Do you know that billion dollars worth of gift cards go unused every year? At the same time, many people are also buying them for personal shopping. If you haven’t heard, the trading market is big, so why not take the advantage and learn how to make money with gift cards, instead.
Gift Cards Flipping – What Is It All About
The concept of trading gift cards can be a bit confusing if you haven’t done it before. Simply put, the objective of the business is to pay less than the face value of the card yet still able to make a profit during reselling. The process usually involves 3 parties – the seller (that’s you), reseller and the end-buyer.
Here’s a scenario.
If someone sells a $50 gift card for $45, whoever buys, will earn $5 in saving. That means, for the seller to make a profit, the card needs to be acquired for less than $45. If he/she gets the card for free, then it becomes a full profit.
Free card ($50 worth) –> sell for $45 –> seller makes $45 in profit
If he/she buys the stock card, the more profit can be made if the purchase fee is low.
Bought card ($50 worth) for $40 > sell for $45 > makes $5 in profit (lower fee, higher profit)
Bought card ($50 worth) for $42 > sell for $45 > makes in $3 in profit (higher fee, less profit)
The best scenario is obviously to skip the reseller phase and sell directly to the end-user for a full profit, but that is not always possible and I’ll explain why later. In most cases, you are going to be the seller here, rather than the reseller.
Where to Get Cards for Free
Assuming that we want to make a FULL profit, we will need to get the cards for free so let’s see how we can do that.
1 – Check your drawer, purse or wallet. There may be a few gifted to you some time ago, but you have no interest in using them. This is the best option because you don’t need to spend a cent to acquire them.
2 – Most credit cards come with reward points that can be redeemed for gift cards. If you are a regular user, find out how much-accumulated points are needed for the full value of a gift card.
3 – Some cashback sites like Rakuten Ebates offer free gift cards when you make the first purchase through them, so if you are interested in budget savings, go ahead and create an account.
4 – If you do a lot of online shopping, there’s a nifty tool called Honey that pulls discount codes from various online sources and lets you purchase at a bargain. Every time you shop, you’ll accumulate points and for every 1000 points, you can earn a free $10 gift card from big stores such as Amazon, Walmart, and Target.
The app can be easily installed through most browsers.
5 – Alternatively, you can also join reward sites like Swagbucks or Prize Points that let you earn points by doing online tasks. When a certain threshold is met, those points can be converted into gift cards.
Getting free gift cards is the most ideal method, but the availability is not always consistent, hence it’s not the most reliable way to go. In order to trade in bigger volumes and earn more, you need to have a constant stock so buying gift cards would be the next best option.
Where To Buy Discounted Cards
The discounts applied to gift cards very much depends on the market value. If it’s linked to popular stores, the discount may be less because everyone wants to earn a piece of the pie with a higher selling price. If they are not from popular brands, then you can possibly get it for much cheaper.
1 – One of the best ways to buy cards is to ask your friends/family members if they have one (or several) that they are willing to let go of. If cash is preferred over cards, then they could offer a bargain of 10% to 20% of the face value. That means, for a $100 worth of gift card, you just need to pay $80 so there’s still plenty of room for profit-making.
2 – The other method is to purchase directly from the store itself during promotion periods. You may buy in bulk (if they allow that) through physical stores or through coupon sites to get the best value per card.
For example, on Groupon, you can find $50 worth of card for just $40.
3 – Other places that sell at discounted rates are wholesale sites like Sam’s Club where you could get up to 20% savings for a group of cards. It’s similar to bulk purchase and they have gift cards from every imaginable product department.
4 – eBay is another popular site where you can find gift cards from a variety of local stores. They are usually sold by individual sellers who just want to get rid of the card so the discounts can sometimes go up to 50%.
5 – The best way to acquire gift cards in the masses is to become a licensed vendor so that you can buy more varieties at better pricing from several wholesalers. To do this, you need to check with local authorities and see how you can establish a business in the gift card industry.
Where to Sell Gift Cards
Regardless of how many gift cards you have, the best place to sell them nowadays would be through verified online marketplaces. They are most visited by end-users because of store varieties and secured transaction processes that protect both parties – the seller and the buyer – during the trading.
Depending on availability, most marketplaces provide both papers as well as online format of gift cards and the discounts can sometimes reach 35% off. This is another opportunity to obtain the card if you are thinking of re-selling as you can always opt for an alert notification whenever a brand/card is on sale.
There are no fees involved in using these marketplaces. So you basically go in, choose the value of the card that you want to sell, opt for the best payment option and get paid instantly.
Here are some reputable sites where you can start selling the cards.
For the US
- Gift Card Granny
- Gift Card Spread*
For the UK
Additional Way to Monetize Online – Referral Marketing
Now, if you think that trading is the only way that you can make money with gift cards, then you’d be surprised. As eCommerce activity expands throughout the country, one of the factors that can propel targeted online shopping is referral marketing.
In this context, you’ll be affiliated with resellers and earn a commission whenever you refer a seller or a buyer to use the sites. In the earlier marketplaces mentioned that are marked with asterisks* have affiliate programs that you can join. They are best suited for people who are in the money-making or budget-saving niche.
Cardpool, for example, pays up to 2% of the gift card value that is sold or bought through them within a period of 30 days. In fact, when you refer a friend via email, you can also earn an additional $5 credit reward.
The Pros of Gift Card Flipping
There are many reasons why gift card flipping is becoming a popular trade.
1 – It’s a very convenient and flexible product to use for personal or even high-end shopping thus, it is suitable for any type of budget range or any company that wants to attract more customers from the online space.
2 – As an inventory, it has a long expiry date (up to 5 years) while some don’t even expire at all. For physical cards, you can certainly keep as many stocks as you want and if it’s digital, the storage space would be endless.
3 – You don’t need to invest in a lot to get started. With one card, you can sell at marketplaces and with one blog, you can join as an affiliate marketer or do both together if budget-saving is a passion of yours.
4 – Big retailers usually come with gift cards and you can leverage on their shopping trends to sell more during peak seasons because these are the times that people are searching for discounts.
The Cons of Gift Card Flipping
Just like any industry, there’s always the other side of the coin that we should be aware of.
1 – Acquiring cards at the lowest (or zero) pricing involves a lot of hustling. You need to be constantly on the lookout, research for the market’s supply and demand in order to identify brands with the highest profit. This can take time and a lot of trials and errors.
2 – The profit from reselling isn’t a lot either – probably around $2 to $3 or less, sometimes. So in order to make a lot of money, you will need to trade in bigger volumes and that depends on how efficient you are in sourcing for the cards.
3 – Just like any trading, there are people who will try to scam you for buying or even selling gift cards. For example, you would pay for a card, only to realize later that there is no value in it. Or before you could even sell, someone has stolen the code and redeem the full value of the card through a physical store.
This activity is rampant, hence it’s not advisable to trade in unsecured places like eBay or Craigslist where there is plenty of opportunities for frauds to take place.
4 – As lucrative as it may seem, gift card flipping has more market appeal in countries like the US, UK, and Canada where most retailers have established eCommerce sites. If you live outside of these regions, it may be challenging to research consumer trends as well as getting access to certain online marketplaces.
What Is Your Favorite Card
I bet you never thought that something so small like a plastic card can attract such a huge market and generate massive trading involving so many major retailers. Well, it’s only going to get bigger AND better. So if you are interested, now is the best time to learn how to flip gift cards and turn it into a profitable business.
For more tools and tips that can help you make the most out of this industry, please visit my recommended training platform to get started for free. Hope to see you there!
What’s your experience of buying or selling gift cards? Let us know in the comment area below.