Sears sells other retailer gift cards, after all.

Well, well, look at that. Sears does sell gift cards (other than their own) after all. I’ve written a couple of posts recently about how to buy miles cheaply by buying Sears gift cards through the Ultimate Rewards 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 you need to go to the physical store and buy a more valuable gift card with your Sears gift card. The reason this is tricky is that if you ask a manager at Kmart, they’ll tell you that buying gift cards with gift cards is not allowed. However, if you simply bring the gift card to a register and if the clerk is willing to try swiping your gift card for payment, it seems to always work. Another issue is that not everyone has a Kmart near them. So, today after lunch I wandered around my local Sears with my eyes open for gift card racks. Just as I was ready to give up, I found what I was looking for deep in the bowls of Sears, near the hardware department. Unfortunately, there were no gas cards to be found (these are quite valuable), but I did find some EBay cards. So, as an experiment, I brought a $50 EBay card up to the nearest register and blatantly held out my Sears gift card to make my intentions clear. The clerk noticed and said “you have a coupon? Oh, I see it’s a gift card.” And, without further comment, he rang up the EBay card, asked me to swipe my gift card, and soon enough I was on my way out of there.

So, what can I do now with an EBay card? Well, I could practice the art of Gift Card Harvesting, but that is way more effort than I’m willing to spend. Instead, I’ll probably use it to buy another gift card, but one that can be sold easily (via PlasticJungle, for example) for more than a Sears card can. Please note the risks: readers have reported being swindled by EBay gift card sellers (and buyers). Also at least one reader has reported being swindled by PlasticJungle. So far, my experiences in both areas have been without issue, but I can only hope that it will stay that way!

In case you can’t read the blurry photo above, here are the merchant gift cards I found: Applebees, Maccaroni Grill, Outback, Amex, Chili’s, IHop, TGI Fridays, Subway, Ruby Tuesday, Barnes & Noble, Bass Pro Shop, Cracker Barrel, Pizza Hut, EBay, and one more that I can’t identify (with a picture of ice cream on it).

This Perpetual Point Machine is best with two people working together.

In previous posts (such as this one), I defined the Perpetual Point Machine (PPM) as “a scheme in which, after a little push, hotel points and/or airline miles are accrued over and over again, forever, with little or no additional work or money.” We have yet to identify a perfect PPM, but it has been fun and rewarding pursuing it. Today I’ll describe a PPM that requires a little team work.

Gift Card Harvesting

Yesterday, I showed how it is possible to grow the value of gift cards over time (see Gift Card Harvesting). The idea is to buy Sears gift cards, use them to buy EBay gift cards at Kmart, and then use the EBay gift cards to buy discounted Sears gift cards. With the addition of 2% back in EBay Bucks, you will end up with more money than you started with! There are a few problems with this technique, though: 1) Not all Kmart stores / cashiers allow buying gift cards with gift cards; 2) Not all EBay gift sellers are honest (they can sell you a gift card with $0 balance, for example); and 3) There is no guarantee that Sears gift cards will be available to buy on EBay (especially if a lot of people start doing this trick!). I will explain soon how these issues can be overcome, but first let me remind you of another scheme:

Buying Miles

Last week, I wrote a post about how to buy miles cheaply (see Buy Miles for 1.2 Cents or Less). The idea there was to buy Sears gift cards for 6 to 10 extra points per dollar through the Ultimate Rewards Mall, then use them to buy more valuable gas cards (BP, for example) at Kmart, and then sell them through a service like PlasticJungle. As with Gift Card Harvesting, there are a few problems with this technique: 1) Not all Kmart stores / cashiers allow buying gift cards with gift cards; 2) From reader comments, it seems that not all Kmarts carry gas cards; and 3) Some people have reported having very bad luck with PlasticJungle. Now let’s see a way to overcome these issues:

Working Together

To make this PPM viable, you need two people: a gift card harvester and a mile buyer. The gift card harvester needs to live or work near a Kmart that carries EBay gift cards and is willing to let you buy them with Sears gift cards (Kmart is owned by Sears and their gift cards are interchangeable). So, this PPM doesn’t avoid the problem of finding a way to buy gift cards with gift cards, but only one person in the scheme needs to be able to do so. Both people need EBay accounts (you must be at least 18 years old to have one).

