My Amex gift card strategy

Last year, I signed up for the Amex Gift Card Premium Shipping Plan which offers free Express Next Day shipping on all Amex gift card orders.  Usually, the plan costs $99 per year, but thanks to a tip from a friend, I signed up for free.  Since then, I’ve been able to get free money, in a way, by clicking through cash back portals to buy Amex gift cards.  Cash back rates have hovered at 1.5% for quite a while now, but they regularly spike up to 2% or even 2.25% during one-day specials on sites such as TopCashBack, BeFrugal, and Simply Best Coupons.  Each Amex gift card has a $3.95 fee, but when buying large denomination cards (e.g. $2000), the fee (0.2%) is trivial as a percentage of the card’s total value.

Yesterday, my free enrollment expired:

Amex gift card strategy

How to check your plan status

It isn’t obvious how to check the status of your free shipping plan, but its easy once you know how:

  1. Log into your online Amex account
  2. Scroll to the bottom of the page, and click on “Gift Cards”
  3. Click “My Orders”
  4. Look a the section titled “Shipping Addresses”.  To the right, you’ll see your shipping plan status along with a link to View details.

Amex gift card strategy

Problems with Amex Gift Cards

Amex gift cards are not all sunshine and roses…

  • Portals don’t always track purchases correctly.  In fact, for my last four orders through TopCashBack I’ve had to submit missing cash back claims. Fortunately, each was resolved quickly in my favor.
  • Amex declines orders for no apparent reason.  They’ll send an email with the subject heading “Your order has been declined”.  The usual reason: “We could not verify the information you provided.”  That’s a particularly strange reason when the person ordering had logged into their Amex account and used their free shipping plan to place the order.  For me, that problem has gone away ever since I started using a real EIN as the Tax ID when placing Business Gift Card orders.  You can easily get your own EIN here.
  • Amex occasionally withdraws Amex gift cards from portals.  Often, around the September or October, Amex Gift Cards disappear from portals then appear again a few weeks later, sometimes at a lower cash back rate.
  • Amex sometimes screws up. 
    • Sometimes people receive gift cards that haven’t been properly activated.  Then, when calling Amex, the reps claim that the cards have to be swiped in-person to be activated.  That’s completely wrong.  If this happens to you, keep calling and asking for supervisors until you get someone who knows how to fix the issue.
    • I received an error recently on the website when placing an order, so I tried again.  The second order went through successfully.  The first order didn’t track through the portal, but it did result in cards showing up at my door and my credit card being charged.  It took three separate time consuming calls to get the duplicate order cancelled and my money refunded.
  • Some credit cards charge cash advance fees: This used to commonly happen with Citibank cards, but Citi seems to have fixed the issue.  To be safe, it’s a good idea to decrease your cash advance limit to zero, or at least to less than the amount of your Amex gift card orders. Unfortunately, with some banks (Discover and US Bank, for example) this could result in your order getting declined even if the purchase wouldn’t ultimately result in a cash advance fee.
  • Registering cards for online orders can be a pain.  Some online merchants will try to verify your billing address by comparing to the info registered to your credit card.  This can cause orders placed with Amex gift cards to fail.  A fix is to call Amex to register your address to the gift card first.  This can be extremely time consuming.  I really wish they would add an online option for registering!
  • Some merchants won’t accept Amex gift cards.  Simon Mall employees have been told not to accept Amex gift cards for purchasing Visa gift cards.  At local stores that sell Visa gift cards, success can be hit or miss.  Online, neither GiftCardMall (which has become irrelevant recently since they dropped their max Visa gift card values to $250) nor GiftCards.com accept Amex gift cards.  And, of course, there are places that don’t take American Express at all.
  • $1 holds can make the cards difficult to drain completely.   This is usually just an online purchase problem, but it is a hassle.  One example is with Kiva loans which can be paid for with Amex gift cards.  If you try to make exactly $2000 worth of loans, for example, and pay with a $2000 Amex gift card, the transaction will be declined.  The reason is that PayPal will first verify the card by placing a $1 hold.  This reduces the available balance on the card to $1999 for quite a while (its been a while since I’ve done this, but my admittedly shaky memory tells me that I’ve had to wait up to a week for the hold to clear).  Read more about Kiva here: Kiva: loans, points, and miles.
  • REDbird no longer likes Amex gift cards.  For about 7 months, it was possible to reload REDbird (the Target Prepaid REDcard) with a credit card at Target.  As of May 6th 2015, though, only debit cards or cash can be used.  And, Amex gift cards are not debit cards.

