In the world of points, miles, and deals, one of the best ways to find out what works and what doesn’t is to simply try things and keep track of what succeeds and what fails.  That’s the purpose of the Frequent Miler Laboratory.  On that page, I record experiments that have been proposed, experiments in-progress, and experiments completed.  Results include both my own results and those reported by readers.

Here are some lab results that have been compiled since my last post on the subject in October (see “Mid October Laboratory News“)

DrugStore.com success

Greg Z reported a successful double dip.  He went through TopCashBack and bought a Beauty.com gift card (which can be used at DrugStore.com).  He then went through the Ultimate Rewards Mall to DrugStore.com to buy merchandise. He paid partially with the gift card and partially with an American Express prepaid card.  In total, Greg earned 10% cash back from TopCashBack and full points from the Ultimate Rewards Mall.

This result is surprising to me because, in the past, I’ve tried many portals to try to find one that would give points when using gift cards at DrugStore.com, but all of my experiments failed.  The difference may have been that I always paid 100% with gift card credit.  I now need to repeat the experiment with partial credit card payment.

It’s worth noting that DrugStore.com gives 5% back in the form of DrugStore.com dollars (usable for future purchases) both when purchasing and using gift cards.  So, Greg Z’s double dip becomes more like a quadruple dip!  See “The surprising drugstore.com triple dip” for details.

In addition to their own gift cards (and beauty.com gift cards), DrugStore.com sells gift cards for other merchants.  I have initiated an experiment in which I went through the ShopDiscover portal to buy a merchant gift card from DrugStore.com to see if I would get cash back.  I don’t have final results yet, but it’s not looking good.  I never received an email from Discover saying that I received cash back.  And, no, DrugStore.com does not allow you to buy gift cards with gift cards.

Barnes & Noble fail

I tried loading my American Express Campus Edition card at a Barnes & Noble store that was not a campus bookstore.  The cashier was unable to load it.  Unfortunately I do not know whether it was because it really won’t work or if the cashier didn’t know how to do it.

Best Buy success

Colin successfully got extra miles by going through the United MileagePlus shopping portal to Best Buy and buying an iTunes gift card. 

eBags fail

Dina tried to double dip through Ultimate Rewards Mall. She found that buying an e-gift card did not result in points, but buying merchandise with the gift card was successful.

North Face success

Chris D succeeded in a double dip here.  Chris went through the Ultimate Rewards Mall to North Face and bought a North Face gift card.  Then, Chris went back through the mall to use the gift card when buying merchandise (part of the transaction was paid by credit card).  Both transactions resulted in full points.

Pottery Barn fail

Both Jessica and Mommy Points reported that going through the Ultimate Rewards Mall to Pottery Barn to buy e-gift cards did not result in points.  Mommy Points did receive points, though, when she went through the Ultimate Rewards Mall again to use the gift card.

Sears success

As I reported earlier (see “The Sears double dip is alive but hobbled“), Sears seems to no longer give points when buying e-gift cards, but may still give points when buying physical gift cards. In my experiments I went through the ShopDiscover portal (so I earned cash back instead of points), but I suspect that the same is true for point-earning portals.

Other experiments

Results from many other experiments are listed on the Frequent Miler Laboratory page.  If you have suggestions for new experiments or results of your own, please hop over there and leave a comment.  Thanks!

A couple of weeks ago I presented at Frequent Traveler University in Los Angeles.  One of the topics I covered was how to earn 5 points per dollar (or more) on all spend.  We started with a moment of silence for the end of Vanilla Reload cards at Office Depot (see “Office Depot discontinues Vanilla Reload cards“).  We then went on to discuss a number of opportunities that still exist.  Below is a brief outline…

1. Buy gift cards and use them

Many grocery stores, drug stores, gas stations, and office supply stores sell gift cards.  The trick is to use a credit card that offers 5X or more at one of these locations to buy gift cards that you can then use elsewhere.  See “Best Category Bonuses” to find credit cards that offer the best bonuses.

