Wisdom from The Action Wisdom In Action

After Looking Into Discounted Gift Cards, My Expectations Have Become Discounted

After checking out some of these penny auction sites, it seems you have to shell out a couple of hundred bucks just to bid on the discounted cards--NO DISCOUNT when you add the bidding cost back into the final card cost. You've actually overpaid for that Visa or Mastercard, but you can still use the card (despite the price) to pay yourself back in the form of tax writeoffs, charitable contribution writeoffs, appreciating asset purchases, etc., even if you did end up paying full price for the card!

It doesn't matter how good the discount is on the Visa or Mastercard--even if it was free, you'd still be out the money you had to pay to bid.

No free or even discounted lunch here...move along. In order to get one of these cards at auction, it would HAVE to pay you back, and big time just to offset the cost to bid.

One more item for the FALSE ECONOMY list.

UPDATE: One site charges $200 for 50 bids--this means each bid you place costs $4.00. It will probably take more than one bid to get your item, and the auctioneer has received that $200 whether you win or lose. Even if you manage to get that coveted gift card in one or two bids, the cost of those bids EACH must be added back to the amount you got the discounted gift card for. This means a few things:

1. Don't waste your bids--they could be $4 a pop or more.

2. Even if you are careful, you may still lose--competition is fierce.

3. You don't have money to waste this holiday season trying to perfect your system.

Imagine what you could've done with that $200 besides blow it on THE CHANCE to get a discounted gift card. This is equivalent to playing the lottery--yeah, you could win millions, but how much money would you have to throw at lottery tickets just to get that million? Maybe another million when all is said and done. Then comes taxes, and your millions are cut by 2/3 with state and federal taxes due, which means you blew money on a money-losing scheme.

The tickets to this game cost more than a lottery ticket--$1 vs. $4. Go ahead and get a full-price gift card, and just use it in bang-for-your-buck ways.

If it costs $200 JUST TO ENTER THE GAME, then you're already a loser--that's the amount a regular Visa or Mastercard gift card costs. Unless you have mad skills most people don't have, then you can't spread this loss (+ a $4/pop bid cost) over many cards.

Posted by Cute at 12:34 AM

Labels: financial (non-tax)