to join me) to earn a million points in one month.  So, starting March 1, I’ll do everything I can to earn as many points as I can while keeping within my ethical boundaries.  As a reminder, I don’t expect that a million points will have been credited to my account by March 31st: points often take quite a while to get credited.  Instead, I’ll track all of the points that I expect, and I’ll declare victory if the expected total is over a million.  Oh, and to keep things challenging, I will try to keep my net costs below $1,000.

Previous Million Mile Madness posts include:

 

Buy & Sell

As I reported in the post “Million Mile Madness: Strategy,” one way to earn lots of miles quickly is to buy items through shopping portals to get points and then resell the items.  Recouping your money when buying and selling is not easy: sales tax, shipping costs, and seller costs combine to make it difficult to get all of your money back.  That being said, it is often possible to counter those costs by finding the best sales, by buying and using discounted gift cards, by finding and using the best coupons, etc.  And, even if the end result is a loss of some money, it can be worth it if enough points are earned.

I’ll have to wait until March to see what buy/sell opportunities exist at the time, but I can be proactive by doing some experiments and research now.  Below are my thoughts about some of the best opportunities that are likely to exist in March.  In each section, I point out where experimentation or research is needed.

Kohl’s

For quite a long time now, Kohl’s has offered 10 points per dollar through the Ultimate Rewards Mall.  Past experiments and reader reports have been mixed about whether or not points are awarded when buying Kohl’s gift cards, but they are pretty dependable about awarding points when using gift cards to purchase merchandise.  While it is rare, I have in the past found items on sale at Kohl’s for considerably less than the best price available at Amazon.com.  So, I was able to profit financially while earning points by strategically buying and selling these items. Here is the plan for March:

  • Buy Kohl’s gift cards at ~10% off through a gift card reseller (or earn 10X buying Kohl’s gift cards through the Ultimate Rewards Mall)
  • Find heavily discounted merchandise that can be resold at a profit
  • Watch for a 30% off coupon for Kohl’s charge-card holders (my wife now qualifies).  These are common.
  • Go through the Ultimate Rewards Mall to Kohl’s to get 10 points per dollar. 
  • Pay entirely with gift cards (reader experiments have shown that it’s possible to get the 30% off discount even if you pay 100% with gift cards)
  • Sell items at the best price I can get

Through the above steps, I should be able to earn lots of points for minimal cost, and I may even make a profit.

Experiments needed: I’d like to find out for myself whether or not I get points for buying Kohl’s gift cards.

Sears

Sears usually offers at least 5 points per dollar through some online portals, but has been known to often offer 10 points per dollar (and once offered 15 points per dollar for a couple of days).  With Sears, the following triple dip is possible:

  • Go through an online portal to buy physical gift cards in order to earn points (e-gift cards no longer result in points).  Currently, the Ultimate Rewards Mall is offering 5 points per dollar at Sears.
  • Go through the portal again to buy merchandise and pay with gift cards in order to earn more points.
  • When buying merchandise, earn Sears’ ShopYourWay Rewards points.  Usually you earn the equivalent of 1% back towards future purchases, but often there are promotions in which it is possible to earn more.

Experiments needed: I’ve done the above Sears triple dip many times now, but there are still some variations worth exploring:

  • Can I get portal points by using a Home Improvement gift card to buy a Sears gift card?  If so, I can use a Chase Ink card to get 5 points per dollar at Office Depot for buying the Home Improvement gift card, then I will earn additional points when using that card to buy a Sears gift card.
  • Can I get portal points buying Lands’ End e-gift cards?  If so, that could be a great alternative to buying Sears physical gift cards since they would arrive sooner.  FYI, Lands’ End gift cards work at Sears and Kmart since they are owned by the same company.

 

OfficeMax

By using an American Express business card with OPEN Savings, OfficeMax double dips are quite easy.  When buying items at OfficeMax.com with your Amex business card, Amex gives you back 5% for purchases up to $250, and 10% for purchases over $250 (including gift cards).  So, there are two good tricks here.  One is to buy OfficeMax gift cards and then use them in-store to buy other gift cards.  Some stores allow this, others do not.  Alternatively, I could do the following:

  • Look for great OfficeMax sales / coupons.
  • Go through the best available online portal.  Currently, the Ultimate Rewards Mall is offering 5 points per dollar.
  • Buy over $250 worth of merchandise using an Amex business card to get 10% back. Past experiments have shown that you do not get portal points when buying gift cards.
  • Earn OfficeMax rewards too.
  • Sell items at the best price I can get

 

