August 19, 2014
Yesterday I showed why I’m excited about Discover cash back (hint: it’s possible to double the value of your cash back by redeeming for car rental certificates). Today I’ll show an example of stacking Discover cash back opportunities towards extreme savings at Sears. Similar techniques are possible at other stores, but some aspects of Sears make it especially noteworthy. Note that you’ll need a Discover It credit card (and a lot of patience) to recreate this magic…
Step 1: Enroll in each quarter’s 5% cashback bonus
It is often possible to earn 5% Discover cash back from Sears through their quarterly 5% categories. Keep in mind that the 5% bonus is limited to $1500 in spend per quarter. Let’s look at the 2014 calendar (with the assumption that future calendar’s will be similar) to see how often it is possible to earn 5% at Sears…
Restaurants & Movies: unfortunately, I doubt there are many options to earn 5% at Sears with this category.
Home Improvement & More: Sears is usually thought of as a Home Improvement store, but in some cases Sears’ purchases don’t automatically qualify. Fortunately, a quick call to Discover customer support should result in a manual adjustment.
Gas Stations: Sears is most definitely not a gas station. That said, it is often possible to buy Home Improvement gift cards at some gas stations and at some convenience stores that are coded as gas stations. By doing so, you’ll earn 5% from your Discover card and then can use the Home Improvement gift card like a Discover credit card at Sears.
Online Shopping & Department Stores: Sears qualifies for 5% both in-store (as a department store) and online.
Step 2: Earn 15% by buying Sears gift cards
The Shop Discover portal often offers 10% cash back when shopping through the portal to Sears.com. Despite terms & conditions that say “Offer not valid on gift certificate purchases,” I’ve found that cash back is earned if you buy physical gift cards (even though they are technically sold and shipped by Kmart) or through reloading an existing gift card. Reloading an existing Sears gift card is the best way to go because the charge is processed by Sears and therefore should work to get 5% on home improvement in the 2nd quarter; and should work for paying with a Home Improvement gift card (Kmart won’t accept Home Improvement gift cards as payment, but Sears will).
The way to get 15% is to earn 5% from the credit card’s quarterly bonus plus 10% from the Shop Discover portal. Examples:
Quarters 2 and 4: Go through Shop Discover to Sears and reload an existing gift card up to $500. The charge will be processed from Sears.com and should qualify for the 5% bonus.
Quarter 3: Use your Discover card to buy a Home Improvement gift card at a gas station. Register your home zip code with the Home Improvement gift card. Then, go through Shop Discover to Sears and reload an existing gift card up to $500. Use the Home Improvement gift card as a Discover credit card to pay for the reload.
Step 3: Earn 10% by rolling gift card credit into Sears’ Shop Your Way Rewards
This part is optional and very hard to scale up. Every now and then, Sears offers products for sale with 100% back in points. An example is shown below of a cell phone charger that was recently selling for $14.99 will $14.99 back in points.
The reason to go for deals like this, even if you don’t really want the item, is that you can go through the Shop Discover portal to get 10% back for the purchase. And, by picking “Free Store Pickup” you can avoid shipping charges. Unfortunately, the only way to avoid sales tax is to have the item shipped to a tax free state. Hopefully, though, the item will be worth at least the cost of sales tax to you. Alternatively, you can most likely resell the item at a yard sale or on EBay for more than the sales tax charged.
Through this process, you would be essentially exchanging gift card credit for Shop Your Way Rewards (SYWR) credit (minus sales tax) and earning extra Discover cash back along the way. The downside to this is that SYWR points are less flexible than gift cards. For example, you cannot use points to buy gift cards in-store at Sears. Also, points expire — sometimes within months of acquisition. Sears’ gift cards never expire.
To find deals like this, I recommend setting an alert on the SlickDeals Hot Deals forum with keywords Sears and SYWR.
Step 4: Earn 10% buying items you want
Now we’re finally up to the step where you’ll buy something you want from Sears. First click through the Shop Discover portal to Sears. Then, find the things you want to buy. As long as there is an “Add to Cart” button, the item should qualify for Shop Discover cash back.
Before buying anything, compare prices at other merchants (use a price comparison tool such as PriceGrabber, for example). If you find a lower price at a merchant with a retail store presence, you can open a chat window while on Sears.com to request a price match. Details of Sears’ price match policy can be found here.
Make sure to pay with Shop Your Way Rewards points and/or gift cards. You can use up to 15 gift cards per order.
Add up the savings
- Buy Sears’ gift card: 15% (5% from credit card + 10% from portal)
- Roll gift card credit into SYWR points: 10% (from portal)
- Use points to buy merchandise: 10% (from portal)
- Total Rebate: 35% Discover Cash Back
- Use for rental car certificates: Up to 70% rebate value
Realistically, most people won’t roll all of their gift card credit into SYWR points since the 100% back in points deals tend to be few and far between. But, even without that step, you can get 25% back in the form of Discover Cashback. If used for half price rental car certificates, it’s possible to get up to 50% value from these rebates!