I have written about ongoing gift card reselling deals several times over the past few days / weeks
(READ MORE: Flash gift card sale at Sams Club)
In many of the comments of those posts, I’ve gotten a lot of questions about how one can get started in gift card reselling. So I thought I’d write up a little bit about the basics of gift card reselling
The basics of gift card reselling: buy low, sell high
Gift card reselling at its core is like any other business. Buy low, sell high
Start by following Points With a Crew on Twitter or our once-daily email, or some of the other gift card / deal blogs. When you see an advertisement or alert about a discounted gift card deal, check a site like Gift Card Wiki for the rates at which various sites are buying gift cards at. Here’s an example from Overstock.com – one of the cards that is available at Kroger (with digital coupon) at $40 for $50 in cards (80% face value)
So if you bought 2 $25 Overstock.com gift cards at Kroger, you would pay $40 after digital coupon. You’d then be able to sell those to either Abc Gift Card or Gift Card Zen for $40. In this case, you’d break-even, although you would net the credit card points or cashback as well as the fuel points from Kroger.
One important thing to notice is that there are 2 different types of gift card buyers, which you can see in the picture above. The most common type are sites like Abc Gift Cards, Gift Card Zen, Gift Card Bin or Card Cash, where you sell your gift cards and right away get paid at the listed percentage of face value. Others, such as Raise or GiftMe or SaveYa are more auction sites where you don’t get paid until the end-user buys your gift card. You choose the price / amount of discount, but it’s up to the market. The market-enabling site then takes a commission of your sale. Think of it like eBay.
If you’re just starting out, I’d recommend first using a site that has a fixed buy percentage. That way you know exactly what you’re getting and getting it immediately. The marketplace sites (like Raise) sometimes can get you a higher percentage of sale, but you also run the risk of not selling or the market getting flooded, which is one reason it took me over 6 months to finally liquidate $18,030 in gift cards
Where gift card reselling gets tricky
So, where gift card reselling gets tricky is that there is only a limited amount of people that are interested in BUYING discounted gift cards. So every new person that starts gift card reselling means more competition and potentially fewer deals for those who are already reselling gift cards.
I can almost guarantee that I will get some angry comments on this post in this vein.
So, having said that, it is definitely true that many people use either private buyers / marketplaces, or won’t talk about where they sell their gift cards. A lot of the deals are only deals if you’re able to sell the cards for a higher rate than is available publicly.
For example, I talked about how iTunes cards are 15% off at Staples right now but that only is a deal because I have a buyer who will buy iTunes cards for that much. iTunes cards have a higher than average amount of fraud, which means that the public offers tend to be lower than you’ll be able to buy them at most sites.
Tools for gift card reselling
If you’ve never resold gift cards before, you’ll want to check out my primer on how to get started with gift card reselling. The big tool that I use for gift card reselling is this gift card scanner (typing in tons of gift card numbers and PINs is annoying, even if I do have an army of “minions” that I sometimes pay / coerce into typing as part of “homeschool” 😀
I also use these Scotty Peelers (to peel off the PINs on cards, though you have to be careful).
So, how to get started in gift card reselling?
As always, start slow. Set a budget of how much you want to try investing in this. If you don’t have $100-500 that you want to commit to this, then you’re probably in the wrong business. Remember, the absolute worst case is that you would lose all that money, but the reality is that even if things go horribly wrong, you’re still going to be able to sell the gift cards for SOMETHING (or maybe even use them yourself!). Even my first forays into gift card reselling (which went horribly wrong) still ended up me up with SOMETHING.
Remember, gift card reselling is a fairly low margin business. A margin of 1% on a card is a pretty good deal, and sometimes you may even choose to buy a deal that is break-even or slightly money losing, because you’ll make up the balance either with credit card points or portal cashback / points.
While many shopping portals don’t track on gift card purchases, some do, so if you’re buying online, it’s usually worth your time to try and go through one, just in case.
So, there you have it. A beginner’s primer on gift card reselling – happy selling!