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December 07, 2010


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Gift cards, if lost, misplaced or stolen, typically can't be replaced. I don't think it's worth the handling risk for an extra 1%, especially if the cards aren't going to be used immediately upon receipt. YMMV.

$2500 in gift cards would equate to $25 earnings.

It would be what you feel your time is worth.

Right now I have enough things to track in my life and keeping track of $2500 in gift cards would add a layer of complexity in I time where I am trying to simplify my life.

For me right now it would not be worth it.

Maybe when I retire in 12 to 17 years and I have more time on my hands.

My American Express Blue Cash rewards card gets a 5 percent rebate on everyday purchases, which I would assume to mean Costco. I cannot say for sure though because my rewards statement does not break down where my rewards come from. It should definitely be 5 percent for Costco gas.

Everyday Tips --

Nope. From their site:

"5% Cash Back on Everyday Purchases: Get up to 5% cash back on everyday purchases (Gas, Grocery, & Drug); up to 1.25% cash back on all other purchases."

Then the details say:

"Everyday Purchases are eligible purchases made at the following categories of U.S. merchants that are not departments of superstores or warehouse clubs: supermarkets, drug stores, and automobile gasoline stations (up to $400 for each purchase at an automobile gasoline station)."

Note that warehouse clubs are excluded...

Seems like using a dollars worth of time to save a dime to me.

I don't know if they sell Costco or Sams Club gift cards in drugstores or supermarkets, but if they do you can buy them with a card that gives 5%. I did a similar thing when I recenly renovated my bathroom. I bought a few gift cards to Lowes at Walgreens using my Amex Blue Cash. I get 5% back at Walgreens on my Amex vs. 2% at Lowes on my Schwab, so I was getting back an extra 3% on ~$1000 worth of supplies.

I'm puzzled why people think this is not worht their time. How long do you think it takes to order something online? Out of curiousity, I checked it out at

1st note that ordering the Costco card has no fee and no shipping cost.

For me it took about 2 minutes from start to finish to go to, search for 'costco card' put one in the shopping cart and then finish an order including typing in my credit card. I'm already registered with but registering would maybe add another couple minutes. Worst case this is 5 minutes of time to order a card.

I don't see any 'gotcha' here and it seems well worth the time investment.

You miss my point. Now you have a gift card. How much have you spent on it? You need to keep track. Does your wife have one of the gift cards? Has she spent it all? Gee it is all gone I need to order another one. I have to wait until I get it but I need gas right now at costco so I use my AMEX. Hummm. Now that is another thing I need to keep track of and right now all the things I am keeping track of right now are enough.

I have a drawer full of gift cards that I harp on our kids to use that were gifts to them. Some are years old. I wonder if some are now expired.

We used gift cards for a while to help raise funds for our school and we still don't know if we spent it all seeing that we "misplaced" one of the cards.

I know it does not work well in my household right now.

Great if you can do that and keep track.

Nickles chasing pennies as I see It.

Costco does not sell gift cards anywhere other than their own website. The commission paid to retailers such as grocery stores on store-branded gift cards is far greater than Costco's profit margin, so it doesn't make sense for them to do so. I'm not sure I've seen a Walmart gift card (usable at Sam's) anywhere outside their stores as well.

Getting 5% vs. 1% back is certainly more attractive than 2% vs. 1%. But just to reiterate my point--the loss/theft/misplacement of just one card will likely more than obliterate any additional rewards you've earned.

I honestly wouldn't have a problem employing this strategy as I frankly enjoy the challenge of squeezing as much out of a transaction as I can, and I don't think there's an unreasonable amount of time involved to set this up. But reality is that--much as I can keep all of this straight in my head with no problem--I'm admittedly disorganized in the physical handling of important "stuff." Misplacement of a card is a very real risk that doesn't warrant an extra 1%. As always, YMMV.

The equivalent but more effective solution for me would be use the 2% card to buy dollar coins from the Mint, then use those at Costco. Sure, they're harder to transport than gift cards--but they are a lot harder to lose track of, and they never lose their value unless the USA goes out of business.

Matt, If gift cards are that much of a problem for you then it doesn't make sense for you to use them. I buy gift cards for some things and don't have problems using them. But I do see that 1% difference may not be worth the extra effort and hassle here.

Just an FYI - Sam's Club lets you link a Discover account to their card, but you don't have to use that one to pay the bill. You can select another credit card option at the register. I usually use either a rewards Mastercard or Visa when making purchases there. Given that, unless you get a discount on the purchase of the giftcard, the cost and rewards earned are the same either way.

Stop whining folks. Move along if it doesn't fit your needs. Good idea for the rest of us.

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