My type of MS: Stacking and Reselling Neiman Marcus

This afternoon, we posted a Quick Deal for a gift card event at Neiman Marcus. That deal stuck out to me because my style of Manufactured Spending has long been reselling, and I’ve generated a lot of miles & cash back through reselling things I bought from Neiman Marcus. Today’s event is best maximized with cash back, but this event is common and I have often taken advantage of these gift card events to pad my mileage balances as well as earn a small profit. Here’s why and how. Note that if you’re not interested in reselling, this post is not for you.

Why I like the Neiman Marcus gift card events

Neiman Marcus is generally an overpriced department store. However, when you stack these promotions with portal payouts, you can get a deal good enough to resell. These gift card events come around almost monthly and often last at least a few days (though today’s is marketed as a 1-day event). Sometimes there are hoops to jump through (like you must order at least 1 handbag and 1 apparel item), sometimes certain categories are excluded (like beauty & fragrances). However, today’s event includes most items that aren’t on clearance. If you meet one of the spend thresholds, you will get the gift card that corresponds with it (delivered in about 8 weeks, valid for about 2 months from issue).

Additionally, I like that Neiman Marcus offers free Shoprunner 2-day shipping on most items. And due to the store’s limited footprint, I think there won’t be sales tax collected for most states.

Here’s how I like to stack the promo events:

Step 1: Buy gift cards

In the past, I successfully placed many double-dip orders where I earned miles or cash back on the purchase of eGift cards and then again on the use of the gift card – despite portal terms that say they exclude this. When the Neiman Marcus Amex Offer and Alaska airlines portal promotions coincided this past winter, Alaska did not award the miles on purchases of gift cards. I was very surprised when that happened as I had been buying gift cards at least once a month and earning miles or cash back for the past couple of years. Since the Alaska debacle, I haven’t bought more gift cards. However, there is at least one report in our Laboratory of a reader who had success in earning cash back when buying an eGift card since then:

In a nutshell, I’m not convinced that the Alaska clawback was a long-term death of the Neiman Marcus double dip.

If the double-dip is still alive, the first step would be to buy Neiman Marcus eGift cards using a shopping portal. Neiman Marcus eGift cards are delivered by email. In my experience, they are delivered in the afternoon on the next business day the vast majority of the time (though I have had a couple of orders that took a few days).

Today, Ebates is offering 12% cash back. If you have an Amex card that earns Membership Rewards points, remember that you can register that card to earn an extra 1X at Neiman Marcus. If I were taking this path, I’d use the Blue Business Plus as I would earn a total of 3X (2X on the first $50K in purchases each year + 1X extra through that linked promotion). Read about adding the offer to the Blue Business Plus (or your other MR-earning cards) here.

If you prefer cash over points, another interesting option would be to use Five Back Visa Gift Cards to buy Neiman Marcus eGift cards (or to buy Neiman Marcus merchandise if you skip out on the double dip). Five Back Visa Gift Cards are available for a fee as low as $3.95 per $500 at Simon Malls. For simplicity’s sake, I am going to call the cost of the Five Back Visa a flat $500 in my math below because almost any credit card you use to buy the Five Back Visa cards will earn a greater return than the activation fee, making your actual net cost less than $500. If you don’t have a Simon Mall nearby, your Office Max / Office Depot may sell variable-load Five Back Visas (up to $200). While the activation fee is higher, you can easily earn 5X/5% at an office supply store — again, putting your net cost under face-value of the Visa Gift Cards you buy.

I like the idea of using the Five Back Visa route because it ensures that will:

• Earn rewards on buying the Five Back Visa
• Get at least 5% back on the purchase of Neiman Marcus eGift cards (from the Five Back Visa)
• Possibly also earn cash back from a portal when buying the gift cards

Note About Portal Terms

Ebates portal terms state that cash back will not be paid on the purchase or redemption of gift cards. While it is certainly possible that they will begin enforcing this term today, the fact of that matter is that I’ve placed many orders through Ebates — both purchasing and redeeming gift cards at Neiman Marcus. Here was an order where I bought a gift card last year:

And here was a time when I redeemed gift cards this year:

Does that mean that Ebates will definitely pay out on the purchase or use of gift cards? No — they might not, and if your purchases don’t track automatically they aren’t going to help. It’s definitely a gamble, but it’s one that I am going to take today in the name of science (and I’ll update the laboratory with my results).