Staples

There are a number of ways to save and earn points through Staples.  Since Chase Ink cards offer 5 points per dollar at Office Supply stores, it’s always possible to get 5X at Staples.  And, it’s usually possible to double-dip by placing orders through an online portal.  Here are some other opportunities worth watching for:

  • Free after Rebate: Staples frequently has “free after rebate” offers.  The best of these use Staples’ “Easy Rebate” system which is done entirely online without the need to mail anything in.  With some of these deals, it is worth buying things just for the credit card and portal points, regardless of whether you actually want the item purchased.  And, sometimes it is possible to make a profit by reselling the items.
  • e-gift cards:  Staples is unusual in that they sell gift cards to other merchants online and they usually award portal points / cash back for those purchases.  Unfortunately, they started tacking on shipping fees for these gift cards which made the double dip not worth the effort.  However, they also recently began selling e-gift cards without shipping fees.  I bought a $25 Lands’ End e-gift card through TopCashBack from Staples.com and I received the expected cash back (as pending so far) and I will receive 5X from Chase for using my Ink Bold.  This can be a great way to initiate a double dip for purchases to other merchants besides Staples.
  • Coupons / Promotions: Staples often offers terrific coupons and other promotions.  We’ll have to wait and see what they offer in March.
  • Apple Products: Several readers alerted me recently to the news that Staples seems to be gearing up to sell Apple products.  I don’t know if this will happen in time for the March challenge, but if it does it would be very helpful since Apple products tend to resell very well.

Experiments Needed: Replicate my Lands’ End e-gift card purchase experiment with a points-earning shopping portal.

Lowes / Home Depot

A while ago I wrote the post “Extreme savings at Lowes” based on advice from Sam_Goh.  Sam lays out a series of discounts that can be stacked at Lowes or  Home Depot.  By stacking all of these savings and by earning points through an online portal, it should be possible to earn points through buying and selling, with little or no loss.

OpenSky

I never knew about OpenSky until the big promotion in which they offered 150 points per dollar through the MyPoints portal.  When that offer expired, OpenSky continued to offer 50 points per dollar for a few months.  While most of OpenSky’s products are way overpriced, I was able to find a few reasonably priced items during their sales.  I even tested a buy/sell scenario from beginning to end.  I lost a total of $16, but gained 15,000 MyPoints.  That’s an excellent return!  Things were looking even better when I discovered that OpenSky counts as a Home Improvement merchant so I can get almost 7% cash back by paying with my Cash+ card, or I could pay with a Home Improvement card (bought at Office Depot for 5X).  Unfortunately, OpenSky recently disappeared from MyPoints.  They still offer 15% cash back via BeFrugal and TopCashBack and 7X via AAdvantage eShopping, but nothing close to 50X.  I’ll keep an eye on them in March to see if they run any new great promotions.

Miscellaneous Others

Through the Frequent Miler Laboratory, many successful double dip experiments have been recorded.  Whether or not these will be worth pursuing in March will depend on whether any portals offer high bonuses for these merchants and whether these merchants have any great discounts worth taking advantage of.  Here are some of the merchants in which people have succeeded in getting points (or cash back) for both buying gift cards and using them:

  • BestBuy
  • Buy.com
  • Crate & Barrel
  • DrugStore.com (experiences have been mixed here)
  • J-Crew
  • North Face
  • Only Natural Pet
  • PacSun
  • Performance Bike
  • ShoeBuy.com
  • Sony

Note that prior success with any of these double-dips does not guarantee future success.  Plus, just because something works with one portal does not mean it will work with others.  Also, sometimes points are earned for buying a physical or e-gift card, but not for both.

Experiments needed: Try to figure out why some people are successful with a Drugstore.com double dip while many others (including myself) were not.

Reader Advice

What have I missed here?  It wouldn’t surprise me at all if there are many other great opportunities that I’ve either forgotten about or never knew.  Help me out and comment below.  Thanks!

Frequent Miler is on vacation

Posts have been scheduled in advance. See you in September!

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Comments

  1. When paying for a purchase entirely with gift cards through a shopping portal, like what you mentioned with Kohls, will points still post? I thought best practice was to save a small portion for payment by CC?

    • Chris F: Usually you’ll get points regardless of whether a credit card is used, but there are some merchants where points post only if you at least partially use a credit card. From experience I know that Kohl’s and Sears, for example, both give points even if you use 100% gift cards.

      Jesson: That’s a good idea. I’ll consider doing a post or two detailing how to do Fulfillment by Amazon

  2. Do the Kohl’s coupons work if you pay with anything but a Kohl’s card? My wife gets these all the time, but I haven’t paid much attention to them…

  3. What about selling?
    I remember you mention about Amazon fulfillment and I am looking forward to your detailed instructions on that.
    Appreciate that!