Example 1: Suppose you are about to make a big purchase at Lowes.  You can always stop by a different store first to buy Lowes gift cards (usually with no fee and no sales tax) and then use those gift cards at Lowes.  The advantage is that, depending on which card you use, you may earn 5 or 6 points per dollar when buying the gift card compared to 1 point per dollar if you made the purchase directly at Lowes.

Example 2: Go to a store in which your credit card earns a high multiple and buy a bank gift card (e.g. Visa, MasterCard, or American Express).  Use that gift card for all purchases in which you would normally have earned only 1 point per dollar.  Watch out for fees, though!  Most bank gift cards have very high fees as a percent of their overall value.  For example, most $100 cards have $5.95 fees.  That means you would be paying 6% in fees in order to earn 5 points per dollar.  It’s not worth it!  Instead, look for $500 cards with $4.95 fees.  Losing just 1% in order to earn 5 points per dollar is often a great deal.

Caution: When you buy merchandise with a gift card, you do not get the benefits such as extended warranty and purchase protection that many credit cards offer automatically.  Use gift cards only to buy things where you are sure those protections don’t matter. 

2. Buy reload cards

Prepaid reload cards are more versatile than gift cards because they can be used, indirectly, to pay bills that can’t usually be paid by credit card.  The way they work is that they come with a PIN number that is used online to load the money from the reload card into something else.  The “something else” could be your Bluebird account, your PayPal account, or one of many prepaid reloadable debit cards.  For more information, please see “The reload game is on.”  Currently, reload cards are no longer available at office supply stores, but can be found elsewhere.  As with gift cards, the trick is to use a card that earns a high multiple at a place that sells reload cards (see “Best Category Bonuses“).

3. Buy reload cards with bank gift cards

This is a combination of options 1 and 2, above.  The idea is to buy bank gift cards at a place that offers you the best points per dollar, then use that gift card to buy reload cards at a different store.  While I and many others have had success with this, it doesn’t always work. Some stores that sell reload cards won’t allow gift cards as a form of payment.  Note also that you now have two fees involved: there is the initial fee for buying the bank gift card (e.g. $4.95 for a $500 card) and then the fee for buying a reload card (e.g. $3.95 or $4.95 for a $500 card).  Make sure these fees are worth it before doing this!

4. Load a Target Amex card with bank gift cards

Full details of this technique can be found here: The 5X everywhere backup plan

5. Load an American Express Campus Edition card

The American Express Campus Edition prepaid card can be loaded at the register at Barnes & Noble campus bookstores.  Find a card that offers a high multiple at bookstores, and you can earn points by reloading this card.  Yes, it works!  More details can be found here: American Express Campus Edition

Caution

5X Everywhere techniques often involve some risk and hassle.  Please see my post “5X dangers and headaches.”

Discussion

As shown above, there are quite a few ways to continue to earn “5X everywhere”.  In my talk, I described ways to take things ever further, but I’ll leave those details for another day and venue.  Is it worth the hassle?  That really depends on your tolerance for this stuff.  Yes, its possible to earn far more points with these techniques than without them, but at a cost of time and sometimes great frustration.  I’ll follow up soon with a post about putting 5X into perspective.

Is this a worthy alternative to Vanilla Reload cards? 

For many months, the following proposed experiment has been listed in the Frequent Miler Laboratory:

Amex Prepaid College Edition: Try to reload at campus Barnes & Noble using credit card or B&N gift card.

The American Express Campus Edition Prepaid Card is very similar to the American Express Prepaid card that I’ve written about many times (for example, see “One card to rule them all”).  However, this card is marketed towards University students and is distributed through Barnes & Noble campus bookstores.  Further, unlike regular Amex prepaid cards, these cards can be reloaded at campus bookstore registers.

