Studying Gift Card Reselling Markets & Profits: Lessons Learned From Riding the Wave!

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Gift Card Reselling Markets
The brand is NOT in this picture.

Gift Card Reselling Markets

Gift card reselling is one of the best ways to generate legitimate and lucrative spend on credit cards. Of course the reason the spend is legitimate is because gift card reselling is a business. When you first get started you might be looking to simply breakeven on the cards you sell so you can keep the points, but as you spend more time, grabbing a profit is nice too.

I have recently started selling more cards on Raise as a bulk seller. Since I am doing a decent volume, I was able to negotiate a lower commission rate which opens up more opportunities and more profit. Previously I had been selling most of my cards to a couple of different companies. I still work with them, but have been turning to Raise for most of my sales.

Selling on Raise has definitely made it easier for me to make a profit, but there is a learning curve. When selling directly to companies, they set the rate and that’s it. Raise on the other hand is a fluid marketplace and prices change/fluctuate often.

Learning the Market & Increasing Pricing

Gift Card Reselling Markets

About a month ago gift cards of a certain brand were on sale for 20% off. I had never sold this brand on Raise before, so I entered the market pricing pretty low in order to sell the cards quickly. At that points prices were falling quickly since the market was flooded with new cards from this sale. Thankfully this brand sells FAST!

In total I sold 5 rounds of these cards as I was able to get inventory. Here is how it went and how I made more profit during each round of sales:

  • Within a couple of hours my first batch of $100 cards sold for 88.9% of face value. That didn’t leave me much profit, but I was happy to know that the cards sold quickly.
  • With the knowledge that the cards were selling quickly, I lowered the discount and sold the next batch of cards for 89.5% of face value. Squeezing a few more pennies out of the deal.
  • Thankfully there was ample supply of these cards locally so I bought more and priced slightly above market rate. It took a couple of days, but my next batch sold for 90.9% of face value.
  • Since I know felt comfortable that these cards sell quickly, I opted to purchase more cards and list the next set at 94.9% of face value. They all sold within a few days.
  • Finally, I went on my vacation to the Bahamas and Mexico leaving some cards not listed. When I got back I noticed that the market had sucked up almost all of the cards. I was now able to sell my cards for 96.9% of face value. I have sold about half of my remaining cards at that price and expect the others to go within the next couple of days.

Looking at the Math

Gift Card Reselling Markets

  • Let’s look at the difference in the math, because it is pretty substantial. At first, I was selling $100 cards for $88.90 before fees paid to Raise. I was about breaking even.
  • My final batch is selling for $96.90 or a full $8 more per card compared to the beginning. That is a significant change.

Lessons Learned

I have no regrets here since I was new to market with this brand and wanted to get a feel for how quickly the cards sell. With that said, I plan to be even more observant in the future on new brands, since it is clear that prices often recover quickly. This particular brand hasn’t been on sale again, so I don’t expect the market to be flooded with more cards. If it ever does go back on sale, I’ll probably hold back while people sell at a lower price.

Conclusion

Sometimes I miss the old days of selling all of my cards to companies, but Raise isn’t too bad. It is a bit more work tracking prices, etc. but I am already doing that with my Amazon business and thus it isn’t a bother. In the end the profit margins are much better and as I get to know the markets for more brands, I expect my profits to improve even more.


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19 COMMENTS

  1. Shawn is there more of an element of risk and headache selling on raise than TPM?

    Some of the bulk buyers u just load your cards and that’s it. Sounds like raise is different?

    • With TPM and others you sell for a rate and then forget it. You probably make less in the end but you have less risk. With Raise you are keeping the cards until they sell and you need to pay attention in order to price the cards. It is more work, but you probably will make more.

  2. Can you give us some past examples of good cards to be on the look out for? Where have you been acquiring these card from? How much commission is average? How much volume to be a bulk seller? Maybe a 101 from a past deal…. Thanks

    • I don’t think Raise publishes guidelines for being a bulk seller and I cannot discuss what my commission is. I can say it is quite a bit lower than the 12% standard commission rate they charge.

      To find brands, I suggest keeping an eye out on this blog and others for gift card sales. Then use sites like Gift Card Wiki to see resale rates. Cards which are profitable to sell to resellers will probably be profitable on Raise. It just takes some time to study and a little trial and error.

  3. raise requires constant monitoring of the prices and that you keep an open mind. if you put the time in you will earn more and learn more.

    Shawn, I was curious what brand you were selling if you dont mind revealing.

    • I decided to leave it out since I am still selling them. As other comments mentioned, Carter’s and Neiman Marcus were brands that had a similar market to the one mentioned in this post.

  4. P.s. wait till you get your first dose of market overflow that never recovers like itunes. then you won’t feel nearly as comfortable listing as high.

    • Yeah I know of a few people who got stuck with iTunes cards. I definitely hear your point, but I was monitoring the markets for this particular card. I did indeed price low to start and made adjustments. As you point out though, being comfortable with float is important.

    • It isn’t Carter’s or Neiman Marcus but I did similarly well with those brands by waiting for the market to absorb the cards. This post could have easily been about those brands as well, however the percentages are different.

  5. What happens if someone returns the card or claims fraud purchase for the card company as a seller you have to pay back?

  6. Raise.com recently asked me for more information for tax purposes (which I have yet to provide).
    Any idea of taxes are supposed to be paid on these? I only sell what would be construed as gifts but I won’t sell at all if I’ve got to report this stuff on my taxes.

    • You should consult your financial professional since I am not an accountant. With that said my understanding is they are required to give you a 1099 if you have 200+ transactions totaling $20,000 or more. I don’t believe they give a 1099 outside of that, but you could ask them and your financial/tax professional.

  7. I second what DS asked: What is to stop a person from buying your gift cards, using them, and then claim that they had no value? How will raise know who was the one who used it?

    • You can read the details in Raise’s terms, but basically you are supposed to be protected as long as you don’t use the card yourself and as long as it is valid. Basically as I understand it you will be asked to prove the history of the card and if it is legitimate you should be fine. With that said, I have never personally had this happen nor have I heard of it happening to others so I don’t know how this process actually works.

  8. I wonder if Shawn just hasn’t had a chance to respond yet, or if more likely the lack of resopnses is intentional as it may be to his benefit to not share too many details with us…

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