Despite the issues, I’m a fan

In the post “REDbird grounded. Now what?” I described how I would deal with Amex gift cards I had on hand:

While writing this, the UPS guy showed up at my door with a big pile of Amex gift cards that I had ordered on Tuesday when TopCashBack offered 2.25% cash back.  The original plan was to use these to load REDbird at Target.  That plan is now out the window.  Fortunately, I have an easy alternative.  I’m aware of a few stores in my area that will let me buy $500 Visa gift cards and pay with Amex gift cards.  Sure, I’ll incur a fee for each gift card of around 1%, but its well worth it – it simply eats into my 2.25% portal earnings.  It’s a bit more work, but I’ll still be well ahead.

Note that this solution is extremely location sensitive.  There are stores in my town within the same chain that do not allow Amex gift cards as payment.  And, I’ve heard from some readers that wherever they live they’ve been unable to find stores that accept credit card payments at all for gift cards, let alone Amex gift card payments.

So, the cards on hand weren’t a problem for me, but I also declared my intention to stop buying Amex gift cards:

Going forward, rather than buying Amex gift cards, I’ll buy $500 Visa gift cards.  Unlike Amex gift cards, Visa gift cards can be used as debit cards to load REDbird.  Done.

Since then, I’ve changed my mind.  I’ve been fortunate in that almost all Target stores in my area have continued to allow Visa gift card debit loads to REDbird.  So, draining Amex gift cards has been fairly easy: 1) I use Amex gift cards to buy Visa gift cards at local stores; and 2) I use those Visa gift cards to reload REDbird at Target.  Then, of course, I use REDbird’s free bill pay feature to pay bills that can’t usually be paid by credit card.

There are two killer features of Amex gift cards that make it worth it, to me, to add the extra step:

  1. I can meet minimum spend requirements instantly and from home.  This is huge to me.  When I sign up for a new credit card that has a spend requirement for its signup bonus, I can simply click through a portal to Amex gift cards and buy as many Amex gift cards as are needed to meet the spend requirement.  Done!  Sure, I then have a longer term issue of dealing with the Amex cards, but there is no longer any fear of missing out on the signup bonus.
  2. Portal rewards wipe out fees associated with manufacturing spend.  Buying Visa gift cards involves fees.  Liquidating Visa gift cards sometimes involves fees.  Cash back earned from purchasing Amex gift cards via a portal is usually more than enough to cover those fees and probably the cost of gas too (for driving around from store to store).

Maybe not for you?

My ability to liquidate Amex gift cards is extremely location sensitive.  There are stores in my town within the same chain that do not allow Amex gift cards as payment.  And, I’ve heard from some readers that wherever they live they’ve been unable to find stores that accept credit card payments at all for gift cards, let alone Amex gift card payments.  And, even if you can turn Amex gift cards into debit gift cards, you may live in an area where those are hard to use too.

As a general rule, I’d recommend that you make sure that you have at least two different ways to drain gift cards before investing too heavily in them.  Options disappear all the time.  If you can’t afford to be stuck holding the cards long term then don’t buy them.

Should I renew premium shipping?

Now that my premium shipping plan has ended, I need to make a decision.  Should I pay $99 to renew the premium shipping plan?

Amex gift card strategy

Without the plan, I’d have to pay $8.95 per order for shipping.  If I place 11 or fewer orders in the next 12 months, I’d be better off paying separately each time.  If I place 12 or more orders, then I’m better off with the shipping plan.  My guess is that I will place 12 or more orders, so I should go with premium shipping.  However, there are a few risks:

  • Amex gift cards may disappear from portals as they’ve done in the past. And, there would be no guarantee that they would return.
  • Portal rates on Amex gift cards may drop to rates that are too low to be worth the effort.
  • Options for liquidating Amex gift cards may dry up.
  • A free shipping code might surface again.