I was interested in this card for a few reasons:

First, it is very easy to buy Barnes & Noble gift cards at a discount.  For example, currently GiftCardGranny.com lists many second-hand B&N gift cards for 12% off.  So, if it were possible to load the Amex with a gift card, one could essentially save 12% off everything! 

Second, this looked like a potential alternative to buying Vanilla Reload cards as a way to earn 5X everywhere (again, see “One card to rule them all”).  My thought was that one could buy Vanilla Visa cards (not reload cards) for 5X points, and use them to load these Amex cards.  The advantages of moving value from the Visa cards to these would be: 1) The Amex cards would be registered to your name and address and so could more easily be used online; 2) The Amex cards permit ATM withdrawals; and 3) The Amex cards are reloadable and can hold more value so you won’t risk being stuck with multiple cards with very small balances.

Preparing for the experiment

I ordered a free Campus Edition card via the Amex website.  Weeks later, I received an email saying the following:

Dear Frequent Miler,

Thank you for choosing the American Express Campus Edition Card. Unfortunately, we could not complete your order 12345 for the following reason:

undefined

I called to ask what was up and was told that sometimes they have errors in the system that checks your identity.  The call center agent told me to simply try again.  So I did.  Weeks later I received the same error: undefined.  So, I tried a third time.  Finally, it was approved!

Dear Frequent Miler,

Congratulations! Your American Express Campus Edition Card has been approved. We are processing your order and we will send you an e-mail when your Card is shipped. Please activate your Card once you receive it.

I received the card in the mail about a week later.  I then ran out to buy a Barnes & Noble gift card, and a $500 Prepaid Visa for this experiment.  Just for the heck of it, I also tried to use a Vanilla Reload card to load money to this card, but it didn’t work.

Campus bookstore experiment

I stopped by my local campus B&N bookstore to conduct this experiment.  I handed my reloadable Amex card to the cashier and told her I’d like to load money to it.  She stared at me blankly then told me that they could only load Barnes & Noble gift cards.  I told her how this was supposed to work, but she didn’t believe me.  Was there anyone else here who could help me?  No.  Finally, I brought her over to the enormous American Express Campus Edition display in the center of their store to show her that American Express, at least, believes that these cards can be loaded at the register.  Finally she was willing to give it a try.

The cashier fiddled with the register for a bit until I suggested that she simply swipe my card and see what happens.  She did so and then was prompted to ask me how much I wanted loaded to my card.  I stupidly hadn’t looked up the maximum load amount beforehand.  I suggested $1000 (the actual maximum is $500).  She balked and said that with gift cards the most they could do was $200.  I suggested she try $500 anyway, but she seemed too scared to do so.  I gave in and agreed to $200.

I was charged a $3.95 load fee, so the total came to $203.95.  I handed the cashier my $25 B&N gift card and asked her to use that first for payment.  She didn’t hesitate, but after several attempts she decided that the register wouldn’t allow it.  I swiped my Vanilla Visa instead.  That time, it processed without issue.

Results

From the limited experiment I ran, I now believe the following to be true:

• No, you cannot load Campus Edition prepaid cards with B&N gift cards
• Yes, you can load Campus Edition prepaid cards with credit cards, including prepaid cards and Visa/MC/Amex gift cards.

Of course, results may vary at other locations.

Card limits and fees

Here is some useful information about the card:

• No annual or monthly fees
• First ATM withdrawal per month is free (other than the fee charged by the ATM owner).  All other ATM withdrawals cost $2.
• At campus bookstores, you may load any amount from $25 to $500 onto your Card.  It appears that you must be at a campus bookstore, not at just any Barnes & Noble store (although I didn’t test that theory).
• When loading the card at a campus bookstore, you will be charged a $3.95 fee.
• The FAQ specifically says that bookstores may accept credit, debit or cash.
• You cannot exceed a balance of $1,000 at anytime.
• You cannot use a credit card to load the prepaid card online.  You can only do this at a campus bookstore.
• Just like other American Express prepaid cards, these cards cannot be used for debit transactions despite the fact that you are given a PIN code.  The PIN is for ATM use only.