Here is what to do:

Step 1: Both Buy Sears Gift Cards through the Ultimate Rewards Mall

On December 9^th, all Sears’ purchases through the Ultimate Rewards Mall are awarded 10 points per dollar. This is the day to buy them! The mile buyer, in particular, must make sure to buy the highest $ value cards allowed ($500 each).

Step 2: Gift Card Harvester (GC Harvester) upgrades Sears gift cards to EBay cards at Kmart

See this post for more details about this step.

Step 3: Mile Buyer lists a $500 Sears Gift Card for sale on EBay

Set the “Buy it Now” price at $490 (or whatever amount both of you agree to).

Step 4: GC harvester buys the gift card through EBay

The gift card harvester needs to be ready to go as soon as the Sears card is listed because you don’t want anyone else to snatch it up! By selling a high dollar value item at a fixed price, the seller saves a bit on EBay seller fees. In this example, if the card is sold for $490, the buyer will get $442.59 after EBay and Paypal fees are factored in. This is 90.3% of the selling price or 88.5% of the card’s face value. Remember though, that the Sears cards were bought through the UR Mall and with a rewards credit card (ideally the Chase Sapphire Preferred). This way, the buyer receives 11.49 points per dollar spent on Sears gift cards. Since points are worth more than a penny each, the mile buyer comes out ahead. Meanwhile, the gift card harvester has just increased the value of the gift card by $19.80 ($10 by buying at a discount and $9.80 in EBay Bucks).

Step 5: Delivery

One of the hidden fees in selling things on Ebay is the cost of shipping whatever you sell. Ideally, the friends working together on this PPM live or work near each other and can simply hand over the purchases. This way, shipping fees are nonexistent and there is no danger of losing things in the mail.

Step 6: Repeat

Steps 2 through 5 can be repeated until the Mile Buyer has sold all of his/her gift cards. Note that EBay only allows you to list one gift card for sale at a time so you really do need to do this sequentially. If you want to go back to step 1 and buy more Sears cards, note that the value of buying gift cards will drop after December 9^th (probably back to 6 points per dollar). I expect (and hope!) that there will be more 10 point promotions in the future, though.

Variations

The mile buyer can do even better with this PPM if he/she becomes a “Top rated seller” on EBay. In this way, they will get discounted fees and so earn more with each transaction. The rules for becoming a top rated seller can be found here: http://pages.ebay.com/help/sell/top-rated.html

You might be tempted to play both parts of this PPM yourself. You could theoretically open two EBay accounts under different names and do it all. I would advise against that, however. I’m pretty sure it would violate EBay rules and maybe even break a law or two. You really don’t want to risk getting caught with something like this.

Analysis

I think this PPM is viable, but I have to admit I haven’t tried it. I’m new to EBay so there could be additional “gotchas” that I haven’t thought about. I also don’t think the rewards here necessarily justify the effort involved. Most of the risk and work is on the side of the Gift Card Harvester so that person really needs to think about whether it is worth it to them. Let us know in the comments below what you think. Are you going to play this two player PPM?

Ultimate Rewards

Many schemes I have (and will) publish require access to the Ultimate Rewards Mall. In my opinion, the best option for getting access to the mall is the Chase Sapphire^SM Preferred Card. If you don’t already have one, you can sign up with this link. Even if you don’t want to try any Frequent Miler schemes, 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.

With a green gift card thumb, you can grow the value of your gift cards over time.

Buried deep in the comments section of an old, no longer viable Frequent Miler post, a reader tossed out a little nugget of information that I found quite amazing. He had bought Sears gift cards and had found a way to grow their value over time. I didn’t publish his idea right away for a few reasons. First, I wanted to try it out myself to make sure the technique works. I’ve tried it, and yes I can confirm that it works! Second, I was concerned that publishing the idea would destroy it. Fortunately, I believe I have a solution to that issue, which I’ll explain at the end of this post.

Overview

The idea is to buy Sears, Kmart, or Lands’ End gift cards (they are interchangeable) and get bonus miles for the purchase. Next, upgrade the gift cards to EBay gift cards (details below). Then, on EBay, buy discounted Sears, Kmart, or Lands’ End gift cards. Rinse and repeat. Details of each step follow:

Step 1: Buy Sears, Kmart, or Lands’ End Gift cards

Since Kmart and Lands’ End are owned by Sears, their gift cards are all interchangeable. The best way to buy these gift cards is through Chase’s Ultimate Rewards Mall. The UR Mall gives 6 extra points per dollar spent at Sears and Kmart, even for gift card purchases. Even better, on December 9^th, the UR Mall will give 10 extra points per dollar for Sears’ purchases! If you value UR points very conservatively at 1.5 cents each, then this is like a 15% rebate! So, my recommendation is to buy Sears gift cards on December 9^th through the UR Mall.

