Double dipping Discover’s 3rd quarter categories

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Thanks to Discover’s offer to double all cash back for a year, their quarterly 5% categories are more interesting than ever.  Now, instead of earning 5% for those categories, cardholders enrolled in the Double Cash Back offers, will ultimately earn 10%.

Double Dipping Discover

This quarter, July through September, Discover is offering 5% cash back for up to $1500 in spend at Home Improvement Stores, Department Stores, and Amazon.com.  For those enrolled in the Double Cash offer, this is a great deal.  Even if you don’t plan to buy anything in those stores, you could buy Visa gift cards and merchant gift cards in-store at a number of them, including Home Depot, Kohl’s, Lowe’s, and Sears.  Amazon.com sells gift cards too.

What if you do have plans to make purchases at these stores, though?  Could you do better than 10% cash back?  Of course…

Double Dipping Discover

A simple double-dip involves going through an online portal to a qualifying store and then paying with your Discover card.  Ideally, you would use the Discover Deals portal since cash back earned from that portal will be doubled as well.

On Discover’s 5% CashBack Bonus page, they show examples of stores that qualify.  This is far from a complete list, but it’s a good starting point.  I cross referenced the example list of qualifying stores with stores found on the Discover Deals portal to see which stores will easily qualify for a double dip.  Here are the stores that appeared in both places:

Home Improvement Stores Cash Back via Discover Deals
Ace 5%
Home Depot 5%
Lumber Liquidators 5%
Department Stores Cash Back via Discover Deals
Bloomingdales 5%
Bon-Ton Stores* 5%
Dillard’s 5%
JCPenney 5%
Kohl’s 5%
Lord & Taylor 5%
Macy’s 10%
(through August 31)
Neiman Marcus 5%
Neiman Marcus Last Call 5%
Nordstrom 5%
Saks Fifth Ave & Off Fifth 5%
Sears 5%

* Bon-Ton Stores include: Bergner’s®,Boston Store®, Carson’s®, Elder-Beerman®, Herberger’s®, PARISIAN, Younkers
** Amazon.com is not available through the Discover Deals portal, but you can get 6% cash back by clicking through from TopCashBack for certain types of purchases.

As you can see above, many stores that qualify for Discover’s 3rd quarter 5% categories are also available for 5% cash back through the Discover Deals portal.  So, those enrolled in the Double Cash Back offer can easily get 20% cash back:

  • Click through Discover Deals to the store in question
  • Buy items and pay with your Discover card

You’ll get 5% back from the portal + 5% back from the credit card, and both will be doubled at the end of the year.

Triple Dip?

In a few cases, it may be possible to earn 3 times the rewards, as follows:

  • Click through Discover Deals to the store in question
  • Buy a gift card for that store and pay with your Discover card
  • Click through Discover Deals to the store again.
  • Buy merchandise and pay with your gift card

In situations where this works, you can earn 5% from your credit card and 10% from Discover Deals (since you’ll have earned 5% twice).  Then, via end of year doubling, you’ll total 30% cash back! That said, it’s very important to understand that this will not work at most stores.  Most stores do not offer portal rewards when you purchase gift cards and some do not offer portal rewards when you use gift cards.

Triple Dip Candidates

Using the list of stores identified above, I looked up each one in the Frequent Miler Laboratory to see if a triple dip is likely to work.  Here’s what I found:

Home Improvement Stores Earn portal rewards when buying gift cards? Earn portal rewards when using gift cards? Analysis
Ace No data
Home Depot No Yes Most reports suggest that the double dip won’t work
Lumber Liquidators No data
Department Stores Earn portal rewards when buying gift cards? Earn portal rewards when using gift cards? Analysis
Bloomingdales Maybe (mixed reports) Yes (very old report) This double dip might work, but its risky
Bon-Ton Stores No data
Dillard’s No data
JCPenney No Yes Probably won’t work
Kohl’s Reports are mixed. Only physical gift cards work. Yes This used to be a dependable double dip, but I haven’t received any recent reports of success. Risky.
Lord & Taylor No Data
Macy’s No Yes Won’t work
Neiman Marcus Yes (reports are mixed, but most report success) Yes This one should work
Neiman Marcus Last Call No data, but I expect that it would work the same as Neiman Marcus
Nordstrom No Yes No direct double dip opportunity
Saks Fifth Ave & Off Fifth Yes (physical gift cards work, but not e-gift cards) No data on the use of gift cards, but it’s likely that the double dip will work.
Sears Yes Yes This works, but it’s very important to buy e-gift card or reload existing gift card. Physical gift cards are sold by Kmart and will not be eligible for 3rd quarter 5% bonus.

As you can see in the table above, Neiman Marcus, Saks, and Sears are all candidates for the triple dip.  If you try it, please keep in mind that your results may vary.  There is no guarantee that this will work for you.  Also make sure to attend to the details noted in the table above:

  • Sears: Buy e-gift cards or reload existing gift cards. Physical gift cards will not result in earning the 3rd quarter 5% bonus.
  • Saks: Buy physical gift cards, not e-gift cards.

Consider waiting for an even better triple dip

Discover’s fourth quarter 5% category is called “Holiday Shopping & More”. While we don’t yet know the full details, in the past almost all online shopping counted.  So, I expect that all of the above stores, and many more, will qualify for the 4th quarter 5% bonus.  More importantly, Discover has historically offered better than usual portal rates in the holiday months at the end of each year.  If they do that again, then Discover Deals will most likely offer 10% cash back for many of the stores shown above.

If both of my 4th quarter assumptions come true, it will be worth waiting to triple dip.  You might be able to earn 5% from your credit card and 20% from Discover Deals (since you’ll have earned 10% twice).  That’s a total of 25% cash back which will be doubled at the end of the year!

Here is, specifically, how it might work for Sears (if my 4th quarter assumptions come true):

  • Go through Discover Deals to Sears.com: 10% cash back
  • Buy gift cards and pay with your Discover card: 5% cash back (thanks to the 4th quarter bonus)
  • Go through Discover Deals to Sears.com: 10% cash back
  • Buy merchandise and pay with gift cards: If you’re a member of Sears’ Shop Your Way Rewards program you’ll earn at least 1% back in SYW points

In total, you’ll earn 25% cash back and at least 1% in SYW points.  And, thanks to the Double Cash Back promotion, that will be doubled to 50% cash back!

Conclusion

There are some great deals to be had by combining multiple offers: Discover’s 3rd quarter 5% bonus; Discover Deals portal; and Discover’s Double Cash Back promotion.  On the other hand, there’s a good chance that we can do even better in the fourth quarter.  If you have limited purchases to make within the allowed categories, consider rolling the dice and waiting.  Or, if you have lots of purchases to make, it might make sense to maximize this quarter’s promotions and the 4th quarter promotion as well.

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