  4. Last week I used a Kohl’s 30 percent coupon code, tied to a Kohl’s credit card, to make a purchase through the Ultimate Rewards portal. The coupon code could not be applied, however, when I attempted (several times) to pay for the purchase with three $100 Kohl’s gift cards. So I had to make the purchase with the Kohl’s credit card. The UR points did post (quite quickly). Has anyone in the past week been able to make a Kohl’s purchase using a credit card discount but paying with a gift card?

    • chris / I Can See for Miles: I have received recent reports (but not as recent as this week) of people being able to get the 30% discount and pay with gift cards. The trick, as I understand it, is to put in the Kohls charge card as your credit card form of payment, but then apply enough gift cards to cover the whole order.

  5. The only way I have been able to get the points while applying the 30% coupon at kohls was when I bought more than the gift card balance and used a cc for the rest (although chase states that they won’t give points if a coupon above 15% off is used). You can use giftcards with the 30% off coupon at the kiosks in the store with no problem at all but there is no points for that…Discover card gave me points only for the cc portion when I used them.

  6. Shop Your Way rewards are not 1%, they are 0.1%. I just had 58,000 points worth $58. That being said, they often offer good deals like $10 in points on $30 purchase.

    • darren: You do get 1% back in ShopYourWay Rewards points. If you buy $100 worth of stuff, you’ll get 1000 points which is worth $1 (1% of $100) in future purchases. I think what you meant is that each individual point is only worth .1 cents (as opposed to .1%). That’s true.

  7. I find the Kohls shopping works when you use GCs just a small portion on their CC. Good luck in March. You’ll be busy every day reaching for 1m in 31 days. And I agree with your accounting easier to say you earned X and not wait til they post.

    • Jerry: Thanks, but any points I get now won’t count towards my March totals or expenses
      Ray: Thanks. Often the points take several weeks to show up when buying gift cards
      RomsDeals: Of course I wouldn’t forget those

  8. One data point: I used homeimprovement gift card to buy SEARS physical gift card through UR portal about a week ago. So far no points.

  9. Don’t forget about Cardpool and PlasticJungle. I’m doing several experiments on those right now. Cardpool’s turnaround is about a week. Right now PlasticJungle has been pretty slow and paying me.

  10. when buying Gift cards from Sears pay attention to the seller. Once I bought several gift cards at sears.com, but it was posted as Kmart seller. Had to call to chase to get points posted to account.

    • steve: Interesting idea. I suppose I could do that, but I doubt I will.
      Sam_Goh: Yep!
      Paul: I bought some electronics and toys that were on clearance
      DrewBird: That sounds like something I need to look into. My understanding is that not all vendors have a way to submit a tax exemption form to them. Is there a way to get the sales tax refunded after the fact in those cases?
      anarco: Confusingly, Chase has two similar sounding things: Ultimate Rewards Shopping (what you found) and Ultimate Rewards Mall (what I wrote about). The latter can be found under “Earn Faster” when you log into Ultimate Rewards.

  11. Don’t forget the funding dip – vanilla gift cards @ OD with Chase Ink for 4.2% CB per $500. They register online just fine for online purchases. Using Lowes:

    4.2% CB Vanilla, Stack TCB for Lowes GCs at Cardpool = 7-9% back, then stack 10% mover’s coupon in store.

    Lots of triple quadruple dip opportunities!

  12. “While it is rare, I have in the past found items on sale at Kohl’s for considerably less than the best price available at Amazon.com. So, I was able to profit financially while earning points by strategically buying and selling these items”

    Just curious….what items did you buy and sell from Kohl’s?

  13. Why are you paying sales tax? You are a reseller of goods, and only the end-user should pay sales tax.

    Though it would require some prepwork (exactly what this post is about), you should be able to get a sales tax exemption form from your state Dep’t of Revenue. This will substantially reduce your costs and allow for a better return on your work.

    Since you’ll probably still be reselling at breakeven costs, there won’t be any (financial) profits for your Dep’t of Revenue to tax.

  14. In the Ultimate Rewards site I only see the option of purchasing merchandise with points. Can you buy stuff with a CC or gift card? How do you navigate to see that option?
    Thanks, anarco

  15. ‘Madness’ is about right. One does not simply venture into ecommerce, and certainly not for a few grand in points. It’s one thing if you’re a professional blogger doing proof of concepts for a living, but for everyone else the cost-benefit analysis just doesn’t make sense.

    Selling online requires loads of official paperwork, much of it recurring. If you do business (including Amazon/Ebay) under anything but your full name or surname (laws differs by jurisdiction), you need a DBA. These usually have to be filed, in person, at the appropriate government office and require you to take out an advertisement in a paper of record. Estimated cost: $50-100.

