SHOULD you buy that Visa Gift card with the $20 Sam’s Club Amex offer?

Well after getting a Sam’s Club card this weekend, I was looking on the Sam’s site, figuring out which gift card to buy and I didn’t want to repeat my Smart & Final mistake.  I need to buy something for at least $40 since Sam’s let you split payments over 2 cards online.   There’s a $50 Fandango gift card for $37.88, which is a 24% discount (usually these are only 20% off).  Use them with the Fandango Visa 2-for-1 deal on Friday nights and you have one scorching hot date deal to the movies.  The problem is of course it’s not $40, which means you should only use 1 AMEX card for $20 off, which isn’t that bad of a deal and I may buy one this way.  You could add a household item, but then they’ll charge you shipping, which negates the deal.  Then there’s the $50 Cold Stone Creamery (I do love ice cream) for $39.88 (Nooooooooooooo!!!!)  I couldn’t find any gift cards that I could buy for $40, so for simplicity sake of this post, let’s say you love Olive Garden’s never-ending bowl of pasta and you want to buy 2 x $25 gift cards for $23.98 each.  The way to think about this is – if your friend gave you $50 CASH to buy him $50 in Olive Garden gift cards, what’s the best way to get him the gift cards while you make some extra money on the side.

Option 1 – Run out to a supermarket and buy him a $50 gift card to Olive Garden

This method will give you either 2X or 4X fuel rewards.  If we assume 4X this weekend at Kroger, you’d get 200 fuel points, worth $.20 off per gallon.  If you have a 12 gallon tank in your car, you’ll have made 12 * .20 = $2.40.  Not too shabby.  He gets his $50 gift card and you have $2.40 worth of gas on your next fill up.  If you paid with a 5% card, you’d save $2.50 on top of that, for a total savings of $4.90.

Option 2 – Order the Darden electronic gift card at Staples.com using your Ink

This method gets you 5X UR on your Ink and 2X on the portal purchase (FM’s lab says it pays out).  You would net 7X * $50 = 350 points/miles.  If you value them at 1.5c per point, you’d have 350 * .015 = $5.25 in your pocket as you hand him his $50 GC.

Option 3 – Buy from a gift card site

Giftcardgranny shows a 16% discount on OG gift cards.  That means a $50 GC would only cost you $42, thus pocketing you $8 with this method.

Option 4 – Buy the OG gift cards from Sam’s using 2 AMEX cards

This method would cost you $23.98 * 2 = $47.96 – $40 = $7.96.  YOWZAS!  You can give your buddy his $50 GC while keeping $42.04 in your pocket.

Option 5 – Buy the $50 Visa gift card from Sam’s, then use that gift card to buy from the gift card site (option 3)

With this method, you’d buy the $50 Visa gift card for $52.38 using 2 AMEX cards.  This will net you $52.38 – $40 = $12.38.  You’d then take that $50 VGC and either load it to your Serve/RB for free (a comment on DoC is saying this won’t work) or just use the VGC directly on the gift card site for $42.  The math on this one:

• $52.38 – $50 Visa gift card
• +$42 – $50 OG gift card from a GC site
• = $94.38
• – $50 – liquidating the GC to Serve/RB or spending $42 on the GC and then $8 elsewhere
• – $40 – AMEX offers
• = $4.38

As you can see with this method, it costs you only $4.38 to acquire the $50 in OG gift cards, hence letting you keep $50 – $4.38 = $45.62 in your pocket.  I realize some people will argue that you only had $50 to start with and not $52.38, which is a valid point, but it doesn’t change the fact that you are better off buying the $50 Visa card over the Olive Garden gift cards directly from Sam’s Club.  The question now is – shouldn’t you buy the $100 Visa gift card instead since it only costs $3.88.  The answer to that is NO you shouldn’t because you have to factor in the opportunity cost of the incremental $50 is costing you an extra $1.50 in fees.

Updated 5/11 – New option after original post

Option 6 – Buy $100 of Sam’s Club GC’s, convert them to $100 VGC in-store, then buy from gift card site (option 3)

My buddy Sud told me this was an ever better move than option #5.  According to Fatwallet, you can buy a fixed Visa gift card in store using Walmart gift cards.  With this method, you’ll need 5 AMEX cards (I believe the majority of us have at least this many.)  If the $100 Visa gift card costs $103.88 in store, then you’re spending $3.88 / 2 = $1.94 per $50.  If you read option #5, this is a savings of $0.44. While this is cheaper, you may get shot down by a cashier, so this method does provide more headache than the $0.44 it’s saving you.  If Walmart sells a $200 gift card, this does make this option a bit better, but once again, cashier headache.  You could also try using self-checkout, which I hear works as well.  Worst case, you can just buy household goods with the gift card, so it’s not like you’re stuck with $100 of Olive Garden gift cards.

Conclusion

If you plan to actually shop at Sam’s Club or at Walmart, then you should buy the $20 Sam’s Club gift card instead.  If you hate Walmart, then the $50 Visa gift card is the best route.  You shouldn’t buy any regular priced merchant gift cards (whether it is OG, Starbucks, whomever) due to the opportunity cost of purchasing it elsewhere…unless it’s the Fandango $50 gift card for $37.88 (and even so, you might want to run this whole scenario to see if it’s better than buying the $50 Visa gift card.)