For more information, you read the Campus Edition FAQ here.

Leveraging the deal

Citi Forward: The Citi Forward card automatically gives 5 points per dollar for all bookstore purchases.  It would be very interesting to see if the Forward would give 5X for loading the campus addition card.  Be very careful though: Citi is much more aggressive than any other bank in treating transactions like these as cash advances.  If it treats this as a cash advance, then you won’t get points and, worse, you’ll be charged hefty fees.  Anyone up for trying this experiment?

5X everywhere: Another use for this prepaid card is for people who want to do the “one card to rule them all” trick, but can’t find Vanilla Reload cards in stock.  The alternative here is to buy $500 Vanilla Visa cards at office supply stores (Office Depot usually carries them) and then use those cards to load the Campus Edition cards at a campus bookstore.  Note that with this approach you would be paying more than twice as much as with a Vanilla Reload card.  Vanilla Reload cards cost only $3.95 each and there is no further fee to apply the value to a prepaid card.  Vanilla Visa cards, on the other hand, cost $4.95 each and then there is a $3.95 fee to use the card to load up the Campus Edition card.  So, if you buy and load a $500 card, you will have spent 1.78% of its value in fees. 

6X everywhere: Similar to the 5X everywhere plan, you could use the Blue Cash Preferred card (which gives 6% cash back for groceries) to buy $500 Visa cards at a grocery store.  Or, you could use one of the American Express Hilton cards which give 6X points at groceries, drug stores, and gas stations to do the same.  Then, you could go to a campus bookstore to move the money from the Visa card to the Campus Edition Amex card.  Keep in mind that you will incur multiple fees amounting to at least 1.78%.  If you buy and load smaller amounts, your fee percentage will be higher.  Also, keep in mind that if your goal is to cash out via ATMs, ATM fees will add to your costs.

Liquidate small gift cards: Visa, MasterCard, and Amex gift cards can be a hassle to use, especially when their value drops low.  If you have a number of gift cards like this, you could theoretically ask to load $500 to the Campus Edition Amex and use multiple bank gift cards to pay for it.  I didn’t specifically test this scenario, but I believe it would work.  Once you’ve moved the value to the Campus Edition Amex you can cash out via ATMs.

Is it worth it?

The hassle factor with this opportunity is pretty high.  First, you need to have ready access to a campus B&N bookstore.  Second, you may need to overcome the fact that cashiers have no idea how to handle these cards.  Third, the $1000 balance limit on these cards make them a far cry from being the “One card to rule them all.”  There are certainly better deals out there, but for some people, and under some circumstances, this still could be a good deal.

Now that Barnes & Noble is back to 10X in the Ultimate Rewards Mall (see “Ultimate Rewards Mall June Edition”), this trick is once again viable.  I first wrote about this on March 23rd in the post “How to buy Ultimate Rewards Points for less than a penny each.”  Today I’ll rehash the same stuff with minor updates.

Prerequisites

To get in on this deal, you need a Chase Sapphire Preferred credit card and the intention of keeping it at least until annual dividends are paid in early 2013. You also need an American Express business credit card with OPEN Savings.

Benefits

• Earn Ultimate Rewards points at a very low cost!
• Increase spend on your American Express business card.  This can be a great boon if you are working off a minimum spend requirement for a sign-up bonus, or if you’re working towards a big-spend bonus.