Fine print:
1. When shopping through the UR Mall, Sears will give you points for either buying or using gift cards. Kmart will give you points for buying gift cards, but not for using them. Lands’ End claims that it will not award points for gift card purchases, but is silent on whether the use of gift cards qualifies. The bottom line is that I can vouch for the fact that Sears and Kmart will award points for buying gift cards and I can vouch for the fact that using them through Sears will also get you points. Try any other combination at your own risk. Also note that these rules may change at any time.

2. No tax, delivery, or service fees are charged for gift card purchases

3. This technique will work with either physical or e-gift cards, but physical cards are a bit easier to use at Kmart (see step 2).

Step 2: Upgrade to EBay Gift Cards

Take your Sears/Kmart/Lands’ End gift cards to Kmart and search for their gift card rack. Note that Kmart often has multiple gift card racks and they’re not all created equal! Some racks have better selections than others. Your goal is to find the rack that has EBay gift cards. If your local Kmart doesn’t sell these, then you’re out of luck. If you do find them, take them to the checkout counter and pay for them with your Sears/Kmart/Lands’ End gift cards.

Fine print:
1. A number of people have told me that they have called their local Kmart and were told that you can’t buy gift cards with gift cards. All I can do is verify that this has worked at my local Kmart (Ann Arbor, MI), but it depends which cashier I go to!  It’s worth noting two things: Amex gift cards do not work (the register will reject gift cards as payments for them), but others I’ve tried (EBay and BP cards) do work. Also, I once had a clerk say “ooh, I don’t know if this will work”, but when she swiped my gift card in the register, it worked fine. So, if you’re at the register and you are told that you can’t buy gift cards with gift cards, ask them to give it a try just in case.  If they refuse, try again another day with a different cashier.

2. If you use e-gift cards, Kmart requires a manager override for using them at the store. This can cause a long delay which can be especially painful if you have irate customers waiting in line behind you. I highly recommend going to Kmart early in the morning or some other time when few customers are there!

Step 3: Buy Sears / Kmart / Lands’ End Gift Cards at a Discount

Now that you have a pile of EBay gift cards, you can shop online at EBay.com and use the gift cards as payment. The trick here is to find Sears, Kmart, or Lands’ End gift cards being sold at or below face value, and with free shipping. Make sure you are signed up for the “EBay Bucks Rewards Program”. This way, 2% of all of your purchases will be rebated to you in the form of EBay bucks. You can use the EBay bucks to buy more gift cards!

Step 4: Repeat

Go back to Step 2 and do it all again. You can repeat this process indefinitely. With each cycle, your gift card stash will grow by 2% or more. This may seem like a lot of effort for very small gain, but I would estimate that once you get used to this you can earn a minimum of $20 for a half hour of work (harvesting $1000 of gift cards). If you are able to find gift cards through EBay for less than face value, then your half hour income will be considerably more. This could be a great part time job for a teenager if you have a nearby Kmart and if you’re willing to let them use your EBay account (EBay users are required to be at least 18 years old).

Step 5: Cash Out

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.

Supply and Demand

Some of you have already realized a potentially fatal flaw in this whole scheme. The fact that I have published this process means that more people will start doing it and will therefore drive up competition for Sears gift cards on EBay. Pretty soon it will be impossible to find any gift cards at or below face value. So, what is the solution? Tomorrow I will publish a complimentary scheme in which people will profit from selling Sears gift cards on EBay. This way, we will hopefully simultaneously drive up both supply and demand. In fact, it should be possible to team up with a friend or relative to ensure that both a buyer and seller exist. Stay tuned for more!

Ultimate Rewards

Many schemes I have (and will) publish require access to the Ultimate Rewards Mall. In my opinion, the best option for getting access to the mall is the Chase Sapphire^SM Preferred Card. If you don’t already have one, you can sign up with this link. Even if you don’t want to try any Frequent Miler schemes, 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.