Step 2: Go through a portal to buy merchandise

The next step is buying merchandise. Assuming you are now spending $500 on merchandise, you could earn 12% back ($60) through Ebates. Alternatively, you could choose to earn miles — though, even with Back-to-School shopping portal promotions, the return isn’t very good via miles today.

The challenge is going to be choosing which items to try to resell. You’re not likely to find items that you will sell for more than the $500 you will pay for them — but that’s OK (we’ll see why in a minute). The objective here is to find things you think you can sell for as close to the Neiman Marcus price as possible. There is some risk here. The difference between reselling and traditional manufactured spending is that there is much more risk involved in reselling. Things sometimes go wrong. Take that into consideration before getting involved and when choosing what to buy. On the flip side, reselling can also be fun — you get the thrill of shopping without the buyer’s remorse (most of the time) — and it can be more profitable.

Step 3: Receive a $125 gift card and use it shopping through a portal

About eight weeks after the promotion ends, and assuming that you place your order with promotion code SUMMERNM and choose qualifying merchandise, you’ll receive an email with a promotional gift card for $125 based on your $500 purchase. Next let’s say you use that gift card through a shopping portal. Let’s say you only get 8% back – a fair assumption based on the 15-month historical payouts according to CashBackMonitor:

As you can see, sometimes you can do quite a bit better — whether in miles or cash — but an opportunity to earn at least 8% presents itself pretty regularly. That’s another $10 in cash back. Buy something with your $125 gift card and resell it for as much as you can.

How you can do

Single-dip

As we only have one report of earning cash back on a gift card purchase since the Alaska debacle, let’s run the numbers as though you only earn cash back on using your $500 Five Back Visa to buy merchandise at Neiman Marcus. Again, I’m going to ignore the fee on the Five Back Visa for the reasons outline above. Assuming you use a Five Back Visa to buy exactly $500 in items through Ebates today, you would earn:

$25 cash back from the Five Back Visa (5%)
$60 cash back from Ebates (12%)
$10 cash back when using your promotional gift card eventually (8% estimate)
$95 total cash back (plus presumably points or cash back when buying your Five Back Visa)

You will have spent $500 – $95 = $405 and received $625 in merchandise ($500 now, $125 with the future gift card). In other words, you’ll have spent about 65% of the retail price on your $625 in purchases. The trick would be in finding items that can net you more than 65% of the Neiman Marcus price.

Double-dip

If the double dip works, the math becomes much more attractive. Assuming you earned 12% on the purchase of a gift card and 12% of the use of the gift card, your math would look like this:

$25 cash back from the Five Back Visa (5%) when buying an eGift card from Neiman Marcus
$60 cash back from Ebates (12% on purchase of Neiman Marcus eGift card)
$60 cash back from Ebates (12% on use of Neiman Marcus eGift card)
$10 cash back when using your promotional gift card eventually (8% estimate)
$155 total cash back (plus presumably points or cash back when buying your Five Back Visa)

Now you will have spent $500 – $155 = $345 and received $625 in merchandise. At that point, you’re spending about 55% of the retail price. That makes it a lot easier to find profitable items.

Go big or go home

All that said, I’ve personally found it easier to ramp this up and spend the full $2,000 to max out the promotion. Assuming the double dip works and stays at 12%, the numbers look like this:

$100 cash back (from using Five Back Visas to buy $2K in eGift cards from Neiman Marcus)
$240 cash back from Ebates (12% on purchase of eGift cards)
$240 cash back from Ebates (12% on use of eGift cards)
  $40 cash back when using your promotional gift card eventually (which will now be a $500 gift card, 8% back estimated)
$620 cash back (plus presumably points or cash back when buying your Five Back Visa)

Now you will have spent $2,000 – $620 = $1380 and received $2500 in merchandise ($2K now, $500 with the future gift card). While that is the same proportion (about 55% of the retail price), I find it easier to diversify my purchases into a variety of larger-ticket items that are more likely to fetch something closer to the retail price. If the double dip doesn’t work, you’ll be in for $1620. That’s certainly less attractive to me considering the time and risk involved, but still not impossible to turn a profit. If you catch a mileage portal at something like 15 or 18 miles per dollar (not available right now), you might consider mixing cash back with miles. In the past, I have been lucky enough to double dip miles at high payouts a number of times while also finding items I could sell for a net 90% of the Neiman Marcus price. On a $2,000 purchase plus gift card event, that has meant that I’ve occasionally made a couple hundred dollars while also bringing in 40K miles or more.

