Buy miles for 1.2 cents or less

A faster, better, easier way to buy miles and points

In a previous post, I showed how it is possible to buy airline miles and hotel points for less than a penny. The problem with this approach was that it was overly complicated, required very high spending, it led to the risk of nasty credit card account reviews, and it violated terms and agreements (see a quick note about square). Other than that, it was great.

Today I’ll describe a better approach. Sure, the miles may cost a little bit more, but this approach is easier, has no minimum spend requirements, and is completely above-board. In fact, toward the end of this post I’ll show a variation of this approach that will let you buy miles for less than a penny.

Here is the basic idea: go through a points-back online shopping mall to buy gift cards; then upgrade the gift cards to more valuable gift cards; and then sell the gift cards. In the process you will lose a bit of cash, but gain lots of miles. Below are step by step instructions.

Preparation

Before you can follow the directions given below, you will need your own Chase SapphireSM Preferred Card. If you don’t already have one, you can sign up with this link. Even if you don’t want to buy miles, this is a great card. The signup bonus alone is worth $500 in cash back, or $625 in travel booked through Chase, or more than $1000 in travel if you convert the points to United Airlines miles and/or Hyatt points. That last point is really key to the value of this card: Ultimate Rewards points earned with this card are instantly transferable to a number of airline and hotel programs. So, you can shop around to find the best miles and points redemptions before transferring your points and in that way get some incredible values from these points! I will get a small commission if you use my link, but you’ll get the same best offer available anywhere. I promise I would recommend this card with or without the referral commission. In fact, I have recommended it many times prior to my signing up for a referral network. Another great benefit to this card is the 7% annual bonus for all points earned in the calendar year. This is a key part of the plan outlined below.

Step 1: Buy Sears or Kmart gift cards through the Ultimate Rewards Mall

The Chase Sapphire card gives you access to the very lucrative Ultimate Rewards Mall. By doing your online shopping through this mall, you can earn bonus points on top of the points regularly awarded for credit card spend. Also, unlike many other online malls, Ultimate Rewards is very good about crediting your purchases quickly. Most of my purchases have been credited within a week. The slowest took two weeks. The mall currently offers 6 extra points per dollar for purchases at Sears or Kmart. So, by going through the mall to buy Sears or Kmart gift cards, you will earn 7 points per dollar (1 base point from using the credit card and 6 extra points from the mall) plus another 7% for a total of 7.49 points per dollar spent. I recommend buying the physical gift cards instead of the e-gift cards. Both will work for this scheme, but the physical cards are a bit easier to use since the e-cards sometimes require manager overrides if spent in a physical store. The physical cards are also easier to sell if you need to get rid of them.

Step 2: Upgrade your gift cards

Go to your local Kmart and find a gift card rack. They often have multiple racks around the store. The trick is to find the one with the most cards from other retailers. The goal is to find the most valuable gift cards they sell and buy those cards using the Sears/Kmart gift cards you have in hand. To figure out which cards are most valuable, go to GiftCardGranny and search for cards that you can sell for at least 90% of their listed value. The best tend to be gas station cards (BP, etc.). Write down the list and bring it with you to Kmart (or look it up on your smart phone). I recently bought some BP cards from Kmart that are currently listed at 91% value.

Step 3: Sell your gift cards

The easiest way to sell your gift cards is through online gift card exchanges like PlasticJungle. GiftCardGranny is a great starting point because it lists the exchanges that are available and shows how much each will pay. I only have experience with PlasticJungle so I’ll describe how that works: You go to PlasticJungle and select “Sell us your gift card”. From there you can enter the type of card and the amount on the card. PlasticJungle will email to you a free mailing label so that mailing the card will cost you nothing. PlasticJungle will then pay you either through your PayPal account or by sending a check.

Another way to sell gift cards is through EBay. The problem is that EBay charges 9% in seller fees and another 2.7% in PayPal fees. So if you sell a card at face value, the most you will get is 88.3 cents per dollar. Strangely, though, gas station gift cards on EBay often sell for more than their face value. So, you actually do have a chance to profit more by selling through EBay than by selling to an online gift card exchange.

