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Here is a list of lessons I've learned using visa gift cards, dealing with loss, fraud, and other practical matters. Hopefully, others with find this useful.

Top uses of gift cards:
-Everyday spend
-Bills, cable, gas, water, insurance (overpay when possible)
-Taxes, IRS, property tax
-Online payment systems
-Giftcard Granny and CashBack portals to stack.

Purchasing:
-I purchase in my neighborhood grocery story, most cashiers know me by site and let me purchase a few at a time. I've only run into hassle in less affluent locations of the chain.
-When stacking is available, I'll visit several times a day.
-With the friendly cashiers I'll tell them what I do, some of them have told me they've started paying their property taxes and are very pleased.

Draining:
-Az pmts
-Square for small values~$40 a quarter.
-Gas station for values less than $1, square/AZpmts won't take less than $1.
-Az gift cards for less than $1.

Records keeping:
-I keep every card in three stacks. used, reviewed, archived
-Used are for cards with a small residual value.
-Reviewed are cards I've drained through AZ, square or gas station.
-Archived are cards I've let sit for several months to ensure all charges have been posted. Sometimes there is a latent residual value that will pop up even on drained cards. I cut and paste the activity of the archived cards into and excel spread sheet for tax purposes.


Fraud, loss, and other buffoonery.
-I purchase regularly from a major grocery chain. I've experienced fraud once and a misplacement of $5k worth or cards.
-Someone scratched out the number of my card, and somehow drained the value after I purchased. For the fraud I called the grocery store gift card hotline (not the visa hotline). Grocery store department opened a fraud case for me and I had a replacement card within 10 days. To avoid fraud, make sure the card you purchase is in a unmarred package that is exactly like every other card on the rack.
-The loss of $5k in cards was painless. I had the receipt, I called the hotline, verified my identity and the card used. The person on the hotline did some investigation and gave me the numbers and balance, which I used to pay taxes. If I needed the physical card I would have used their case file, and my receipt to have Visa re-issue me the card.
Bottom line: keep receipts, shop at a reputable store and don't panic. Don't call visa hotline, until you've solved the problem on the grocery store end. Also the actual store won't be as helpful as the corporate hotline. I was very impressed with the customer service I got in my cases.

Stacking rewards:
-The regional branch of my national chain used to send a Cash Back check, then phased that out for gasoline rewards. I have traveled to other regions and purchased gift cards from another branch and did receive the rewards check at the end of the quarter.

Registering cards for online:
-usually I do not, but many merchants require it. If the card is initially rejected, I'll then go and register it and then re-try the purchase.
-No need to register for AZ, IRS or property tax.

Purchase protection, returns, travel:
-If I purchase something I want extended warranty on, I use my regular credit card, AMEX rocks in this.
-Returns are sometimes a pain, if I've 'retired the card' sometimes I can get them to return to a different card, but often I'll have to dig in the archives to find the exact card.
-One time I got lucky at a home improvement store and they refunded nearly $500 in cash.
-For hotel, rental car, I give them typical credit card at check in and close out bill with gift card.

Please post your lessons or PM me with questions.

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edit: wrong thread

kvs25 (Jul. 02, 2013 @ 9:26a) |

Well I know of a way to buy these at 10% off face value & only 5% is from a CC, of course it requires jumping through a ... (more)

LOOPHOLE (Jul. 02, 2013 @ 9:45a) |

On my AMEX card I did a pay at the pump transaction and an in store purchase for the same visit this past weekend, both ... (more)

stanolshefski (Jul. 02, 2013 @ 9:46a) |

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and why did you do this?

wwon717 said:   and why did you do this?
"Manufactured spending" is my guess.

6% Cash Back on AMEX Blue Cash probably.

Rajin said:   6% Cash Back on AMEX Blue Cash probably.

Don't forget another 7% Cash Back via Kroger Fuel Points ($100 AMEX GC = 200 Fuel Points = 20 cents off 35 gallons of gas)

and how did you pay your rent/mortgage with visa gift cards?

Squeezer99 said:   and how did you pay your rent/mortgage with visa gift cards?

There are several websites that will pay rent/mortgage via credit card transaction. Most times the fee % is too high to make it worthwhile.

CptSavAHo said:   Squeezer99 said:   and how did you pay your rent/mortgage with visa gift cards?

