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In previous posts (such as this one), I defined the Perpetual Point Machine (PPM) as “a scheme in which, after a little push, hotel points and/or airline miles are accrued over and over again, forever, with little or no additional work or money.” We have yet to identify a perfect PPM, but it has been fun and rewarding pursuing it. Today I’ll describe a PPM that works as long as certain pieces are in place. Here goes:
Step 1: Buy Sears gift cards via Ultimate Rewards Mall
As long as you have a Chase credit card that gives you access to the Ultimate Rewards Mall (see Preparing for Miles), you can log into the Ultimate Rewards Mall, click through to Sears, and buy gift cards. The Ultimate Rewards mall is currently offering 4 points per dollar if you log into your Sapphire or Ink Bold account, and 5 points per dollar if you log into your Freedom card account.
Step 2: Upgrade to EBay gift cards
Find the gift card rack in your local Sears or Kmart to see if they sell EBay gift cards. If so, use your Sears’ gift cards to buy EBay gift cards. Note: not everyone has found these in their local stores so this might not work for you.
Step 3: Use EBay gift cards to buy Walmart gift cards
Usually, low denomination Walmart gift cards are overpriced on EBay, but I’ve found that $500 gift cards are often available for less than face value. Even at face value, this is a bargain since EBay will award you with 2% back in the form of EBay bucks which can then be applied toward future purchases.
Step 4: Use Walmart gift cards to buy Visa gift cards
Walmart sells $200 Visa gift cards online for $206.24 and they will let you use Walmart gift cards to purchase them. As long as you buy your Walmart gift cards for a bit less than face value, the 3.12% fee will not cost you much out of pocket. Once you receive your Visa gift cards, you can go back to step 1 and use those gift cards to buy more Sears gift cards!
Add it up
Let’s say you start with $1000 in Sears gift cards. From this initial purchase, you will get at least 5000 Ultimate Rewards points (1 point per dollar from your credit card and 4 points per dollar from the UR mall). You then upgrade to 20 $50 EBay cards at no extra cost to you (except your time). You then buy 2 $500 Walmart cards for, say, $490 each on EBay. From that purchase you will get back $9.80 in EBay bucks. So, you now have a total of $29.80 in EBay money to use later. You then buy 5 $200 Visa gift cards from Walmart using your gift cards plus $31.20 of your money to cover the gift card fees. So, after round 1, your $1000 has come back to you in the form of Visa gift cards, and you have earned 5000 Ultimate Rewards points (worth $65.50 in Fair Trading Price) and $29.80 in EBay credit which is almost exactly offset by $31.20 in fees.
In subsequent passes you will earn fewer Ultimate Rewards points since you will no longer use your points earning credit card for buying the Sears’ gift cards, but you will still earn at least 4000 points. Over time, your EBay credit will increase enough to buy an extra Walmart gift card and you can then increase the size of each cycle (e.g. buy $1500 worth of Sears’ gift cards instead of $1000).
Analysis
Is it worth the trouble to do this PPM? For me, no, not really. Even though I have two local stores in which I can upgrade to EBay cards, it is still a hassle to do. If / when Sears goes back to 10 points per dollar in the Ultimate Rewards mall, though, I might then be tempted…
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Chris–I only have one PayPal account and have not yet reached the 5K limit. Upon reading the PayPal T&C it seems that an individual can have up to two PP accounts; one personal and one business/premier.
You say you found about the eBay gift card $5000 limit the hard way—did they actually cut you off when you reached it? I don’t really understand this policy since they still make money from sellers even if the buyer is using a gift card.
Paul does hint at the possibility of creating multiple PayPal accounts, which would expand this limit. However, even to get the $5,000 limit, it needs to be a “verified” PayPal account, so multiple accounts might not be possible. I haven’t tried to create multiple PayPal accounts. I may have to look into this, but don’t want PayPal to blacklist me and close my main account, if I try to create multiple accounts.
Great idea overall, though! And thanks for sharing your great ideas! I’ve learned alot.
Yep Paul, I found out about the eBay giftcard $5,000 limit the hard way. T&C #11…
http://pages.ebay.com/giftcard/terms_conditions.html
Great post!! I’ve been doing a modified form of this ppm for awhile now and it has worked well. It only works on a limited scale, though, due to PayPal’s T&Cs :
“No more than a total of $500 in Gift Cards may be used per eBay purchase. Further, unverified PayPal accounts are limited to a total of $500 in Gift Card purchases in any 30-day period and verified PayPal accounts are limited to $5,000 in Gift Card purchases in any 180-day period.”