Step 4: Tally it up

Let’s say you follow the advice above by buying $1000 in gift cards. And, let’s say you sell those gift cards at 91% value. This means that you will receive $910 back for a net expense of $90. Now tally up the miles earned. Remember that you get 1 point from your credit card, 6 points from the Ultimate Rewards mall, and an extra .49 points from the annual bonus. Therefore you can multiple your $1000 by 7.49 to see that you have earned 7,490 miles! Since you spent $90, you can now see that you just bought your miles for 1.2 cents each ($90 / 7,490).

It gets even better (or worse)

The points awarded for Sears and Kmart through the Ultimate Rewards mall seems to change regularly. At the time of this writing, they are offering 6 points per dollar, but that amount might go up or down at any time. If you’re interested in this scheme, though, get ready for December 9th: the Ultimate Rewards mall has a number of holiday promotions and one of them is Sears for 10 points per dollar on December 9th!  Thanks goes to ThePointsGuy for pointing out the December specials! If you follow this scheme and buy your gift cards on December 9th, you will get 11.77 points per dollar (1 credit card point, 10 extra points, .77 end of year bonus). Your total cost per mile will be .76 cents! If you convert Ultimate Rewards points to cash for a penny per point (I don’t recommend it, but you could), you could actually pay yourself back completely, and still get 2.77 miles per dollar spent!

Thank you Gabe!

A reader named Gabe recently commented in one of my posts about how he is profiting from his Sears gift cards. He has an ingenious scheme (which I’ll write about in a later post) that actually grows the value of his gift cards indefinitely, over time. The key to his scheme starts with the fact that you can buy non Kmart gift cards at Kmart — using your Sears or Kmart gift cards! Ever since I read Gabe’s scheme, my head has been swimming with possibilities! Frequent readers will probably see the possibilities for perpetual point machines (yep!), new ways to meet minimum credit card spend (yep!), and much more. So, over the last several days I made a few trips to Kmart to make sure this stuff works and it does! Stay tuned for more… much more.

Last updated on November 30th, 2011

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.

More articles by Greg The Frequent Miler »

48
Leave a Reply

avatar
35 Comment threads
13 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
21 Comment authors
DavidFrequentMilerGMASHTomorrow only: meet minimum spend, get 22 points per dollar, elite status, and more - The Frequent MilerGetting spending up without the Mint 2011 - Page 84 - FlyerTalk Forums Recent comment authors

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  Subscribe  
Notify of
Jennifer
Guest
Jennifer

So we are *certain* that you can use Sears gift cards to buy other gift cards at Kmart? Even if I don’t sell them, it would still be valuable to me to be able to get 6 (or 10) points per $ on Sears gift cards and then go to Kmart and get other gift cards with them… like BP, AMC theaters, etc. Places I go to all of the time. If we’re sure this works, I’ll definitely be buying some more Sears gift cards!

gpapadop
Guest

Are u free for lunch on Wednesday?

Nick M.
Guest
Nick M.

Question: I buy a gift card on K-Mart and have it shipped to me. After I get the physical gift card, I go to a local K-Mart and use that gift card to buy another gift card, lets use your example of a BP gift card. After I buy the BP gift card, I turn around and sell it on Plastic Jungle? Just want to make sure I have it right, before I start buying. Thanks!!!

Paul Ahn
Guest
Paul Ahn

A word of caution. Using Giftcardgranny, I identified that Giftcard Castle and Giftcards.com had the highest payout for Flemings and Elephant Bar. I filled out the form on their websites and mailed in the gift cards (I even spent extra at the post office so I can track the package). In about 2 weeks, I received the gift cards back, one with no explanation, and the other with a form letter stating that they couldn’t process the order at this time. Make sure you have a back up plan so you’re not stuck with unwanted gift cards.

John
Guest
John

I think your math is a tiny bit off.