There are several websites that will pay rent/mortgage via credit card transaction. Most times the fee % is too high to make it worthwhile.
buy vanilla reloads at CVS to bluebird

I learned a couple things too

1) my local supermarket (meijer) lets you use the remaining balance of a prepaid visa

2) gas stations might put holds on cards. $100 hold and the pump turned out to be broken.

So how much did you truly profit from these activities, combined, thus far?

This seems odd without a backstory. Or at least knowing how much you had to float...

Maybe offer to pay for everything in group situations and then get paid back in cash?

Scale? Savings?

I've been doing the same for about a year. Nets you at least 4% on all your CC purchases. Even more when you use Az pmts and/or if your grocery store has a rewards program.

Can you use a CVS GC to purchase a vanilla reload card at CVS?rufflesinc said:   CptSavAHo said:   Squeezer99 said:   a.buy vanilla reloads at CVS to bluebird

avalon6 said:   Rajin said:   6% Cash Back on AMEX Blue Cash probably.

Don't forget another 7% Cash Back via Kroger Fuel Points ($100 AMEX GC = 200 Fuel Points = 20 cents off 35 gallons of gas)


Kroger does not give fuel points for Visa/AMEX/Green Dot and other "cash equivalent" cards.

aleck said:   avalon6 said:   Rajin said:   6% Cash Back on AMEX Blue Cash probably.

Don't forget another 7% Cash Back via Kroger Fuel Points ($100 AMEX GC = 200 Fuel Points = 20 cents off 35 gallons of gas)


Kroger does not give fuel points for Visa/AMEX/Green Dot and other "cash equivalent" cards.


You just have to be creative. Shell Gas cards or Amazon cards available at Kroger, and these let you shift the spending from other things you would buy anyway with cash, and still earn their points, which can be as high as 4X the dollar value around Christmas season.

imsparty said:   Can you use a CVS GC to purchase a vanilla reload card at CVS?
Haven't tried this myself, but believe I've seen others report that their registers block purchase of GCs with store GCs. I'm assuming this applies to VR, as well.

aleck said:   avalon6 said:   Rajin said:   6% Cash Back on AMEX Blue Cash probably.

Don't forget another 7% Cash Back via Kroger Fuel Points ($100 AMEX GC = 200 Fuel Points = 20 cents off 35 gallons of gas)


Kroger does not give fuel points for Visa/AMEX/Green Dot and other "cash equivalent" cards.

This must depend on where you live.

dbond79 said:   aleck said:   avalon6 said:   Rajin said:   6% Cash Back on AMEX Blue Cash probably.

Don't forget another 7% Cash Back via Kroger Fuel Points ($100 AMEX GC = 200 Fuel Points = 20 cents off 35 gallons of gas)


Kroger does not give fuel points for Visa/AMEX/Green Dot and other "cash equivalent" cards.

This must depend on where you live.


Kroger has changed things in AZ. They used to give 4x fuel points on any gift card and then they eliminated any prepaid debit card. Now any promotion such as 4x or 2x has to be a restaurant. I bought $200 in eBay gift cards and only received 1x the points. The gravy train is eliminated.

So AMEX Blue gives 6% at grocery stores up to $6,000 per year (1% thereafter), but has a $75 annual fee. Figuring I can already get 2% back via other credit cards, the net value of AMEX Blue (assuming you max it out) is $165/yr ($6,000 x 4% - $75). Plus any grocery store rewards you might get.

bigdinkel said:   dbond79 said:   aleck said:   avalon6 said:   Rajin said:   6% Cash Back on AMEX Blue Cash probably.

Don't forget another 7% Cash Back via Kroger Fuel Points ($100 AMEX GC = 200 Fuel Points = 20 cents off 35 gallons of gas)


Kroger does not give fuel points for Visa/AMEX/Green Dot and other "cash equivalent" cards.

This must depend on where you live.


Kroger has changed things in AZ. They used to give 4x fuel points on any gift card and then they eliminated any prepaid debit card. Now any promotion such as 4x or 2x has to be a restaurant. I bought $200 in eBay gift cards and only received 1x the points. The gravy train is eliminated.

I actually hadn't read that closely. The regular 1x gas rewards (1k points = $1 off per gallon) work near me, in the east. I don't recall Kroger running 2x, 4x gas promos in this area. Other chains do, but typically exclude GCs like you say.

Kroger does not give fuel points for Visa/AMEX/Green Dot and other "cash equivalent" cards.

Interesting. I saw the sign that said that yet I have over 10,000 fuel points left over from last month.

jewsus said:   Kroger does not give fuel points for Visa/AMEX/Green Dot and other "cash equivalent" cards.

