Visa Gift Cards 5X Options
It seems in the miles/points realm a question as old as time is whether it makes sense to purchase Visa gift cards at an office supply store in order to generate awards. Such a question recently came up in the Miles to Memories Facebook group and I thought it was worthy of an updated post given the new recent options that have surfaced.
Before I start, there are occasional discount deals like this week’s Office Depot promotion which make the math much better. Those aren’t too common and this post is dealing with the normal math outside of when a promotion is running. Basically, does it make sense to pay the purchase fee given the rewards earned? Let’s take a look.
Visa Gift Card Options Office Supply
The way I see it, there are three “value” options for purchasing PIN-enabled Visa gift cards from an office supply store. Each has slightly different math.
Option 1: New “Everywhere” cards at Office Depot. Load up to $200 for $4.95.
- Pros: Lower fees
- Cons: Only work at select merchants
- Math: $1,200 in gift cards costs $29.70 in fees and generates 6,149 points at 5X.
- Cost per point: $.0048
Option 2: Standard $200 Visa cards at Office Depot & Staples. $200 for a $6.95 fee.
- Pros: Widely available. Can be used at any merchant.
- Cons: Higher fee.
- Math: $1,200 in gift cards costs $41.70 in fees and generates 6,209 points at 5X.
- Cost per point: $.0067
Option 3: $300 Visa gift cards online at Staples. $300 for $8.95 fee.
- Pros: Order online. Higher denomination = less cards.
- Cons: Regular mail. Chance of getting lost. Staples sometimes cancels orders.
- Math: $1,200 in gift cards costs $35.80 in fees and generates 6,179 points at 5X.
- Cost per point: $.0058.
Things to Consider
So now that we have the math in place, here are some things to consider:
- How much does each card cost to liquidate?
- How much is your time worth? Factor that value into your calculations.
- How much 5X bandwidth do you have? If you can get close to your 5X limit ($50K with Ink Plus for example) with discounts, promos and regular spend, why would you pay to buy points?
- I wouldn’t do it, but you could pay yourself back the fees by cashing in points and keep the rest of the points for “free”.
- There are many other things to consider if you are new. See the comments for some more ideas.
The Sapphire Reserve Math
Of course the new Chase Sapphire Reserve changes the math for everyone. For example, let’s look at the “Everywhere Visa” example. Those are the cheapest cards per point. If we buy 6,149 points for $29.70, we can then use those points for $92.24 worth of travel. Depending on your liquidation time and costs, that is pretty intriguing.
If we now look at the Staples online example, you pay $35.80 for $92.69 worth of travel. More expensive yes, but there are two key differences. First, you can order these online which saves you the time and effort of driving to a store. Also, you only have to liquidate 4 cards instead of 6, which could save on liquidation time and costs. Depending on these factors, especially the value of your time, this could be a much cheaper option.
There are a ton of ways to look at the math for these types of things, but in the end it comes down to a calculation. Are you getting the value out of your time and the money spent? I think for a lot of people the answer is yes, but to go through the hassle of doing this (and it will be a hassle at some point) without an idea of what you are getting out of it, probably isn’t a good idea either.