Risks

• The trick here involves going through the Ultimate Rewards Mall to Barnes & Noble for 10 points per dollar, but paying with your Amex business card. Does this work? Usually, yes. See my post “Ultimate Question” for more. However, there is a real risk of not getting points so do this only if you accept that risk. The reason you need to pay with your Amex business card is that this trick relies on the 5% cash back you’ll get from the Amex OPEN Savings program that is available only to Amex business cards.
• Another risk is the possibility of PlasticJungle lowering the rates that they give for Barnes & Noble gift cards. The current rate of 81 cents to the dollar has held steady now for many months, though, so I believe this risk to be low. However, if many readers start doing this, they may indeed lower the offer.  The easiest way to view current rates is to view this spreadsheet from PlasticJungle.  Technically, this is PlasticJungle’s volume seller price list, but they usually offer the same prices to individuals.
• Finally, TopCashBack may, at any time, lower the cash back given for PlasticJungle sales.

If you’d like to proceed despite the risks, here’s what to do:

1. Buy a Barnes & Noble gift card:

• Log into the Ultimate Rewards Mall with your Sapphire Preferred account and click through to Barnes & Noble
• Add a single $200 physical gift card (not an e-card) to your shopping cart.
• Check out and pay with your American Express business card (make sure it has OPEN Savings). The total should come to $200.95

2. Once you get the gift card, sell it:

• Log into TopCashBack and click through to PlasticJungle (TopCashBack will give you 4% cash back for selling gift cards to PlasticJungle)
• Sell your Barnes & Noble gift card to PlasticJungle for 81% of its value.

3. Add it up:

Here is how the math works out with the purchase and sale of a $200 gift card:

• Total expenses: $200.95
• Total rebates: $178.53
  • OPEN rebate: 5% of $200.95 = $10.05
  • PlasticJungle Payment: $162
  • TopCashBack rebate: $6.48
• Total cost: $200.95 – $178.53 = $22.42
• Total points earned: 2352
  • Ultimate Rewards: $200.95 X 10 = 2010 + 7% annual dividend = 2151
  • American Express points = 201
• Total cost per point = $22.42 / 2352 = .95 cents per point.

Notes

• The type of points earned from American Express depends on which card is used for purchasing the gift card. For example, you might earn SPG points, Membership Rewards points, Delta Skymiles, etc. If you use a card that gives more than 1 point per dollar (such as the Hilton Surpass), then you will obviously earn more points with this approach.
• Theoretically you could make many individual purchases in this way. Don’t be surprised, though, if you get a call from Barnes & Noble investigating this “suspicious” activity.
• Barnes & Noble terms in the Ultimate Rewards Mall say “Special increased earnings now through 6/30/2012” so the deal may expire at the end of this month.

Disclaimer

There are several risks as shown above. As always, proceed at your own risk.

Related Posts and Links

• How to buy Ultimate Rewards Points for less than a penny each
• Can you use a non-Chase card in the Ultimate Rewards Mall?  See: Ultimate Question
• Sign up for TopCashBack (referral link)
• Sign up for PlasticJungle (referral link)

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This past Saturday I posted a great offer: Up to 14.5% off Amazon and Barnes & Noble.  This week only, OfficeMax has a deal where you can buy two $25 Nook or Kindle gift cards and get $5 back.  That alone amounts to a respectable 10% discount. Since the cards can be used at Amazon.com and Barnes & Noble, respectively, this is a great deal.  Depending upon how you pay for the cards, you can do even better:

• American Express business card with OPEN Savings: 5% back on purchases of $100 or more at OfficeMax (until June 15).
• Chase Ink: 5 points per dollar at office supply stores
• American Express SimplyCash card: 5% cash back for office supplies plus 5% back with OPEN Savings.  That amounts to a 19% total discount!

Visits to OfficeMax on Sunday were mostly disappointing.  OfficeMax hadn’t yet figured out how to actually ring up these discounts.  A few people managed to get the discounts anyway, but others left empty handed.

Problem fixed

OfficeMax fixed their register issue.  They now have a sheet of paper with a bar code that applies the discount when scanned.  I’ve heard from a number of people who have successfully bought a bunch of gift cards with this discount.  A few stores limited people to no more than 6 cards, but most stores had no limit.  I walked out of a local OfficeMax yesterday with 40 gift cards!  Today, my mom (AKA Mom Miler) bought 20 cards at an OfficeMax near her!

