A fantabulous but risky quintuple dip

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This week, the stars have aligned to potentially make your holiday shopping much cheaper.  Let’s look at a bunch of deals that stack together.

How to stack these dealsquintuple dip

Assuming you have a Discover It card enrolled in the Double Cash Back offer and you haven’t yet maxed out your $1500 of 5% eligible spend for this quarter, then:

  1. Find the best current portal for shopping at Sears via CashBackMonitor.  Despite its name, CashBackMonitor lists both cash back and points earning portals.
  2. Go through your selected portal to Sears to buy e-gift cards.  Buy a $50 or $100 e-gift card for yourself.  If necessary, call 1-888-396-5299 to expedite the order once you receive an email stating that your order is being reviewed.  It may take a while, but you should receive both a $10 or $20 promo gift card and portal rewards from this transaction.  If you want more than $100 worth, repeat the entire process starting with the portal.
  3. Pay for the gift cards mentioned above with your Discover It card in order to get the 5% category bonus.  When selecting e-gift cards, I recommend picking the blue Sears’ design since there have been some reports of e-gift cards with Kmart designs being sold by Kmart.  If your credit card transaction shows kmart.com rather than sears.com, you won’t earn the Discover 5% category bonus.
  4. Go through a portal to Sears or Kmart to use your gift cards to buy 100% back in SYW points items.  Apply coupons that offer additional SYW rewards.  If all goes well, you’ll earn portal rewards and at least 100% back in SYW Rewards points (often you’ll end up with even more than the gift card value you started with).  This step is contingent upon availability of 100% back in rewards items.  Please see “Roll gift cards into points for triple rewards” for complete details about this step.
  5. Go through a portal to Sears or Kmart to use your SYW points to buy merchandise.  You cannot buy gift cards with points.  You can buy items from Lands End with points, but you won’t earn portal rewards for that transaction.  When paying with SYW Rewards points, if you have a choice of coupons offering a discount or additional points, always choose the coupons offering a discount since you will not earn points on the part of the order paid for with points.

An example with a “safe” portal

At the time of this writing, Splender is offering 7% cash back at Sears and Kmart.  While its true that the terms state “Not eligible on purchase of gift cards as of 11/16/2015” and “Not eligible on online purchase made using Sears Shop Your Way points,” my recent tests have proven otherwise.  Because of the portal’s terms, there is risk in using this portal for those purchases, but it is less risky than Discover Deals (see “risky” portal, below).  The big risk here is the possibility of your purchases not tracking correctly from the portal.  If that happens, you are unlikely to get help from Splender (or any other portal with similar terms) since the terms prohibit getting cash back for buying gift cards or spending Shop Your Way points.

Risks aside, if we assume that all goes well with a portal offering 7% cash back, we can expect the following rewards for a total of $100 spend:

  • Spend $100 for $120 in gift card credit.
    • Pay with Discover It card to get 5% cash back (which is eventually doubled to 10%) = 10% of $100 = $10
    • 7% portal rewards = $7
  • Buy $120 worth of items, pay with your gift cards, and get 100% back in SYW Rewards points:
    • 7% portal rewards = 7% of $120 = $8.40
  • Buy $120 worth of merchandise, pay with SYW Rewards points:
    • 7% portal rewards = 7% of $120 = $8.40

Total returns:

  • Cash back: Discover It $10 + Portal $7 + Portal $8.40 + Portal $8.40 = $33.80
  • Merchandise: $120 worth of miscellaneous items (whatever Sears or Kmart had available for 100% back in rewards)
  • Merchandise: $120 worth of items of your choice

Even if we ignore the value of the miscellaneous 100% back in points items, the above approach means that your final (long term) out of pocket cost for $120 worth of merchandise will be $100 – $33.80 = $66.20.  That’s pretty awesome!

A risky portal (Discover Deals)

The Discover Deals portal currently offers 10% cash back for Sears and Kmart.  Plus, those enrolled in the Double Cash Back offer will eventually get 20% cash back!  That’s hard to ignore.  Unfortunately, there are several risks with this portal:

  1. For Sears and Kmart, the Discover Deals list of exceptions includes “gift card purchases and redemption.”  In my recent tests, I have (after a very long wait) received email confirmations that I will receive Discover Cash Back for purchases of gift cards, purchases made with gift cards, and purchases made with SYW Rewards points.  So, it does not appear that these terms are being enforced, but they are more restrictive than most other portals which do not ban the use of gift cards.
  2. There is evidence that Discover sometimes claws back portal cash back when the Discover card is not used to pay for an order.  See: Quick Tip: Discover claws back portal purchases made with non-Discover cards.  This means that you would risk losing your rewards if you go through this portal and buy items with gift cards or with SYW Rewards points.
  3. The Discover Deals portal has been altogether flakey lately.  See: What’s the deal with Discover Deals?

