A four step Perpetual Point Machine

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In previous posts (such as this one), I defined the Perpetual Point Machine (PPM) as “a scheme in which, after a little push, hotel points and/or airline miles are accrued over and over again, forever, with little or no additional work or money.” We have yet to identify a perfect PPM, but it has been fun and rewarding pursuing it. Today I’ll describe a PPM that works as long as certain pieces are in place.  Here goes:

Step 1: Buy Sears gift cards via Ultimate Rewards Mall

As long as you have a Chase credit card that gives you access to the Ultimate Rewards Mall (see Preparing for Miles), you can log into the Ultimate Rewards Mall, click through to Sears, and buy gift cards.  The Ultimate Rewards mall is currently offering 4 points per dollar if you log into your Sapphire or Ink Bold account, and 5 points per dollar if you log into your Freedom card account.

Step 2: Upgrade to EBay gift cards

Find the gift card rack in your local Sears or Kmart to see if they sell EBay gift cards.  If so, use your Sears’ gift cards to buy EBay gift cards.  Note: not everyone has found these in their local stores so this might not work for you.

Step 3: Use EBay gift cards to buy Walmart gift cards

Usually, low denomination Walmart gift cards are overpriced on EBay, but I’ve found that $500 gift cards are often available for less than face value.  Even at face value, this is a bargain since EBay will award you with 2% back in the form of EBay bucks which can then be applied toward future purchases.

Step 4: Use Walmart gift cards to buy Visa gift cards

Walmart sells $200 Visa gift cards online for $206.24 and they will let you use Walmart gift cards to purchase them.  As long as you buy your Walmart gift cards for a bit less than face value, the 3.12% fee will not cost you much out of pocket.  Once you receive your Visa gift cards, you can go back to step 1 and use those gift cards to buy more Sears gift cards!

Add it up

Let’s say you start with $1000 in Sears gift cards.  From this initial purchase, you will get at least 5000 Ultimate Rewards points (1 point per dollar from your credit card and 4 points per dollar from the UR mall).  You then upgrade to 20 $50 EBay cards at no extra cost to you (except your time).  You then buy 2 $500 Walmart cards for, say, $490 each on EBay.  From that purchase you will get back $9.80 in EBay bucks.  So, you now have a total of $29.80 in EBay money to use later.  You then buy 5 $200 Visa gift cards from Walmart using your gift cards plus $31.20 of your money to cover the gift card fees.  So, after round 1, your $1000 has come back to you in the form of Visa gift cards, and you have earned 5000 Ultimate Rewards points (worth $65.50 in Fair Trading Price) and $29.80 in EBay credit which is almost exactly offset by $31.20 in fees.

In subsequent passes you will earn fewer Ultimate Rewards points since you will no longer use your points earning credit card for buying the Sears’ gift cards, but you will still earn at least 4000 points.  Over time, your EBay credit will increase enough to buy an extra Walmart gift card and you can then increase the size of each cycle (e.g. buy $1500 worth of Sears’ gift cards instead of $1000).

Analysis

Is it worth the trouble to do this PPM?  For me, no, not really.  Even though I have two local stores in which I can upgrade to EBay cards, it is still a hassle to do.  If / when Sears goes back to 10 points per dollar in the Ultimate Rewards mall, though, I might then be tempted…


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