Finding cards

The main problem you’ll face now is that many stores are sold out.  I highly recommend calling before making a trip.  Once in the store look near the e-book reader displays as well as at the gift card rack.  They tend to put e-book gift cards in both places.  Also, ask a manager if there are any more.  I only found 8 in the store before I asked a manager who dug up 32 more for me!

Which card to use?

If you have the SimplyCash card, that’s clearly the best option.  Otherwise, the Ink and the Amex business card options are very close.  With the Amex cards you get 5% back plus the usual 1 point per dollar from your card.  With the Ink you get just the 5 points per dollar.  If you value points at the Fair Trading Price of 1.31 cents each, then each option is about the same.  Go with whichever card gives you points that you value the most.

A reader who goes by bitachu tipped me off to this upcoming OfficeMax sale.  Starting tomorrow and until May 12th, you can buy Amazon Kindle or B&N Nook gift cards for 10% off.  Specifically, they advertise that you will save $5 when buying two $25 gift cards.  This is interesting because, I believe that Kindle gift cards can be used for any Amazon.com purchases and that Nook gift cards can be used for any Barnes & Noble purchases.

Double dip the discounts with OPEN or Ink

It’s not clear yet whether OfficeMax will have a per person limit, but if they allow at least 3 sets to be bought at once, you can increase the discount by using an American Express business credit card with OPEN Savings.  This will give you a 5% statement credit for all OfficeMax purchases of $100 or more.  It’s nice of OfficeMax to offer this deal before the in-store OPEN Savings benefit goes away as I reported yesterday.  When you stack a 10% discount with a 5% discount, the total discount comes to 14.5%.  Not bad!

Alternatively, use a Chase Ink credit card to get 5 points per dollar at office supply stores!

I’ve been meaning to write about this for a while, but it kept slipping my mind.  Remember when Barnes & Noble was 10 points per dollar in the Ultimate Rewards Mall?  During that time, I did a little experiment.  As a B&N member, I had received a coupon for $50 off a Nook Color.  We are a Kindle household, so rather than buy a Nook I thought I could turn this opportunity into points.  Here’s what I did:

• I listed the Nook on EBay before buying it.
• Once the Nook sold, I went through the Ultimate Rewards Mall to buy a B&N e-gift card for myself for just a little bit less than the Nook was going to cost me.  The reason for buying the gift card was that the Barnes & Noble terms & conditions made it unclear whether I’d receive points when using a coupon.  However, I knew from experience that I’d receive points for buying the gift card.
• To buy the gift card, I used an American Express business card in order to get 5% cash back from the OPEN Savings program.
• I went through the Ultimate Rewards Mall again to buy the Nook.  I knew they wouldn’t give me points for the part of the purchase using the gift card, but I hoped to get points for the extra amount above the gift card value.
• I picked out the Nook and applied the $50 coupon.
• I addressed the shipment to my EBay buyer.  Thanks to my B&N membership, shipping was free.
• When it came time to pay, I used up my gift card and had a remaining charge of a few dollars.  By total coincidence, B&N and MasterCard were running a promotion that day in which you would get a $25 gift card for buying a Nook with a MasterCard.  Well, why not?  So, I used my Ink Old MasterCard to pay the remaining few dollars.

Results:

• My EBay customer was happy.
• I received the full 10X points for buying the gift card (as expected).
• I received 5% back from Amex OPEN Savings (as expected).
• I saved $50 thanks to the Nook coupon (as expected).
• I received 10X points for the little bit of the Nook that was paid for with the Mastercard.
• I received the $25 gift card!  I didn’t expect that!

After factoring in EBay seller costs, I made a little bit of money on the deal and received the full 10X points.  Not bad!  Sure, it’s not quite as good as Amazon paying me for collecting BA miles, but I’ll take it!