If we ignore all of the above risks and assume that all goes well with the Discover Deals portal, we can expect the following rewards for a total of $100 spend:

  • Spend $100 for $120 in gift card credit.
    • Pay with Discover It card to get 5% cash back (which is eventually doubled to 10%) = 10% of $100 = $10
    • 10% portal rewards, doubled = $20
  • Buy $120 worth of items, pay with your gift cards, and get 100% back in SYW Rewards points:
    • 10% portal rewards, doubled = 20% of $120 = $24
  • Buy $120 worth of merchandise, pay with SYW Rewards points:
    • 10% portal rewards, doubled = 20% of $120 = $24

Total returns:

  • Cash back: Discover It $10 + Discover Deals $20 + Discover Deals $24 + Discover Deals $24 = $78
  • Merchandise: $120 worth of miscellaneous items (whatever Sears or Kmart had available for 100% back in rewards)
  • Merchandise: $120 worth of items of your choice

Even if we ignore the value of the miscellaneous items, the Discover Deals approach means that your final (long term) out of pocket cost for $120 worth of merchandise will be $100 – $78 = $22.  That’s ridiculously awesome (but risky)!

Mixing and matching portals with moderate risk

I believe that the biggest risk in using the Discover Deals portal is with the possibility of Discover clawing back your rewards because you didn’t pay with your Discover card.  So, one option is to use Discover Deals only for the first “dip” in which you use your Discover card to pay for a gift card.  Then, use another portal, like Splender, for the other steps.  If you want to be really safe, use TopCashBack when spending SYW Rewards points since they do not have a restriction against their use.  Unfortunately, at the time of this writing, TopCashBack payout rates are significantly lower than Splender, so I’ll assume that we go with Splender for the second and third portal “dip”.  Here’s how the math works out:

  • Spend $100 for $120 in gift card credit.
    • Pay with Discover It card to get 5% cash back (which is eventually doubled to 10%) = 10% of $100 = $10
    • 10% portal rewards, doubled = $20
  • Buy $120 worth of items, pay with your gift cards, and get 100% back in SYW Rewards points:
    • 7% portal rewards = 7% of $120 = $8.40
  • Buy $120 worth of merchandise, pay with SYW Rewards points:
    • 7% portal rewards = 7% of $120 = $8.40

Total returns:

  • Cash back: Discover It $10 + Discover Deals $20 + Portal $8.40 + Portal $8.40 = $46.80
  • Merchandise: $120 worth of miscellaneous items (whatever Sears or Kmart had available for 100% back in rewards)
  • Merchandise: $120 worth of items of your choice

Even if we ignore the value of the miscellaneous items, this mixed portal approach means that your final (long term) out of pocket cost for $120 worth of merchandise will be $100 – $46.80 = $53.20.

More risks

In addition to the portal risks discussed above, there are several others you should be aware of:

  • Points Expire:  Unlike gift card credit, SYW Rewards points expire.  Most points expire after a year, but bonus points (the kind you get with those 100% back promotions) usually expire in 90 days or less.  While it is sometimes possible to “roll points” by using them to buy 100% back in points items (as long as you pay at least 1 penny of the total with a credit card or gift card), usually that’s not the case.  With most such deals, points do not roll.  So, be sure to have a plan to use those points!
  • Some items can’t be bought with points: You can never buy gift cards with points (or with gift cards) at sears.com or kmart.com.  Also, many (or maybe all?) marketplace items cannot be purchased with points.
  • Higher Prices:  Sears isn’t known as the most competitive store price-wise. Often its possible to find the same or similar items much cheaper elsewhere.  In those cases you may be able to price-match.  If not, some of the savings accrued from the above steps will be lost due to paying higher prices.
  • No guarantee that 100% back items will be available: Opportunities to buy items for 100% back in points come and go regularly.  And, when they do appear, they often sell out quickly.
  • SYW Rewards points may not be awarded properly: As you checkout, Sears.com and Kmart.com will show you the number of points you should receive for the order.  Unfortunately, they’re not very reliable in actually rewarding that many points.  Make sure to make screen captures in case you need to argue for points after the fact.

What to do with those 100% back in points items

If you follow the steps laid out above, you’ll find your house soon filled with cheap Bluetooth speakers, headphones, cables, etc.  Here are some ideas of what you can do with them:

  1. Use them
  2. Gift them to friends / family (some of these make great stocking stuffers!)
  3. Gift them to charitable organizations (e.g. Salvation Army, Goodwill, etc.)
  4. Sell them
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