August 9, 2013
What follows is a hypothetical perpetual money machine. While I’ve successfully tried each individual step, I’ve never put them all together as shown here. Don’t think of this as a recommendation of what you should do, but rather take it as intended: a fun way to think about what is possible…
To get started, you need a Discover card account and a good rewards credit card. You can use a Discover card for both purposes… or not. It doesn’t really matter. You also need to be signed up for Plink. In your Plink account, put Kmart in your Plink Wallet.
Buy gift cards
Use your Discover account to access the ShopDiscover portal. There you can find Sears with a 10% cash back bonus.
Click through and buy a $50 physical Sears gift card to be mailed to your home. Pay with the credit card linked to Plink and you will earn 300 Plink points since the charge looks like it came from Kmart.
Repeat buying $50 gift cards as often as you’d like, but make each one a completely separate purchase to maximize Plink rewards. With each order, you will earn $5 in Discover Rewards and $3 worth of Plink points.
Upgrade Discover Rewards
Instead of redeeming your Discover Rewards for cash, redeem for Lands’ End e-gift cards. These are available for 20% off and work the same as Sears’ gift cards. This way, the value of your Discover Rewards grows by 25% (i.e. $40 becomes $50 in Sears’ credit).
Redeem Plink Points for Walmart gift cards
There are several options for redeeming Plink points, but for the sake of this alchemy, we’ll choose Walmart.
Upgrade Sears (and Lands’ End) gift cards to Visa
Go to Sears. Hunt down the secret gift card rack. Use Sears’ gift cards to buy $100 Visa (or MasterCard) gift cards (each with a $5.95 fee). You have now lost just under 6% of your gift card value, but you’ve turned it into a more useful element.
You could stop here, but for fun let’s keep going…
Buy eBay gift cards at the grocery store
Take those $100 Visa gift cards to a grocery store that offers fuel points. Best bet is to go to one that offers extra fuel points for gift card purchases. At Kroger, for example, they standardly offer 2 fuel points per dollar for gift card purchases and sometimes run promotions for even more. Buy eBay gift cards.
Buy Walmart gift cards
On eBay, $500 Walmart gift cards are often offered for $485 (3% off face value). Use your eBay gift cards to buy them. You will earn 2% back in the form of eBay bucks which can be used towards future purchases of Walmart gift cards.
Upgrade Walmart gift cards to Visa gift cards
Walmart gift cards can be used to buy fixed value Visa gift cards. Online, Walmart offers $200 Visa gift cards for $206.88.
Pay credit card bill
Remember that this chain started with an online purchase of Sears gift cards. So, take those $200 Visa gift cards to Walmart to load your Bluebird card. Use your Bluebird account’s Bill Pay feature to pay off your credit card.
Add it up
Start with a $10,000 investment…
- Buy $10K worth of Sears gift cards, earn $1K Discover Cash and $300 in Plink points.
- Redeem $1K Discover Cash for 25 $50 Lands’ End gift cards (they cost $40 each). You now have $1250 in Lands’ end gift cards and $10K in Sears’ gift cards for a total of $11,250.
- Go to Sears and use $11,230.70 in Sears’ gift cards to buy 106 $100 Visa gift cards (yeah, this will take a while!).
- Redeem $300 in Plink points for $300 in Walmart gift cards.
- Go to Kroger (for example) and use those 106 Visa gift cards to buy $10,600 worth of eBay gift cards. Earn 21,200 fuel points.
- On eBay, buy 21 $500 Walmart gift cards for $10,185. Earn $203.70 in eBay Bucks.
- You now have $10,500 in Walmart gift cards from eBay and $300 from Plink. Use those gift cards to buy 52 $200 Visa gift cards. You now have $10,400 in Visa gift cards
- Use $10,000 worth of Visa gift cards to payoff the original $10K investment.
Here’s what you have left:
- Two $200 Visa gift cards = $400
- Sears gift card value: $19.30
- eBay gift card value: $415
- eBay Bucks: $203.70
- Walmart gift card value: $42.24
Total profit: $1080.24! Plus, don’t forget those 21,200 fuel points (you will need them for all those trips to Sears, Kroger, and Walmart!). And, of course, you would earn rewards from your credit card for $10K worth of spend.
The gift card alchemy shown above is theoretically possible, but it is far from realistic. There are many problems that would crop up in the real world. For example, here are a few:
- ShopDiscover cash back might not post correctly.
- Sears’ fraud department will most likely get concerned when you place so many individual $50 gift card orders!
- Sears is unlikely to have 106 $100 Visa gift cards!
- Even if you could buy over $10K worth of eBay gift cards at a grocery store, they typically come in $25 denominations. Do you really want to rub off all those silver strips and key in all those numbers? I didn’t think so.
- While $500 Walmart gift cards are regularly offered on eBay for $485, they typically do not ship them for several months. Plus, you’re unlikely to find 21 of them!
- At any time, Walmart might stop allowing the use of their gift cards to buy Visa gift cards.
- The ability to use Visa gift cards to load Bluebird accounts may come to an end at any time.
I picked a $10K starting point just as a fun way of showing big profits. In real life, the only way someone could make this work is to do it in much smaller numbers. However, with smaller numbers come smaller profits. Is it worth all of that running around and absorbing all those risks for $100? $50? For most people, probably not. Still, its fun to think of what is possible…