    Most jurisdictions collect sales tax and have very low thresholds for taxable sales. Count on getting a sales tax permit and collecting/remitting sales tax regularly. There is no way to collect sales tax as an ordinary Amazon seller so you’ll have to choose between three unpalatable options: pay out of pocket (assuming you live in a jurisdiction that permits this), build it into the price (making you less competitive), or purchase an Amazon Pro Merchant subscription (even then, Amazon takes a cut of sales tax which you’ll need to make up out of pocket).

    FM’s strategy involves purchasing items at retail, meaning you’ll have to either present a resale certificate or pay sales tax. Most retailers have policies to the effect that dealers and resellers are ineligible for rebates/portal rewards/promotional offers/etc, so a resale certificate may not be the best idea. If you go this route, keep in mind that it is illegal to use an item purchased for retail for any other purpose (business or personal). Keep separate receipts. Deducting the sales tax you originally paid from the sales tax you charge for an item requires immaculate documentation and bookkeeping. Finally, you can simply pay sales tax twice. It’s by far the easiest option, but it makes you less competitive.

    You’ll need a business license particular to retail and those doing business from home will probably require an additional license (many jurisdictions also require an inspection). Estimated cost: $200-2000.

    Unless you’re judgment-proof, you’ll also want a LLC. In order for a LLC to actually limit liability, there should be absolutely no intermingling of personal/business assets (e.g. business address, bank accounts, credit cards, and monies). To do otherwise is to pierce the corporate veil and expose yourself to personal liability. Even after these precautions, there is plenty of precedent to show that LLCs consisting of a single person or a couple are still particularly susceptible to piercing the corporate veil. This is not legal or financial advice, by the way. You’ll want to consult your lawyer and your accountant for that. Estimated cost: $500-2000.

    You’ll want commercial liability insurance, or an endorsement/rider on your existing insurance. If you’re a Pro Merchant, Amazon requires a minimum $1,000,000 policy.

    All of the above will greatly complicate your taxes. You’ll need an EIN (another EIN, for those who took the sole proprietor route to the Ink). Deductible start-up costs have to be amortized over 60 months. You’ll want to deduct the cost basis of merchandise, but tread carefully: if CC and/or portal rewards effectively reduce the cost basis of merchandise, that needs to be reflected in your tax returns. 5% cashback on a $100 item makes your cost basis $95, not $100. There is some dispute as to whether this applies to airline miles, but I’d be very wary of using any rewards attained through business expenditures for personal benefit. A sales tax collecting self-employed small business owner selling gray market items on the internet and claiming lots of deductions is going to be a lightning rod for scrutiny and audits. Operating a business is also going to muddy the waters when it comes to churning business cards and generating 1099s.

    Selling gray market goods is risky. Assuming Amazon/Ebay allow you to sell brand name items at all, you risk IP takedowns and adverse action such as loss of Ebay/Paypal accounts. Some third-party sellers have even been sued for “counterfeiting” and trademark violations.

    Unless you’re a broke student earning minimum wage, it’s hard to see the attraction of such a high effort, low reward endeavor.

  16. FM – I can only speak to how this is done in MN. Here, it is a 5-minute call to the Dep’t of Revenue and a simple filing in April.

    Each retailer varies in its policy, but I’ve only worked with brick-and-mortar stores. You can get reimbursed for sales taxes you’ve paid if, after-the-fact, you come in and show that you resold the items.

    I imagine it may be more challenging to do so with Amazon or online purchases of Kohl’s, but given the volume you’re doing (and the time you have as fulltime blogger), it may be worth looking into. (Do I sense a possible topic for a post?) At least with Kohl’s, you could go to a store and speak to a manager.

  17. Sears sells physical gift cards online for as low as $5 (that made up the bulk of my United mall/Cartera shopping promo). Calif law requires retailers to cash out gift cards with balances under $10. You might want to add a mileage run to Calif in late May. Hit some Starbucks while you’re at it…

  18. Re: buying items and selling on EBay, etc.; is it possible to reverse the purchase / sale transactions to save shipping costs? For example, can you sell an item through EBay and then purchase through Sears online portal and have direct shipped to the EBay buyer?

  19. MikeO: That’s called “drop shipping”. I’ve heard that Ebay doesn’t like that and could ban you if they found out. There are also big risks with doing that such as Sears being out of stock when you go to make your purchase…

  20. @reality chick bla bla bla :)just kidding
    so since his endevour ended with success, i’m assuming that he didn’t have to go through any of that paperwork you mentioned,
    OR he was already an online merchant who had done all the paperwork before (?!)

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