Interesting. I saw the sign that said that yet I have over 10,000 fuel points left over from last month.

Another interesting point, I bought a $100 Lowes card this weekend and got 400 FP. Haven't seen any 4x points advertised lately. YMMV...

With 6% BCP that's $20 off $100 at Lowes. Nice! Hope this means 4x on all retailer gift cards this month, haven't been back for another trip to the well yet.

Very interesting post. I've been going for a similar strategy recently. I had seen warnings against draining gift cards through AP, on the grounds that it closely resembles money laundering. I guess this actually doesn't raise suspicions.

I'm going to max out my Chase Sapphire Preferred's 5 pts/$ buying gift cards at drug stores this quarter, and if I find a good way to drain them, I'll do the same with my Citi Dividend card, which has a higher 5% limit (no, I haven't seen any Vanilla Reloads at my local CVS stores in San Francisco). I also have the AMEX BCP and will probably max it out or come close through a combination of grocery spend and gift cards.

Kroger in my area gives:

1x fuel points for the variable loads ($20-$500) visa/mc/AMEX.
2x for all other gift cards INCLUDING $25,$50 ,$100 visa/mc/AMEX gift cards
4x promo occasionally that also applies to the fixed value visa/mc/AMEX cards but not the variable loads .

With creative double/triple/quadruple dipping ....and you are looking at serious savings ...as much as up 30% of (enter your gift card name here) ...including Apple products...just saying.

To address a few questions:
I net around 10K a year doing this. Sometimes it is a pain in the ass, but it helps stretch my income.

Have found very difficult but expensive ways to pay mortgage/rent, but when the grocery store 4x rewards went away it did not make sense.

There are other ways to scale/manufacture spend but the point of this thread is to share practical information on using visa gift cards.

jewsus said:   Kroger does not give fuel points for Visa/AMEX/Green Dot and other "cash equivalent" cards.

Interesting. I saw the sign that said that yet I have over 10,000 fuel points left over from last month.

i got 500 fuel points just last week for a 500 card at the kroger near me. the standard for gift cards is 2x (which i do with AZ), but vari loads get 1x points where i am.

Drnoside said:   To address a few questions:
I net around 10K a year doing this. Sometimes it is a pain in the ass, but it helps stretch my income.

That's very decent... It also means that you have high expenses / bills on the order of six figures annually.
It doesn't make much sense to do it when the figure is much lower, say in the teens...

Also debit card activation fees eat up between 1%-3% of value, assuming you steer clear of monthly maintenance fees. The cheapest debit card activation fee I saw is 0.8% = 4$ one time fee for a 500$ card, however most cards have higher fees such as 7$/200$ card which is 3.5%, an amount far from trivial.

USrules said:   Drnoside said:   To address a few questions:
I net around 10K a year doing this. Sometimes it is a pain in the ass, but it helps stretch my income.

That's very decent... It also means that you have high expenses / bills on the order of six figures annually.
It doesn't make much sense to do it when the figure is much lower, say in the teens...

Also debit card activation fees eat up between 1%-3% of value, assuming you steer clear of monthly maintenance fees. The cheapest debit card activation fee I saw is 0.8% = 4$ one time fee for a 500$ card, however most cards have higher fees such as 7$/200$ card which is 3.5%, an amount far from trivial.


Oh I love the doubters. Keep thinking its too hard and not worth it. Ill keep the tax free income.

I am actually in the process of evaluating this strategy for myself however feel free to come with valid counter arguments ...
Oh and no Kroger's around my neck of the woods.

Drnoside said:   To address a few questions:
I net around 10K a year doing this. Sometimes it is a pain in the ass, but it helps stretch my income.

Have found very difficult but expensive ways to pay mortgage/rent, but when the grocery store 4x rewards went away it did not make sense.

There are other ways to scale/manufacture spend but the point of this thread is to share practical information on using visa gift cards.


to get the 10K...approximately how much was your total annual spend?

Simple math - 200k spend if he was earning 5%, less if he was earning a higher percentage or more if he was earning a lower percentage

What is AZ?

confused200 said:   What is AZ?Amazon

Every time I've checked there is an awful service fee to pay property taxes with cards.

sackland87 said:   USrules said:   Drnoside said:   To address a few questions:
I net around 10K a year doing this. Sometimes it is a pain in the ass, but it helps stretch my income.