All of the above are reasons to pay for shipping per order, for now, rather than paying all at once.  On the other hand, I think that the risks are low and savings would add up if I buy gift cards often enough.  So, my plan is to wait until the next time I want to buy gift cards.  I’ll sign up then for premium shipping as part of my next order.

Questions about Amex gift cards?

Please see: The complete guide to Amex gift cards.

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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  1. […] A number of online portals offer cash back or miles when purchasing American Express gift cards. The idea of buying American Express gift cards just to earn miles or cash back may sound boring to some, but to me it is fantastic. It’s a great opportunity to run up spend on credit cards to meet minimum spend requirements, hit big spend thresholds, or just to earn regular everyday rewards.  For more, please see: Amex Gift Card Strategy. […]

Comments

  1. Have you ever used the personalized American Express gift cards so that there is a name on the card? Does that make it more accepted at the chains that let you buy Visa gift cards?

    • Yes I usually do order personalized cards just in case anyone checks the name on the card, but at the places I’ve used them no one has ever checked. It’s important to note that even the personalized cards very clearly say Gift Card on them

    • @Oren – As another data point, I would suggest always having them personalized. At stores I visit, it’s about 50/50 on being asked for my license to compare to the name on the card. And FM, interestingly, in those instances I’ve never had them ask about the fact the cards say “gift card” on them. They just seem to be satisfied that they have my name printed on them.

      • I actually had this just happen at Walmart a few days ago. I had a $100 Visa Reward Card with my name on it. They rejected it as they said they don’t allow gift cards or rewards cards. They didn’t care that my name was on it.

      • Funny coincidence. Today I went to one of my usual CVS stores and there was a new guy working the register. He asked how I was going to pay for my Visa cards. I said “credit”. Then he asked to see it “just to make sure its not a gift card or anything”. I handed over the Amex gift card that had my name on it. He looked it over and said “OK”. He apparently didn’t notice the words “gift card” all over the place. Lucky I had the personalized card with me!

        • As another data point, I generally don’t personalize AGC’s. I do my buying at a Kroger chain where they have a $2k/day limit and enter driver’s license and ask to see the card 9/10 times. I’ve never been turned away, so I’d guess they only want to verify that there isn’t someone else’s name on it.

  2. Excellent strategy. But, as you said, the shopping portals are infuriating. Either they don’t track or AMEX declines my order when it actually goes through.
    Either way, I am now 0-4 of late.
    Looks like it’s on to $500 Visas at the grocery store…

  3. How do you get 2.25% cashback. I normally see only 1.5% only for the consumer gift card and not sure if I can apply for business gift cards ?

  4. This has been a great resource for the past 8 months.
    Then 3 declines in short order. Calls to amex were nearly
    Worthless.. They and I are in “time out” for now…

  5. Regarding shipping fees, whenever my wife and I receive a new amex cc we always set up different logins. This allows us the free 90 day trial multiple times. I can purchase all amex gc’s (for both my wife and I) under one amex login, so I only need 4 new amex cc’s per year between my wife and I to get free shipping for a year. It makes the amex offer sign ups harder, but saves in shipping.

      • Michelle: The Amex Offers deal is a credit you get on top of the credit card rewards.
        1. Enroll your Amex credit card to the offer
        2. Use that Amex card to pay for Amex gift cards
        3. You’ll get both the $10 credit and whatever credit card rewards your Amex card offers.

  6. worked for over a year on various cards, now all getting declined when purchasing business GC’s, even though I have a real business and an EIN…. Declined on Barclay, INK, and even on my SPG business card!
    So infuriating, what cant they verify? I logged in for god sakes, and I used their business card!!! ARRRRGGGHHH.. Even took the extra step of copy and pasting my address from my credit card and putting it in to make sure everything matches.

    Strangely enough my IHG card went through, but that was just me testing different cards to see if maybe it was the card that was the problem.

  7. “I received an error recently on the website when placing an order, so I tried again. The second order went through successfully. The first order didn’t track through the portal, but it did result in cards showing up at my door and my credit card being charged.”

    I am in the same boat right now, although I haven’t checked the balances on the cards to make sure they all have funds available. I think I will go the route of dealing with TopCashback rather than Amex. I would have thought you’d avoid a call to Amex for fear of a review.