Now to drop ship stuff from Office Depot for 15X…

NOTE: PLEASE SEE WARNINGs ABOUT DANGERS OF DROP SHIPPING IN THE COMMENTS SECTION OF THIS POST

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April 1st kicks off with a cruel joke from Chase.  Many of the big bonus point offers in the Ultimate Rewards Mall have dropped precipitously.  Below are some of my findings this morning when logged in with my old Ink Bold and my Sapphire Preferred (note that you may see different results with a Chase Freedom).

First, the good news:

• Office Depot: 10X Ink Bold; only 4X Sapphire Preferred
• Kohl’s: Still at 10X for both cards
• Nordstrom: 10X Sapphire Preferred (only for 3 days)
• Drugstore.com: 10X Sapphire Preferred; only 5X with Ink Bold

The exciting news here is the Office Depot 10X opportunity.  Since the New Ink Bold offers 5X automatically when used in office supply stores, you will get a total of 15X when making Office Depot purchases with your Ink card through the UR mall!  Last I checked, though, there were no merchant or bank gift cards available online (also the T&C says “not eligible on purchases of gift cards”).  If they begin to offer free after rebate products, though, this could be a big win.  It might even be worth filling out rebate cards for 15X!

And now the bad news (very bad):

• Staples: down to 2X (from 4X).  Noooooooo!!!!!  The perfect PPM may still be perfect, but for fewer points.  And for those of you who have been buying gift cards with your Ink card for a total of 9X, the total is now down to 7X.  Nooooooo!!!!
• Barnes & Noble: down to 2X (from 10X).  No longer can you buy ultimate rewards points for less than a penny.  Nooooooo!!!!
• Home Depot: down to 4X (from 10X).
• Magazines.com: down to 25X (from 40X).
• Sears: down to 4X (from 5X on the Ink).
• Lands End: down to 2X (from 5 or 6X)

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Last month I wrote a post titled “How to buy Ultimate Rewards points for 1.05 cents”.  The scheme involves using an Amex business card to buy Barnes & Noble gift cards through the Ultimate Rewards Mall where you gain 10 points per dollar. Next, you sell the gift cards for a slight loss, but the points gained make up for the loss.  In my original write-up I hadn’t properly taken into account gift card shipping fees charged by Barnes and Noble.  It turned out that the real cost for points came to 1.10 cents each if you limited your purchases to one $200 physical gift card at a time.

A new discovery has changed the math for the better.  As I mentioned a couple of days ago, a reader told me about TopCashBack which offers 4% back for selling gift cards to PlasticJungle.  Previously I had advocated using ShopAtHome for 1.6% back.  This new finding sweetens the pot considerably!

Prerequisites

To get in on this deal, you need a Chase Sapphire Preferred credit card and the intention of keeping it at least until annual dividends are paid in early 2013.  You also need an American Express business credit card with OPEN Savings.

Risks

• The trick here involves going through the Ultimate Rewards Mall to Barnes & Noble for 10 points per dollar, but paying with your Amex business card.  Does this work?  Usually, yes. See my post “Ultimate Question” for more.  However, there is a real risk of not getting points so do this only if you accept that risk.  The reason you need to pay with your Amex business card is that this trick relies on the 5% cash back you’ll get from the Amex OPEN Savings program that is available only to Amex business cards.
• Another risk is the possibility of PlasticJungle lowering the rates that they give for Barnes & Noble gift cards.  The current rate of 81 cents to the dollar has held steady now for many months, though, so I believe this risk to be low.  The easiest way to view current rates is via GiftCardGranny.
• Finally, I have no experience with TopCashBack.  Are they reliable?  Only time will tell.