They have other promotions, too

The gift card events are sometimes structured a bit differently. Occasionally, the maximum purchase is $1K. Sometimes, they offer up to a $600 gift card on a $2K purchase. I’ve often been able to roll the gift card from one event into the next event — earning another gift card with my gift card.

Other times, they will run a coupon sale like the one above (an old promotion, not valid right now) that was good for $50 off of $200 or $100 off of $400. I like those sales because unlike many other stores, Neiman Marcus prices a lot of items at even dollar amounts. For a long time, I was buying an item that was exactly $400 – a pair of headphones that is no longer available at Neiman Marcus. That item sold for the same $400 on Amazon. I would buy five pairs for $2K and sell them for a net $360 each after fees and shipping (netting about $1800 on my $2K purchase). Then, I’d hold the gift card waiting for a $100 off of $400 coupon — when I could buy that same item for $300 and sell it for a net $360. I could often turn a $600 gift card into $720 with minimal effort on my part since I just shipped the inventory into Amazon’s warehouse and let them fulfill the orders. Combined with the $1800 from the initial $2K purchase, I would come out more than $500 ahead, not including the miles I earned through a double dip (and then also using the gift card through a portal).

What should you buy?

This is the million dollar question — and one that I can’t answer for you in a helpful way. The item I referenced above has long been gone from Neiman Marcus. Perhaps I could find something right now that would be profitable and point to it for you — but then everyone would buy that one item and tank the resale price. In the case of Neiman Marcus, if you have the math in mind — that you’re looking for an item you can resell for more than 55/65% of the Neiman Marcus price, you can play with buying different items during these sales to see what you can sell successfully. I mentioned a pair of headphones above — but I have bought items from more categories than I can count on all of my fingers and toes testing out demand for different items. I’ve bought everything from housewares to small appliances to silverware to electronics to fragrances and more. I have placed entire orders for one item when I knew it would be profitable — but I generally prefer to diversify risk by buying different items.

Caveats

What I’m suggesting does violate portal terms. There is a chance you won’t get cash back. As I said, I’ll put my money where my mouth is and place two orders today. I have an old leftover gift card and I have a Five Back Visa. I’ll place separate orders to buy a gift card and to use a gift card through Neiman Marcus today and report back as to whether or not I get the cash back. I could be wrong, but I suspect I’ll get it.

Additionally, you have to be aware that Neiman Marcus could cancel items from your order. In several years of orders, I’ve only ever had two orders that included cancelled items — but both times it dropped me down a notch on the gift card scale and reduced or eliminated my profit. Be careful about ordering backordered items — one of those orders with cancelled items was an item I didn’t realize was backordered, and it ended up getting cancelled.

Finally, don’t forget that resale has risk. Items get lost, items get broken, scammers buy items and return them broken or empty. While the vast majority of my reselling experiences have been positive, it’s not for everyone. If you’re new to reselling, my rule is the same as it is in a casino: don’t risk money you can’t afford to lose. Start small and as you find success, you’ll naturally build from there.

Bottom line

Neiman Marcus is an interesting store for resale purposes. I intend to test the waters with the cash back portal terms, but I expect my purchases to be successful. While it is probably late to get involved with the sale this time around, creating an account at Neiman Marcus will put you on the email list. Beware that they send far too many emails (I send them to a designated spam email address that I check but don’t use for important email). However, the upside is that you’ll get email notifications each time they have a sale and can keep your eye out for a combination of high portal payouts and items you might be able to resell. A big plus side of Neiman Marcus is that if you hunt around, you can probably find items that aren’t being resold by many other people — and that low competition can probably help your bottom line.

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