    • I don’t see any reason to fear review. Amex publicly sells these Amex gift cards. They want people to buy them — that’s why they offer cash back rebates through portals.

      In my case, the first purchase was not tracked by SimplyBestCoupons so I didn’t want it. Plus, I didn’t want the extra charges to go the same credit card. I had met min spend with just one purchase.

      • I’ve had this same issue twice in a row recently when ordering Amex GC’s. Each time I got an error at the final screen, but both times the GC had in fact been ordered and my credit card charged. If you get the error, immediately check your credit card online to see if the charge is pending. If it is, the order did go through and will be processed as usual. Unfortunately, the portal cash will not track automatically due to the error and you’ll have to ask for a manual credit. Had to do it each time with TopCashBack — it’s a pain but it did end up getting credited properly.

  8. FMF,

    If you sign up for an EIN through that link you provided wouldn’t you be required to file taxes as a corporation? If you own a business it makes sense but if not, it seems too risky to be worth it.

    • Don’t use that link, there are a few reports of them being scammers. In any case, never provide your SSN to a web site not related to the government or your financial institutions. The IRS has an electronic form on their site. I just applied for an EIN for my trust the other day and it says I need to file a 1041 next year but I will just put down 0 for income. I think it might just be for trusts though.

      • Thanks for letting me know about them asking for a SSN. I never would have given it even if I was interested in signing up though. If you put $0 for your income aren’t you worried the IRS will audit you and see that you are purchasing business gc with that EIN?

  9. I read you can ask topcashback to match another portal’s rate. Is it as easy as shooting tcb an email on the day of the rate increase at another portal? Or is it more involved, like sending in screen shot of the other portal’s rate and have a membership number with the othe portal, etc. thanks.

  10. I’ve recently blogged about this as well. Amex Gift Cards are, IMHO, the single best gateway for manufactured spending. Not quite your perfect PPM, Greg, but pretty close.

  11. Normally, site like Top Cash Back states that promo codes invalidates cash back; however, I noticed TCB has 3 codes on their site (e.g. FPDAD, expires 6/21) that claims the fee ($3.95) will be waived and in addition, you’ll get cash back. Any thought on whether this will work? Is it worth the risk?

    • These codes were available with cash back last Friday as well, and then they disappeared the next day. I’m glad to see them back. I placed an order on Friday and used FPDAD, and it tracked with TCB. We’ll see if they actually pay me, but I took a screenshot as proof of their offer. Seeing the offer again today makes me think that it’s not an accident.

  12. I’ve seen many blogs write “just use your SSN” as the EIN for things such as applying for a Chase Ink. Isn’t that considered fraud if you don’t actually have a business? I’ve also seen many people mention buying personal items (such as Visa gc) with the business card. Isn’t that against the TOS from Chase? It always surprises me that so many people are willing to take a risk on something that could potentially lead to jail (the former, not the latter). If I’m wrong can someone please explain this as I wouldn’t mind getting access to all of these perks too.

    • My assumption has been that almost everyone has some form of legitimate business even if they don’t realize it. It could be as simple as consulting, selling used items (on EBay, for example), renting out property, or even writing a blog and putting ads on the page. I don’t know what legal issues, if any, there would be to use an EIN if you don’t really have a business, but I wouldn’t advise trying.

  13. How to hack “Amex declines orders for no apparent reason”?
    I want to use this method for signup spending on my United card. Tried multiple times, and they all got declined, even when I called chase to approve this transaction. My other cards work out fine. Any suggestions? Thank you.

  14. What is the best way to track that you have received all your orders? The card number does not match the order number. I have tried numerous methods but still seem like I am missing cards. Do I call amex and ask if all cards have been cashed? I called Simon gc and found 1500 that hadn’t been cashed. I thought I was missing 1 card. Any suggestions would be appreciated.

    • The only thing I’ve found matching for tracking is that the UPS tracking number is recorded in your AGC order online and also on the delivery envelope (obviously).
      However I’ve also had 2 separate AGC orders arrive in same envelope (both orders had same UPS tracking recorded correctly), so you need to do accounting when opening the delivery envelopes.