You calculate the number of points earned as:

(6 * 1.07) + 1 = 7.42 and (10 * 1.07) + 1 = 11.70

But the year end 7% bonus also applies to the 1 point you earn from the credit card directly, so the calculation should be:

(6 + 1) * 1.07 = 7.49 and (10 + 1) * 1.07 = 11.77

which actually makes the deal slightly better!

MJ
Guest
MJ

Bummer – there aren’t any Kmarts in my neck of the woods! Sears doesn’t have those same gift card racks, do they?

TJ
Guest
TJ

Strange – i called a couple of Kmarts/ Sears in the SF Bay Area but none has ever heard of vendor gift cards they only carry Kmart/ Sears ones. Might be a CA thing?

gpapadop
Guest

The last time I was in a KMart was when I was a bell ringer for the Salvation Army and had to go inside to warm my legs on a super cold Michigan day. Maybe I should go back inside so many years later and take a look at the rack with them gift cards;-)

Simon
Guest
Simon

What cut does Plastic Jungle take? For example, Home Depot gift cards selling for 7% off face value, it would be interesting to know what they offered the vendor.

I called a Kmart near me (Oceanside, CA) and they told me they sell restaurant gift cards such as Applebees and Subway. I will go and check this week if there are others.

NW
Guest
NW

Don’t forget that when you sell the gift card on ebay and the buyer pays via paypal, paypal takes 2.7% fee of the total amount. So ebay fee (9%) + paypal fee (2.7%)= 11.7% Also, don’t forget the shipping fee. Selling a gift card on ebay is not without risk. Ebay has significant restrictions on the sale of gift cards.

Jake
Guest
Jake

Be careful with PlasticJungle; just check out their business’ Facebook page for proof of customers being scammed. They recently “upgraded” their website and have stolen thousands of dollars worth of gift cards from sellers (and selling those) without paying as promised. Only when customers have complained ad infinitum do they finally give in and pay. Check out the comments on their wall posts. They’ve also recently disabled individual posts from customers because the negative feedback on their wall was getting overwhelming.

Totally shady if you ask me.

Ryan
Guest
Ryan

I’m surprised to see that info on Plastic Jungle…i’ve bought quite a few from them and have had no issues at all. I get them fairly quickly and also check the balances and all have been just fine.

David
Guest
David

It will be good if you can post some ideas how non US residents can earn points like this!

Scottrick
Guest
Scottrick

I just took a look at Kmart’s web site. If you search for “Gift Card” it takes you to a page where you can check your balance. At the bottom of the page is a disclaimer that seems pretty obvious “Gift Cards can not be used to purchase Gift Cards”

http://www.kmart.com/shc/s/nb_10151_10104_NB_gclanding

However, we all know that Sears (and perhaps Kmart, too, though they seem to be doing better), is not exactly the best run store. It wouldn’t surprise me if employees are not enforcing this rule.

Jake
Guest
Jake

@Ryan – the issue here is selling gift cards at PJ to receive payment. Obviously people have no issue purchasing gift cards from them because it takes no effort for them to steal cards from sellers to resell them for a ‘discount’. Many people only report getting cards with zero balances because sellers have had to basically use up their gift card balances once they receive no payment or response from PJ after having sold them to PJ.

Brent
Guest
Brent

One thing to consider with websites like Plastic Jungle is that you will have to mail in some cards and there can be some lag time before you get paid. Also, they may want cards in smaller denominations $10-$25… which will really limit the number of miles you will be able to purchase. I’d have a hard time believing that the website would keep any retailer’s gift card at a 91% return rate if they had an influx of their gift cards mailed into them.

Supply and demand.. The more they have the lower the % rate they will buy them at to get rid of them quicker. The lower price would move the gift cards. So I would think there is some risk involved… buying a lot of gift cards with the plan to sell them as close to face value as possible

Peter
Guest
Peter

Does FrequentMiler have any luck for the Sears gift card purchases @ AA eShopping — during the 10 mile/$ promotion in late Sept.?

