In addition to paying your taxes online, purchasing gift cards is another easy way to manufacture credit card spending for racking up a lot of rewards points. This especially makes sense if you have a credit card that maximizes spending bonuses and you have an immediate use for the gift cards.
For instance, if I need to buy a ladder, I could purchase a Home Depot gift card at Ralph’s using a credit card that earns 5% at grocery stores. The net result would be a 5% discount on the purchase of my ladder. Or I could purchase a Chipotle gift card (I like burritos) at Office Depot using a credit card that earns 5x Ultimate Rewards points at office supply stores. Assuming I value Chase Ultimate Rewards points at about 1.7 cents per point, this can amount to a return of 8.5% (5 x 1.7 = 8.5). You get the idea.
The downside to purchasing store-specific gift cards is that they are very limited. For example, you can only use Macy’s gift cards at Macy’s. What about debit gift cards that can be used anywhere? Office supply stores do sell debit gift cards from American Express, MasterCard, and Visa. The problem is that they have a purchase fee. And the cost of the fee is usually quite a bit higher than the credit card rewards you could potentially earn.
Once in awhile, however, Staples and Office Depot will run promotions in which you can receive a rebate that more than cancels out the purchase fee. Currently, there is such a promotion at Staples this week!
This week, from January 14 through January 20, Staples is offering a $20 Visa prepaid card via rebate when you buy $300 or more in Visa gift cards.
It’s important to note that it is valid for in store purchases only (you can’t buy the gift cards online).
There is also a limit of one rebate per name/address/household.
Maximizing the Deal
This is clearly a great deal because the $20 rebate more than makes up for the purchase fee. To maximize this deal, use a credit card that earns 5% cash back or 5x points in office supply stores. Examples include the Chase Ink Business Plus (no longer available to new applicants), Chase Ink Business Cash, or the American Express Simply Cash Plus Business Card. [Note: none of these links are affiliate links.] I have the Chase Ink Business Plus, so let’s use that as an example.
Gift cards are sold in different denominations of $50, $100, and $200. The $200 cards have a $6.95 purchase fee while the fee on the $100 cards is $5.95.
Remember that in order to get the rebate, you have to buy $300 or more in gift cards. You have two options:
- Buy one $100 card and one $200 card ($300 total + $12.90 in fees). This option will save you a dollar in purchase fees.
- Buy two $200 cards ($400 total + 13.90 in fees). This option will maximize credit card rewards by increasing the number of points earned (you earn additional 500 points for that additional dollar spent in fees).
Because I value Ultimate Rewards points and I am always maximizing credit card returns, I chose the second option.
The total cost of buying two $200 Visa gift cards is $400 + $13.90 = $413.90
Factoring in the $20 rebate, I come out a head by $20 – $13.90 = $6.10
I essentially paid $13.90 in fees to earn $20 in the form of a rebate card.
But that’s not all. By using my Chase Ink Plus card, I earned 413.90 x 5 = 2,070 Ultimate Reward points
Ultimate rewards can easily be redeemed for cash back at 1 cent per point. But by having a premium Chase card like the Chase Sapphire Reserve, you can maximize your Ultimate Reward (UR) points even further. In this case, each UR point can be redeemed for 1.5 cents toward travel or transferred to Chase partners (Hyatt, United, Southwest, etc.) where it is possible to redeem them for 2 cents or more per point/mile. Because of their flexibility and potential for great redemptions, I value UR points at 1.7 cents a piece.
With this valuation in mind, I earned 2,070 x $0.017 = $35.19 worth of UR points
Thus, the net value of earnings through this purchase is $6.10 + $35.19 = $41.29
Remember that the rebate is limited to 1 name/address/household. However, it is possible to earn more than one rebate. To do this, you would have to separate your purchases into two separate transactions at the cash register. Also, you would have to submit a different name/address/household on the second rebate form.
This is exactly what I did. I simply entered my dad’s name, address, and contact information. The next time I see him, I could ask him for the rebate card that was sent to his house.
By doing this, I essentially earned $41.29 x 2 = $82.58!!!
These transactions took me less than 15 minutes to do. And since credit card points and rebates are not taxable, I basically earned $82.58 of tax-free money in 15 minutes. This is way better than the current rate I am being paid as an anesthesiologist ;).
Filling out the Rebate Form
Submitting the rebate form is easy. All you have to do is go to www.stapleseasyrebates.com and enter your easy rebate ID (which is located on your rebate receipt). The page should look like this.
Next, you will enter a page that allows you to enter your name, address, email, and phone number. The address that you enter will be the location where you will receive the $20 rebate card. After you hit submit, you will receive a confirmation that your submission has been received and that you should expect a $20 rebate via mail in 4-6 weeks. Remember to enter a different name/address/household on the second rebate form if you made two separate transactions to get the rebate twice.
Through promotions like this, I am able to earn cash back and a lot of credit card rewards points. These points allow me to “travel hack” and enjoy certain luxuries (such as first class airfare) that I otherwise wouldn’t be able to comfortably afford. Luckily, I have a Staples near my house which makes it really easy to take advantage of these promotions every time they come up. To fully maximize the deal, it’s important to have a credit card that earns 5x points at office supply stores.
I know $800 is a lot of money. The beauty of debit gift cards is that you can use them anywhere that accepts Visa debit/credit cards. They are not limited to a specific store. In fact, my wife and I have a specific use for the $800. We are going to buy an organic, non-toxic naturepedic bed as we anticipate the birth of our first baby! 🙂
Are you planning to take advantage of this promotion? Share your thoughts and comment below.