  15. You can actually get free shipping for a year again by using the code FPDAD or FPGRAD and ordering a personalized card. The new order interface disallows the free shipping code when you order the premium shipping and apply a coupon code. However, personalized cards are still under the “old” interface.

  16. Am I missing something or are you guys failing to count the opportunity cost of cashing out the amex cards. When you go to a store and buy a 500 vgc with an amex GC, you are foregoing the opportunity of earning rewards on that purchase. You should be getting 5x on that, so that’s 2500 points you ARE NOT EARNING. valuations vary, but that’s $50 for me.

    • I am certainly missing how you earn 5x points on $500 vgc’s. If there are currently available credit cards that provide uncapped 5x points at stores that sell them, please enlighten us. Otherwise, this method is solid. Using FM’s frequent alerts to 2.25% cash back portals on Amex gift cards and your 2% point valuation, that’s 4.25%. What are we missing?

  17. Newbie here!

    Ok I just got a Discover it miles card. $5,000 total limit but only has a $500 cash advance limit. It has 1.5% doubled 3% for first year. & I have a Bluebird card in transit. I have quite a bit of cash on hand.

    Are these the steps?
    1. I need an Amex account to buy the gift cards.
    2. Use the portal TCB to go to Amex to buy the gift cards for 2% back and 3% on my Discover?
    3. I get the Amex Gift card and go to a local retailer like Krogers and use the Amex card to buy a Visa Gift Card.
    4. I set up a pin on the Visa Gift card. Then I take the Visa Gift Card to Walmart and use it to load my Bluebird account.

    So if my Discover card will only allow me $500 – the number look like this:
    $500 Amex X 5% (2%TCB+3% discover) = $25 cash in

    Cash out =
    Amex $8.95 shipping + $3.95 Fee = $13.90
    $500 X 1% visa gift card fee = $5
    $18.90 in fees.

    $25-$18.90 = $6.10. Seems like a trip to Walmart a trip to Krogers for $6. Hmmm What am I missing?

    Maybe only worth it for sign up bonuses like Barclays 40,000 miles for $3,000 in 3 months?

    • 1. I need an Amex account to buy the gift cards.
      Not really. You can buy Amex gift cards without an Amex account.

      2. Use the portal TCB to go to Amex to buy the gift cards for 2% back and 3% on my Discover?
      Only when TCB is offering 2%. The usual rate is 1.5%.

      3. I get the Amex Gift card and go to a local retailer like Krogers and use the Amex card to buy a Visa Gift Card.
      Yep

      4. I set up a pin on the Visa Gift card. Then I take the Visa Gift Card to Walmart and use it to load my Bluebird account.
      Yep. Actually, the PIN will most likely be in the packaging.

      Overall, I’d say its not worth it unless you buy $2,000 Amex gift cards.

  18. I’ve never had an error when placing an AGC order and TCB has always tracked automatically, after I started following these 2 rules:
    1. Use an incognito window for every AGC order. This adds extra step of logging into cashback portal and AmEx account for every order.
    2. You must login to AmEx account BEFORE clicking through the cb portal. This can be a separate tab in the same incognito window of browser.
    Before starting your next consecutive order, kill the incognito window and start afresh.

  19. So if im looking at this right. 2000 amex giftcard @ 1.5% is 30-3.95, giving me 26.05 cash back. Then I go to my local 7-11 (Assuming i can use them) and buy 4 x 500 visa vanillas to load redbird @ 4×4.95. So in total I will make 6.25 to liquidate the Amex? This of course doesnt include the shipping as I would have a 3 month free trial @ amex.

    • No. You are leaving out the cash back portal bonus (tcb frequently at 2.25%) and shorting yourself on the rewards %. There are multiple cash back and rewards cards giving 2% or more. So $2000 Amex gc x 4.25% is $85 minus $4 shipping and $20 to liquidate at 7-11 and you’re clearing more than $60 per Amex card. And most of us buy more than one:)

        • I was just using Jason’s example. I don’t have any 7-11’s near me. I use cvs or Walgreens (buy vanilla gift cards and they load to redbird)

        • So then to liquidate amex, Walgreens has been sucessful? I’d assume you buy 4 vnc per 2000 amex 3x 500 and 1×480?

