I love eBay!
Perhaps it is genetic, but I just can’t resist a good deal, and I love finding the angle. Recently, the need for a high-end purchase prompted me to look for an angle to save money, and boy did I do so.
How would you like to save between 10–20 percent on your next purchase? What about 30 percent?
I saved $271.02 on a $1,500 armoire for my bedroom – that is an 18 percent savings!
Think about that in investment terms. I was going to buy the armoire anyway, so I was able to see an 18 percent return on my purchase for very little effort and little to no risk. But, I didn’t use gift cards to pay for 100 percent on the armoire, so when you look at the math below, you will see that my actual return on my investment was 27 percent. The annualized return on my investment was 2,386.58 percent.
Want to know how you can too?
I realized I could purchase gift cards on eBay on average for 10–20 percent less than the face value (more if I was lucky). Then I could turn around and purchase the item I wanted with the gift cards, effectively saving between 10–20 percent on my purchase.
Let me break down my gift card purchases for you so you can see how I saved.
Gift card 1 – My investment $367
My return $420
Gift card 2 – My investment $450
My return $500
Gift card 3 – My investment $171.39
My return $201
Gift card 4 – My investment $21.59
My return $160 (Yes, $160 for a $21.59 investment. I will tell you how in a bit.)
My total investment was $1,009.98, and my total return $1,281. Do the math – that is a total return on my money of 27 percent!
And I was going to buy that armoire full price. Never again.
Think this whole idea is crazy? It’s not. Check it out for yourself. Go to eBay and search for gift cards to your favorite store. Then look at what they sell for. You will see that a 10 percent savings is average, and with a little patience you can save more.
Want to know how I got an 87 percent return on gift card 4? Well, this was a special card. The seller was selling a $10 gift card along with a 10 percent-off-any-purchase coupon. So I was able to save 10 percent ($150) off my armoire from the store and had a $10 gift card. Not to shabby even if I just bought that card!
You were waiting for this part… The only catch is you have to be careful. As with any investment, there is a risk. In this case, it is a human risk – the risk of being ripped off by a dishonest person.
But there are a few simple things you can do to prevent being ripped off.
- Feedback is eBay’s way of letting past buyers and sellers relate their experience with another eBayer. Check feedback. If someone has a lot of negative feedback, avoid them. If someone has no feedback, email them first and try to get a feel for them. (If they don’t respond – bad sign. If they have recently changed names – also bad sign. If they are just new to eBay – could mean a good deal to be had.)
- Look at shipping costs. If bidding seems way too low, there may be a reason. It could be the seller is trying to charge an arm and a leg for shipping. There is no need for $10 shipping on a gift card. Most gift cards offer FREE shipping or $.37. Your return on investment could end up less than you thought if you don’t consider shipping in your calculations.
- Use a PayPal account to purchase items. This gives you proof of payment.
- Find out if there is a phone number on the card to check balance. If the card does, you can check as soon as you receive it in the mail. You are less likely to get a fake if they know you can check it upon receipt.
- Read the fine print. If the seller doesn’t list the fine print on the card, ask them for it. Some cards can only be used in special circumstances. Don’t plan to use it for an item without checking for exemption.
- Check expiration dates. If seller doesn’t mention – ask. You don’t want to buy an expired card.
- IF you have a bad experience. Leave bad feedback and report them to eBay; don’t let someone else go through your trouble. But think before you leave feedback; allow people ample time to make things right. You don’t want to ruin them if they just made a simple mistake.
- Finally, use your head. There are people who sell crazy gimmicks on eBay, so if it sounds like one, it probably is.
How to Save
Ok, here is the fun part — how to do what I did.
First, go to www.ebay.com In the upper right corner, you will see a search box. Enter the name of the store and gift card (i.e. “Pottery Barn gift card”). Note: you can also search using gift certificate.
When I did this today, eBay came back with 22 current auctions with that in the title. The one ending the soonest (two hours) was a $460 gift card currently selling for $400 – 87 percent.
Once you find something you want to bid on, you will need to be a member, so if you are not already, click on “My eBay” at the top and follow the prompts to register for free. Again, if you are going to be purchasing items, I recommend setting up a free PayPal account. The registration will also walk you through this option.
All set with an account? Now you are ready to bid. Just remember, as with all auctions, timing is key. And, of course, as with any investing, know your limits. If you want to make at least a 10 percent return, don’t bid all the way up to face value. Like paper trading, I recommend watching a couple of auctions to see how things go before you start bidding.
TIP — Sell your gift cards
This process can also be reversed. Have you ever thought about selling gift cards? Maybe you received a gift card, or returned something to a store you don’t shop at. Would you rather have cash than the gift certificate?
Then you can be the other half of this symbiotic relationship and get cash for your gift card. Of course, you will only get about 80–90 percent of the value, but if you don’t plan to use it, then hey, it is cash.