Unless you open several PP accounts, you are limited to $5K in Ebay gift card purchases per six month period.
Paul: thanks for that info. That certainly does limit how far you can reasonably take this.
I see it now. Duh
1000-980+9.80=29.80. I got lost with the 20*50 GCs.
I am only seeing $100 Visa gift cards for sale online at WalMart, priced at $105.38 each. Has anyone been able to find the $200 Visa cards online lately? Perhaps this is just a temporary shortage…
Btime333: Hmmm. You’re right. I do see $200 Mastercard and Amex cards though. Same idea.
Looks like aeroplan has changed it to 1 mile per dollar spent on ebay. It used to be 2 miles per dollar spent.
lovetofly: Awesome addition (even at 1 mile per dollar). Thanks!
No, i wasn’t referring to big crumbs. I’m referring to the Aeroplan estore: http://www2.aeroplan.com/estore
If you go through that portal to purchase anything from ebay, you will get an additional 2 aeroplan miles per dollar spent.
So, if you buy a walmart gift card for $500 from ebay canada website by going through Aeroplan portal, you will get 1000 aeroplan miles as well.
You are buying the same item and paying in US dollars. The only difference is you are going through the ebay canada website instead of the ebay USA web site.
Hope that makes sense.
Over the Christmas holidays I bought Sears gc but was working on meeting the minimum spend on another card so did not have a Chase Sapphire. Instead of using the UR mall I used Priority Club Shopping, which was offering 12 points per dollar spent. When I look on evreward I see lots of online malls that offer points for Sears purchases (http://evreward.com/store/go/1938), so wouldn’t this PPM work with others besides UR, as long as they credit gc purchases? PC Shopping gave me the points within a week or 2 with no issues.
Larry: Yes, this would work with other portals (except Aadvantage eShopping which doesn’t give miles for gift card purchases). Ultimate Rewards points are worth a lot more than Priority Club points so I prefer to go that route (even at 4 or 5 points per dollar).
lovetofly: Yes, thanks for pointing out some of the additional nuances! Regarding ebay Canada, are you talking about Big Crumbs? If so, I thought that option died back in October.
Steelsnow: Thanks for the comment. Yes, I should have given you credit above for this one!
rharrigill: Have you tried burrying it in a pile of other stuff? e.g. buy a bunch of tissue boxes, cereal, etc. and a couple of EBay cards?
caveman: I’ve heard that a lot from California based readers. Maybe its a regional thing. Has anyone found EBay or BP cards in California KMarts or Sears?
Good ppm. However, keep in mind that when you try to purchase your sears gift cards with your $200 visa cards, you may have to make multiple transactions (for example if you want to buy $1000 in sears cards). You will also have to register each visa gift card individually so that you can use it for online transactions. Third, since the transaction is not on a chase card, no guarantee that you will get the points and if you don’t get them, can’t really fight for them. Seems like a lot of work. But, the idea is good.
Don’t forget ebay canada to make the deal sweeter 😉 if you know what i mean.
@ Caveman: When I thought up this PPM (it might have already been know, but I hadn’t seen it anywhere) and shared it with FrequentMiler back in late November / early December, I was really excited! Then I went looking for the EBay and BP gift cards… They are no where to be seen in NorCal, which killed it for me. As Thomas stated above, it’s a sweet machine at the 10 points per $ rate…. But FM knows that once it’s out that Wal-Mart cards on Ebay are going to become much harder to find, especially if the UR rate for Sears ever goes back to 10/$.
My local Kmart would not allow me to buy ebay gift cards with a Kmart gift card. Has anyone else had this experience? I tried two different cashiers and both turned me down.
Nice machine. You remind me of back to the future movie series. However there is one big flaw. This machine has no use for me. I have searched Kmart and Sears in Sacramento, Stockton areas without any luck for ebay GC.
Can you explain how you got 29.80 in ebay money?
“From that purchase you will get back $9.80 in EBay bucks. So, you now have a total of $29.80 in EBay money”
Where did the other $20 in ebay money come from?
Steve: Sorry, that wasn’t clear! I had $20 left over from the EBay gift cards I bought. Remember, I bought $1000 worth of EBay gift cards, but I spent only $980 from those cards in order to get the Walmart gift cards. Does that help?