If you’d like to proceed despite the risks, here’s what to do:

1. Buy a Barnes & Noble gift card:

• Log into the Ultimate Rewards Mall and click through to Barnes & Noble
• Add a single $200 physical gift card (not an e-card) to your shopping cart.
• Check out and pay with your American Express business card (make sure it has OPEN Savings).  The total should come to $200.95

2. Once you get the gift card, sell it:

• Log into TopCashBack and click through to PlasticJungle (TopCashBack will give you 4% cash back for selling gift cards to PlasticJungle)
• Sell your Barnes & Noble gift card to PlasticJungle for 81% of its value.

3. Add it up:

Here is how the math works out with the purchase and sale of a $200 gift card:

• Total expenses: $200.95
• Total rebates: $178.53
• OPEN rebate: 5% of $200.95 =  $10.05
• PlasticJungle Payment: $162
• TopCashBack rebate: $6.48
• Total cost: $200.95 – $178.53 = $22.42
• Total points earned: 2352
  • Ultimate Rewards: $200.95 X 10 = 2010 + 7% annual dividend = 2151
  • American Express points = 201
• Total cost per point = $22.42 / 2352 = .95 cents per point.

Notes

• The type of points earned from American Express depends on which card is used for purchasing the gift card. For example, you might earn SPG points, Membership Rewards points, Delta Skymiles, etc. If you use a card that gives more than 1 point per dollar (such as the Hilton Surpass), then you will obviously earn more points with this approach.
• Theoretically you could make many individual purchases in this way.  Don’t be surprised, though, if you get a call from Barnes & Noble investigating this “suspicious” activity.
• Barnes & Noble has offered 10X bonus points via the Ultimate Rewards Mall for several months now, but the terms say “Special increased earnings now through 3/31/2012!” so the deal may expire soon.

Disclaimer

I have not yet tried this trick all the way through.  There are several risks as shown above.  As always, proceed at your own risk.

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UPDATE: Once you factor in shipping charges, the real cost per point is 1.1 cents.  See comments section for details.

Barnes & Noble is currently running a promotion in The Ultimate Rewards Mall in which they’ll give 10 points per dollar for purchases (including gift cards).  At the same time, the American Express OPEN Savings program (which comes with American Express business cards) gives 5% back for Barnes & Noble purchases.  If you have an Amex OPEN card and a Chase Sapphire Preferred card, you can combine these deals to get a fantastic rebate from shopping at Barnes & Noble.  If your goal, though, is not to buy books or Nooks, then consider the following approach to buy Ultimate Rewards points (and a few Amex points):

1. Buy a Barnes & Noble gift card:

• Log into the Ultimate Rewards Mall and click through to Barnes & Noble
• Add a physical gift card (not an e-card) to your shopping cart.
• Check out and pay with your American Express business card (make sure it has OPEN Savings).

2. Once you get the gift card, sell it:

• Log into ShopAtHome and click through to Cardpool.com (ShopAtHome will give you 1.6% cash back)
• Sell your Barnes & Noble gift card to Cardpool.com for 81% of its value

3. Add it up:

Here is how the math works out with the purchase and sale of a $100 gift card:

• Total expenses: $100
• Total rebates: $87.60
• OPEN rebate: $5
• ShopAtHome rebate: $1.60
• CardPool payment: $81
• Total cost: $100 – $87.60 = $12.40
• Total points earned: 1170
• Ultimate Rewards: $100 X 10 = 1000 + 7% annual dividend = 1070
• American Express points = 100

Total cost per point = $12.40 / 1170 = 1.05 cents per point.

Notes

• ShopAtHome will not send you a rebate check until you have earned $25.  If you calculate the costs without the ShopAtHome rebate, the cost rises to 1.2 cents per point (which still isn’t bad!)
• The type of points earned from American Express depends on which card is used for purchasing the gift card.  For example, you might earn SPG points, Membership Rewards points, Delta Skymiles, etc.  If you use a card that gives more than 1 point per dollar (such as the Hilton Surpass), then you will obviously earn more points with this approach.

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