        • Or I just put $495 on each card. It makes the total for four cards $1999.80. Then you don’t need a second form of payment or have to remember which of your cards are $500 vs. $480

        • would the codes i see for waived amex gc fees negate the cashback from befrugal or whatever?

      • Wow I feel bad for the people who think they made money off this. I bet it ran that smooth every time and max points were everyday right??? Not just once or twice a month?

        Amex cut it to $200 bc all of these people were going broke.

  20. I am totally new to this whole entire gift card deal so this would be my FIRST Time. I am currently being offered a $10 rebate for a $200 purchase on two of my different AMEX cards.(green and a Starwood). It says offer only valid through americanexpress.com/gift. When I go to this portal it says a $200 card will cost be $3.95. So if I buy a card for 203.95-10=193.95 and I would be able to use a $200 card for a net profit to me of $6.05 and earn miles of the one AMEX card I use. Am I reading all of this right? Am I instead suppose to get though one of these rebate portals instead? HELP!!

    Is it like the other reply question below?

    FrequentMiler says:
    June 18, 2015 at 10:16 am
    Michelle: The Amex Offers deal is a credit you get on top of the credit card rewards.
    1. Enroll your Amex credit card to the offer
    2. Use that Amex card to pay for Amex gift cards
    3. You’ll get both the $10 credit and whatever credit card rewards your Amex card offers.
    Reply

  21. I decided NOT to do it. It was a forced delivery fee of 8.95 and a $3+ processing charge. There was someplace I think I saw a code to have the processing fee waived so either I would lose $2+ on the whole thing or make $1.00. Again, the stupidest thing I’ve ever seen! If I’m wrong please let me know.

    Thanks

    • I use the Amex gift cards to buy Visa gift cards, then I use the Visa gift cards as debit cards to load Redbird at Target. Then, I use Redbird to pay bills that can’t usually be paid by credit card.

      • Hi, I am completely new to this, What if i don’t have any bills to pay?can i pay the amount back to my credit card using Red Bird. Also can you tell me if i can buy the gift cards with Citi AAdvantage Platinum Select MasterCard? If not what are my options to Make minimum spend to get Rewards with out getting a cash advance mark on my card

  22. Hi, I’m new to all this. I think I read on another post that cashback is only offered on AGC that are $200 or less. This now negates the above strategy, right?

  23. Hi FrequentMiler
    Awesome information here thanks. I recently took out the Amex business card but need to spend $10,000 in the first 3 months (for the 75,000 reward points), but obviously can’t spend that much. My question is, as I am an amex customer looking to hit $10,000 spend, would I be best buying the highest denomiation amex gift card ($3,000) or 6x $500. They are currently running a fee free special I believe until end of month. Plus I have the free shipping.

    • Since Amex has stopped paying out through portals for denominations above $200, Amex gift cards are no longer a good way to earn cash back. However, if you simply need to “time shift” your spend, it can still be worthwhile. I would recommend buying the highest denominations you can afford to float. That way, you can earn the signup bonus and take your time spending down those gift cards.

  24. Hello – Very informative article. I was redirecting my attention to “working” my Amex rewards. I was curious to know if you have strategized the ‘points for gift card purchase’ offers. I have verified which monthly purchases I can make with Amex, and seems that it would be pretty lucrative regarding points earned. Earning 20,000 points for a $100 gift cards seems questionable to me. But I am a reward newbie.

    • Unfortunately, since this was written, Amex stopped paying out through portals for Amex gift cards with denominations above $200. This made the cards too difficult to deal with, in my opinion. So, I don’t recommend this approach anymore.

  25. I recently applied for the AMEX Business Card. I was thinking of purchasing the AMEX gift cards to meet the minimum spending. However, the terms and condition states: “Eligible purchases do NOT include fees or interest charges, balance transfers, cash advances, purchases of travelers checks, purchases or reloading of prepaid cards, or purchases of other cash equivalents.” Are AMEX gift cards consider prepaid cards and cash equivalents?

    • Well, yes, Amex gift cards are considered prepaid cards, but in my experience Amex doesn’t enforce those terms. I’ve often bought gift cards in order to meet minimum spend requirements with Amex credit and charge cards and I’ve never had any problems.

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