My reselling coworker and I had a discussion about this yesterday, and I thought it’d be a good post. We both currently have ~$1,000 Discover cashback and was wondering if we should redeem it for CASH or redeem it for a gift card like Sears. I think the best redemption is to use it on National Car gift certificates written about by Frequent Miler. Now I would go this route, but I don’t need $1,000 worth of National certs. Maybe I’ll redeem $60 worth. Now what should I do with my other $1,000? Sure, I could redeem it for some Banana Republic gift cards [at a 20% discount], but once again, I don’t need over $1K worth of BR gift cards. Plus, I can already get them for 20% off these days.
Anyway, Discover does have $50 Sears GCs for $45. See below:
Option A – Buy Sears gift cards
The reason why this is a popular option because you could convert these to cash in a roundabout way. So let’s work the math here. If you had $1,000 Discover cashback, you can redeem it for 22 of these $50 gift cards valued at $1,100. At first glance, you’d think that’s a good deal since you know $1100 > $1000. In the past, I actually did redeem it for $1,100 of Sears GC since I could then turn it around to buy products to resell and turn it into say $1,200 cash. Sounds like a winner to me. But wait!
Option B – Take out as cash and then buy Sears gift cards
In this scenario, let’s take the $1,000 out as cash. Then we’ll go back through the Discover portal to buy $1K of Sears GCs. Quick aside – I know some people are getting clawbacks on doing this, but I’m not ready to declare it dead YET. Right now Discover has 10% cashback through the portal to Sears. Thus, with this route, you’ll now have converted your $1,000 cash to $1,000 of Sears gift cards PLUS $100 back ($200 back if you are in the double cashback program). As you can see, $1,000 Sears GC + $100 CASH is greater than $1,100 of Sears GC.
This option also applies to the 20% Banana Republic cards. Don’t redeem $1K for $1,250 in BR gift cards because it has a higher value. Take it out as CASH and wait for Safeway to do another 20% off deal on Gap gift cards. You’ll wind up with the same $1,250 in BR/Gap gift cards, but now you’ll have 2X-4X fuel rewards plus the credit card points/cash from the grocery spend. This goes for any other gift card that you are considering buying. Ask yourself if you can get the gift card cheaper through another outlet (maybe even a gift card exchange).
Conclusion
The best options for Discover cashback redemptions are either the National car rental certs (up to a certain point) or CASH. This also applies to redeeming TCB payouts for Amazon GC’s. Sure, you’ll get 3% extra value, but if you take it out as CASH and then go buy the Amazon GC elsewhere, you’ll get it for more than a 3% discount.
Update – There does seem to be a better option than CASH and it’s Staples gift card at 20% off.
Be careful with the National certs. They can’t be used with some corp codes. Also, they sometimes (always?) can’t be combined with other coupon codes. Sometimes when I’ve tried to use them, it ended up I could do better with other codes than using the certs. Not always, but sometimes. And unfortunately you won’t know until after you “buy” the certs from Discover.
I do believe they are very useful for shorter rentals (1-2 days), but for longer ones, I can usually do just as well with other discount codes.
That’s probably why I haven’t redeemed it for National certs either… thanks for the heads up.
Hello Vinh,
You mentioned that ” I know some people are getting clawbacks on doing this, but I’m not ready to declare it dead YET.”
Is this a general impression or do you have a specific comments confirming this? In my experience, clawbacks rarely occur (If they do, likely a promo code was used)
Mike, this was during a 2-3 day window in May using Cartera portals. I haven’t heard any clawbacks from Discover, so proceed as normal.
My wife likes to shop at Burlington so I usually get that for her. Otherwise, I’d go with National as well. Enterprise has expiration date but you can get it e-delivered so not a problem there.
If you can’t get the Burlington GC for cheaper elsewhere, then it’s a good play.
Take the cash then buy Burlington at 20-30% off with a CC for more points. They are always on sale at the resellers.
Or redeem for Staples eGC at 20% off!
I was going to suggest this too, but Vinh has a good point. If you can get Staples GC already on eBay for 20% off, might as well take the cash. Some of the cruise options are potentially interesting too.
P.s. SNOOPY!!!!
Correct. if you can get Staples GC elsewhere for 20% off and get 5X as well, then it’s better to take out as cash.
I’m so confused with all the Snoopys….
Where are people getting Staples gift cards at 20% off. Occasionally they are on sale at ebay, but with a limit of a few cards, so not something you can use regularly for all Staples shopping..