Tuesday, August 4, 2015

Turnover Tuesdays - Best Buy Gift Cards Fail

For those who are not familiar, I started a series a while back called Turnover Tuesdays. Every Tuesday I like to highlight one item that I have resold. This will include profitable and non profitable sales. I hope that there is always something to learn.

Week 1 - First attempt at reselling
Week 2 - My second straight fail
Week 3 - My iPad mini collection
Week 4 - Bed Bath and Beyond
Week 5 - An iPad Idea for Your Staples Gift Card Collection

The Item - Acer Laptops

I was enticed buy a Best Buy Flash sale to buy 3 Acer Laptops.  It was in the middle of the $20k Challenge and I was looking for easy and expensive resells.  This one didn't exactly go to plan.

I decided the best way to go about buying the laptops was with Best Buy Gift Cards.  The 3 laptops cost $1,222.  I left over a small portion which was paid for with the credit card since Best Buy caps you at 10 gift cards per transactions.  After discount gift cards the cost was $1,163.93.

Credit Card Points 

I earned 1163 Membership Rewards points

Shopping Portal

This is where I thought I was going to make my money, as usual.  Discover was offering 5% cashback at Best Buy.  This was back in June so unfortunately the Discover Double promotion was not available at the time.

Estimated portal earnings  ~$50

Loyalty Points 

Estimated Best Buy points - ~1000, which is worth about $20 towards a future purchase.

Fulfillment by Amazon Fees

Amazon's FBA fee was ~$100 for the 3.  Shipping was about $10.  Total fees ~$110

The Haul  

They were going for about $410 on Amazon at the time I bought them.  I was able to sell them for $405 each.

I paid $1164 and sold them for $1,215.  After $110 in FBA fees, that is a loss of ~$60.

Here is how the numbers should have worked
Cash = $-60
Credit Card Points = 1163 MR points.  Let's call that $11.50
Portal Points = $50
Loyalty points = $20

If you include the value of the CC points and Best Buy Rewards points at $0.01 , your profit is about $31 which is a very low 2.7%  Not a great idea to begin with, but a few things took a turn for the rose.

You Don't Earn Discover Cashback for Buying Merchandise with Gift Cards at Best Buy

Soon after my purchase, I got the confirmation email from Discover that I will be receiving cashback from my purchase, but it had a surprise for me.

$1.50 cashback?  That's a lot less than the $50 I was expecting.  It turns out that I only earned Discover Cashback for the $30 I placed on my credit card.

Even worse, the same thing happened with my Best Buy Rewards points.

So, you ask why didn't I check Frequent Miles labs, I would have seen that this is the case?

The answer is that I did and I cheated.  I didn't show you the whole picture.

It wasn't there before.  I reported that myself.  Lesson - please report your portal results, it helps everyone!

Once you take away the portal points and the Best Buy Rewards points, the sale turns out to have about no profit.  Not my best.  Then things got worse.

One got returned.

I just recently sent it back again as "like new" to be resold, but right now this is turning out to be an unfortunate sale and really hurt my profits as I will probably not be able to sell it for more than ~$380 and hope that it isn't returned.

Reselling isn't all fun and games.  It's important to see this side as well and hopefully you can avoid it.  My sales have been much, much better since this (this was back in May).