That's very decent... It also means that you have high expenses / bills on the order of six figures annually.
It doesn't make much sense to do it when the figure is much lower, say in the teens...

Also debit card activation fees eat up between 1%-3% of value, assuming you steer clear of monthly maintenance fees. The cheapest debit card activation fee I saw is 0.8% = 4$ one time fee for a 500$ card, however most cards have higher fees such as 7$/200$ card which is 3.5%, an amount far from trivial.


Oh I love the doubters. Keep thinking its too hard and not worth it. Ill keep the tax free income.


I am not an accountant (nor do I play one on TV), but your income does not appear to be tax free. Credit card rewards reduce your cost basis, so what you are doing is liquidating an asset for more than you bought it for. This is reportable on either schedule C (if you've made a business out of it) or line 21 of your 1040 (if it's hobby income).

Sure, you can cheat and not report this, but there's always the risk of an audit if you generate enough CTRs/SARs when you are playing this game heavily enough.

edit: of course, this is irrelevant to the OP's situation (besides what seems to be a sporadic selling of gift cards). however, if you start making 'income,' it's clearly taxable

bppcomplete said:   sackland87 said:   USrules said:   Drnoside said:   To address a few questions:
I net around 10K a year doing this. Sometimes it is a pain in the ass, but it helps stretch my income.

That's very decent... It also means that you have high expenses / bills on the order of six figures annually.
It doesn't make much sense to do it when the figure is much lower, say in the teens...

Also debit card activation fees eat up between 1%-3% of value, assuming you steer clear of monthly maintenance fees. The cheapest debit card activation fee I saw is 0.8% = 4$ one time fee for a 500$ card, however most cards have higher fees such as 7$/200$ card which is 3.5%, an amount far from trivial.


Oh I love the doubters. Keep thinking its too hard and not worth it. Ill keep the tax free income.


I am not an accountant (nor do I play one on TV), but your income does not appear to be tax free. Credit card rewards reduce your cost basis, so what you are doing is liquidating an asset for more than you bought it for. This is reportable on either schedule C (if you've made a business out of it) or line 21 of your 1040 (if it's hobby income).

Sure, you can cheat and not report this, but there's always the risk of an audit if you generate enough CTRs/SARs when you are playing this game heavily enough.

edit: of course, this is irrelevant to the OP's situation (besides what seems to be a sporadic selling of gift cards). however, if you start making 'income,' it's clearly taxable


I don't think it is truly income. It is rebates on purchases. These are tax free.

Drnoside said:   There are other ways to scale/manufacture spend but the point of this thread is to share practical information on using visa gift cards.
Sure about that? It appears that the point of this thread is to kill a few deals that worked well until now.

beatme said:   bppcomplete said:   
edit: of course, this is irrelevant to the OP's situation (besides what seems to be a sporadic selling of gift cards). however, if you start making 'income,' it's clearly taxable


I don't think it is truly income. It is rebates on purchases. These are tax free.


Right. But when you start selling your things for more than you purchased them for, then your behavior is taxable.

edit: I guess this also applies to the post below this one.
vvvvvv

beatme said:    I don't think it is truly income. It is rebates on purchases. These are tax free.

This.

Also he is not selling any of his cards. You should go back and understand the process first... He is buying the cards at a discount (after CashBack rebate minus activation fee) and using them at face value.

Skipping 266 Messages...
kvs25 said:   does anyone know if a Wawa would count? It's not on the list, but they do sell gas...and GCs...

On my AMEX card I did a pay at the pump transaction and an in store purchase for the same visit this past weekend, both come up as "TRANSPORTATION - FUEL". It seems every Wawa with gas pumps has come up as "TRANSPORTATION - FUEL" for both the gas and in-store purchases (looking at about 20 purchases in 2012 and 2013). Purchases (2) at Wawa's without gas in March 2012 and October 2012 came up as "Merchandise & Supplies - Groceries".

On my Sallie Mae MasterCard in March, the pay at the pump came up as "AUTOMATED FUEL DISPENSERS", while the in store purchases came up "SERVICE STATIONS". Again this was for a Wawa with gas available, and I have no transactions at Wawa's without gas. In December, the in store posted as "MISC FOOD STORES-SPECIALITY,CONVENIENCE,MARKETS,VENDING MACHINES" -- this is the same store that came up as "TRANSPORTATION - FUEL" for AMEX this past weekend.

ETA: Please forgive the all caps, I just copied and pasted.



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