Bad news for Best Buy resellers

Bad news is out today on the resale front: likely both from the product resale and gift card resale angles. As GC Galore reported this morning, Best Buy is prohibiting paying with gift cards while using guest checkout on some items. This move is likely aimed at curbing product resale, which is in turn affecting gift card resale negatively.

At this point, it seems that the combination of using guest checkout and paying with gift cards is only prohibited on some items according to reports. My bet is that this is aimed at preventing resellers from buying up hot Black Friday / Cyber Monday items and reselling them. I think the retailer perspective here is that they offer these great deals in order to attract more customers (and create excited / happy customers who will in turn spend more). Resellers make it so that the store can’t create those desired happy / spendy customers. Therefore, they are looking to curtail that behavior.

This is obviously bad news for those looking to buy and resell those items, but it is also bad news for those who resell Best Buy gift cards. It has often been possible to get very high resale rates on Best Buy gift cards on the secondary market — largely thanks to resellers willing to pay full face value so that they can buy more products. Many people have probably taken advantage of various credit card bonuses to buy and resell those cards. If you’re in that boat, I’d obviously recommend not stocking up on any more Best Buy gift cards for the time being lest you get stuck with them. I would further be nervous about the buyers on those cards — hopefully they are all in a position to still meet obligations on gift cards they have committed to buy.

This is why I urge caution on resale. When writing about buyers clubs recently, I wrote about what happened with The Plastic Merchant and how that influences the risks I’m willing to take these days with resale given that it is hard to predict when the resale game, particularly with buying clubs and gift card resale, may come crashing down. Don’t get in over your head.

It may be that this will be a temporary change, but if things go back to “normal” don’t forget that there’s no telling if or when it could become a more permanent change.

H/T: GC Galore

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