I sent numerous e-mails out and got messages that — do not bother us after 45 days of date of purchase. Still nothing.

Who should we complain too now? AA or Sears? EShopping site is useless.

trackback

[…] Buy miles for 1.2 cents or less […]

trackback

[…] Buy miles for 1.2 cents or less […]

nannerdove
Guest
nannerdove

I was just scammed big time by Plastic Jungle. The first time I did business with them they told me the address I was providing needed to be in closer proximity to my PC–I’m like wth are you talking about. But about a month later I thought I’d give it another try…send the $100 gift card in and got the money in my PayPal account in 2 days. So I tried again, on 10/20, the beginning of the nightmare…first they tell me no card received, then care is received and there software at PayPal is not working (they have me this about 4 times)…all the while I’m calling to track the bal on the card and it’s ok at $100…sent another email on Monday and no reply so I contact the Federal Trade Commmission and today I go into my PJ account and the card/transaction is cancelled…I call and I’m told that the card was cancelled coz it had a $0 balance!!! I called the 1-800 # on the card today and sure enough $0–zero! I cannot tell you how pissed off I am right now. And the big question is,you were going to post $$ to my PayPal but had internal problems, so if you were going to post in the last 30 days then there must have been money on the card!!!??? How, when, where did this balance get to zero? I have call the company that issued the card to see if they can give me any info but as far as I’m concerned this is theft and I don’t plan on being quite about it!

Ryan
Guest
Ryan

Wow…guess i’ll use my cards that i’ve ordered as quickly as possible. I think I will take a screen shot and pictures if i ever mail stuff in to them, seems a little sketchy when mailing them something.

trackback

[…] Buy miles for 1.2 cents or less […]

Chris
Guest
Chris

FrequentMiler,

Where are you located? None of the Kmarts around me have gas or grocery or eBay giftcards. They only have lower value ones (like Red Lobster & Olive Garden), that are worse than the 83 cents on the dollar you can get for Sears or Kmart giftcards.

trackback

[…] Once you have grown your gift card stash high enough, you can cash out in many ways. The best is to use the EBay or Sears gift cards directly for purchases you would make anyway. If you would rather get cash, I’ll be writing more about this in the future, but some ideas can be found in this post: Buy Miles for 1.2 Cents or Less. […]

Mary Jenren
Guest

I was very happy to find this blogThanks for having the page! Im sure that it will become extremely popular. It has good and valuable content which is very rare these days.

Chris
Guest
Chris

FrequentMiler,

Thanks for the tip! I went back, and I found a bunch of other giftcards on a somewhat hidden display across from the chocolates.

I am now the proud owner of several giftcards, three boxes of chocolate, and the largest Reese’s Peanut Butter Cups I have ever seen. 😉

Chris
Guest
Chris

And, P.S., wth does “hope you can write better articles” mean in the comment above?

Hahahaha!

I like you’re articles just fine!! Keep up the great work!

trackback

[…] Mall, and then upgrading the cards at Kmart, and then selling the upgraded cards. See, for example, Buy Miles for 1.2 Cents or Less and A Two Player PPM. The trickiest part of the whole process is the “upgrade” where […]

trackback

[…] policy (if you ask) seems to prohibit it. You can read about upgrading at Sears here, and at Kmart here. I’ve also heard that it is possible to do this at Walgreens, although the one time I tried I […]

trackback

[…] Buy miles for 1.2 cents or less […]

trackback

[…] risky option Another option is to buy, upgrade, and sell store gift cards. See, for example, here. It's definitely more work than buying visa or Amex cards, but shouldn't trip any important alarms. […]

trackback

[…] posts in the future with suggestions. For now, one option is to upgrade and then sell them. Read Buy miles for 1.2 cents or less for details about how to do […]

GMASH
Guest
GMASH

What is the strategy that Gabe suggested. Did you write a follow up post on that. Please send the link as I can’t seem to find it on your blog. Thanks !

David
Guest
David

LOOKING TO buy membership rewards @ 1.4 cpm with an order 5-10million one month