Are Visa gift cards at Staples still worth buying?

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There was a time when $200 Visa gift cards at Staples was an absurdly lucrative deal (see this post, for example).  Then, Staples stopped paying out through portals for online purchases of Visa gift cards.  Despite that, and thanks to Visa Savings Edge, buying $200 Visa gift cards was still profitable (see:  The deal without portals).

Staples_200_Visa

Now, though, Visa Savings Edge no longer offers rebates at Staples.  So, are the cards worth buying anymore?  Keep in mind that the ability to buy $500 Visa gift cards at office supply stores with a credit card has long since passed ($500 Vanilla window slams shut at Office Depot)…

Math time!

This is the part you were looking forward to…

Assumptions:

  • $200 Visa gift cards cost $206.95 after fees
  • Payment is made with a Chase Ink card that earns 5 points per dollar at office supply stores

Cost Per Point Analysis:

  • Card fee: $6.95
  • Points earned: 207 x 5 = 1035
  • Cost per point: $6.95 / 1035 = $0.0067 (AKA two thirds of a cent)

Since points can be redeemed for 1 cent each, this is a way to buy points at a considerable discount

Points Per Dollar Analysis:

Another way to look at deals like this is to assume that the buyer uses the points earned to reimburse the card fees.  Then we can see how many points per dollar are earned without fees:

  • Card fee: $6.95
  • Points earned: 207 x 5 = 1035
  • Points required to reimburse fee: 695
  • Points remaining: 340
  • Points per dollar earned (with no fee): 340 / 200 = 1.7

Via this analysis, we can say that purchasing $200 Visa gift cards with Chase Ink cards results in a 1.7 points per dollar earning rate.

Vs. Gas Station Analyses

Suppose you have a gas station in your area (or a convenience store that codes as a gas station) and you can buy $500 Visa gift cards there for $504.95.  And, remember that Chase Ink cards earn 2 points per dollar at gas stations.  Let’s compare buying gift cards at the gas station to buying at an office supply store…

Gas Station Cost Per Point Analysis:

  • Card fee: $4.95
  • Points earned: 505 x 2 = 1010
  • Cost per point: $4.95 / 1010 = $0.0049 (AKA about half of a cent)

The gas station route offers considerably better cost per point than office supply stores (.49 vs. .67 cents per point)

Gas Station Points Per Dollar Analysis:

  • Card fee: $4.95
  • Points earned: 505 x 2 = 1010
  • Points required to reimburse fee: 495
  • Points remaining: 515
  • Points per dollar earned (with no fee): 515 / 500 = 1.03

Via this analysis, we can say that purchasing $500 Visa gift cards with Chase Ink cards at gas stations results in a 1.03 points per dollar earning rate.  Interestingly, the gas station approach is considerably less lucrative than office supply stores when the intent is to pay oneself back with points.

The $2K analysis

The above analyses seem to just confuse things. Looked at one way, $200 cards are better.  Looked at another way, $500 cards are better.  To settle this, let’s consider an example real world scenario where there is a fixed limit to how much one would really spend on Visa gift cards.  Let’s say, for example, a person plans to buy $2,000 worth of Visa gift cards per month with their Chase Ink card.  In that case, which is better?

Office Supply Analysis:

  • Total spend: $206.95 x 10 = $2,069.50
  • Points earned: 207 x 10 x 5 = 10,350
  • Points required to reimburse fees: 6950
  • Points remaining after reimbursing fees: 3,400

Gas Station Analysis:

  • Total spend: $504.95 x 4 = $2019.80
  • Points earned: 505 x 4 x 2 = 4,040
  • Points required to reimburse fees: 1980
  • Points remaining after reimbursing fees: 2,060

The $200 Visa gift approach results in 65% more points earned than the gas station approach after paying oneself back for all gift card fees.

Conclusion

Despite Visa Savings Edge no longer offering Staples automatic rebates, $200 Visa gift cards are still a good deal when earning 5 Ultimate Rewards points per dollar for the purchase.  Does this mean that I recommend buying $200 Visa gift cards? Not necessarily!  First, dealing with lots of $200 gift cards is a lot more work than dealing with fewer $500 gift cards.  Second, there are other 5X opportunities out there that make it possible to earn 5X while buying $500 Visa gift cards.  Here are a few posts that can help get you started:

Also see: The weird math of buying points

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