[IMPORTANT UPDATE as of 8/24/2019 – This article talks about successful online liquidation for US Bank VGCs for low fees using the DoxoPlus subscription feature at Doxo.com. At this time, these cards are no longer working with Doxo. If you purchase US Bank-issued GCs at Kroger, please be aware that you will probably need an alternative liquidation method. However, the MS method discussed in this article can still be useful with liquidation through Bravo at a 2% fee.
We have added a more comprehensive update article on Middle Age Miles, which you can access here: Update to MS DP Episode 8 – Doxo No Longer Working to Liquidate US Bank VGCs (August 26, 2019).]
In Episode 8 of our Manufactured Spend Data Points (MS DPs) series, we’ll review our purchase of a $500 Visa Gift Card (VGC) that we purchased from Kroger on July 27.
We’ve been excited to get to this episode in our MS DP series, as this has been the best deal we’ve discovered so far. (And it’s funny that the 8th episode of our series is running on 8/8!)
As always, remember that we’re total rookies when it comes to manufactured spend (MS), and we’re sharing experience far more than expertise in this series – including our own mistakes! The trial-and-error process is a huge part of the MS learning experience. Also, remember that we’re exploring online liquidation methods, as we know many people prefer doing this online rather than using methods that require an in-person visit to a store.
- Total purchase price = $505.95
- GC value: $500
- Purchase fee: $5.95
- Note that we added some grocery items to our GC purchase
- Rewards from cards, offers and/or portals
- Dosh, 5% with a $10 cap = $10
- Paid with Amex Gold earning 4x at supermarkets = 2,024 Membership Rewards (MR) points
- Worth about $30.36 at our baseline value of 1.5 cents per MR point
- Acquisition summary for this card:
- Acquired $500 VGC
- Net cost = $495.95 (considering fee and Dosh cash back)
- Points earned = 2,024 MR points, worth about $30.36
- We’re ahead by about $34.41, pre-liquidation
- VGC characteristics:
- Variable-load VGC with $500 max load
- Issuer: US Bank
- Can be registered? Yes (but we didn’t see a way to set up a PIN)
- Website: www. prepaidgiftbalance.com
- Card was registered prior to any attempted use
Other questions related to acquisition:
No problem with Amex MR points posting, right? Correct. Everything looks to be in order on the MR-earning side. Here’s a screenshot of the relevant entry from our Amex online account:
Haven’t people had problems with GCs issued by US Bank in the past? Yes, US Bank-issued GCs have been the subject of some fraud. There is a good article by Grant at Travel With Grant here, and another by Sam at Milenomics here. We don’t know the extent to which hacking of US Bank GCs may still be an issue today. We would say to inspect the packaging of each card you purchase carefully before buying, and perhaps stay away entirely if you’re in a hot area for fraud mentioned in the articles, like certain parts of southern California.
Given that this was a new type of GC that we hadn’t experimented with before, we tried a payment to a Citi credit card account using Doxo. We discussed Doxo at some length in Episode 3 of this series, and you’ll recall from that episode that we had subscribed to Doxo’s premium service, DoxoPlus, for $9 per month.
Our first several attempts to use GCs for fee-free payments with our DoxoPlus subscription had failed, as we reported in Episodes 3, 4, 5 and 6 of this series. We had become frustrated with this service and were on the verge of canceling it. But we had already paid for a month, so we figured we’d keep experimenting during that time. We entered this VGC into Doxo and set it up for a payment directly to Citi on one of our credit card accounts.
And – believe it or not – this US Bank-issued VGC worked for a fee-free payment on DoxoPlus!
This has been the best find so far of our online liquidation experiments. With the fee-free payment using a DoxoPlus subscription, liquidation costs on this type of card are minimal. Here is the detailed info:
- Liquidation method: Doxo, using DoxoPlus service
- Payment made to: Citi Cards, for an outstanding credit card bill
- Payment: $500.00
- Payment was scheduled to be delivered electronically, 3 business days after we requested it
- Direct fee: $0
- Indirect fee: $2.25 (effectively 0.45%)
- To get this number, we’re prorating the $9 monthly fee, allocating 1/4 of it to this transaction, since this $500 transaction uses 1/4 of our $2,000 monthly DoxoPlus fee-free limit.
The payment has already correctly posted to our Citi account, and it even happened one business day early – in 2 business days rather than the 3 that Doxo estimated when we set up the payment.
Other questions relating to online liquidation using Doxo, with a DoxoPlus subscription:
Have we been able to successfully repeat this experiment? Yes, we’ve now done it multiple times, and it has worked. We have successfully paid a Chase account in addition to the Citi account in this experiment. An experiment to pay an Amex account is in progress.
Have we found any other types of GCs that work for fee-free payments using DoxoPlus? No, not yet.
What is it about a US Bank-issued VGC that causes it to work on DoxoPlus when other GCs don’t? We don’t know. We haven’t been able to discern anything about why this card would process differently and qualify as an “approved financial instrument” for DoxoPlus. The only thing we know of that’s different about this type of VGC is that it’s issued by US Bank.
Can you set up a second Doxo account and second DoxoPlus subscription, so you can liquidate $4,000 per month instead of just $2,000 (for an extra $9/month)? We believe the answer is yes. We have successfully set up a second account, using a different email address from our first account. We successfully subscribed to DoxoPlus on the second account, and our credit card has been charged for the monthly fee. We have made one payment using the second account that processed correctly. The payment has not yet posted to our account, but there’s another day or two before it would be expected to post.
Is there any other trick about DoxoPlus that might save you a few dollars? Yes. You can actually subscribe to DoxoPlus for $3.99 for your first month. As soon as you enroll in Doxo, before you attempt a payment, click in the upper left corner of your Doxo screen for a drop-down menu, then click on “doxoPLUS Subscription.” There, you should be presented with an offer for a discounted first-month DoxoPlus subscription fee of $3.99.
Final Accounting for This Experiment
We acquired and liquidated a $500 gift card for a net cost of $498.20, leaving us with a cash profit of $1.80. Plus, we earned 2,024 MR points, worth about $30.36.
That’s a great deal, and our best result yet in this MS DP series. And the good news is that this seems to be repeatable, and thus scalable, at least to a point. It doesn’t rely on any promotions to discount the purchase fee, and it doesn’t rely on any one-time offers.
Scalability limitations exist, though, including:
- The Dosh cashback offer is limited to $10 per day, so it can only be used for one VGC per day (per Dosh account, at least)
- A DoxoPlus subscription is limited to $2,000 in fee-free transactions per month
- It does look like you can get a second Doxo account and second DoxoPlus subscription, using a different email address, but at some point this becomes a limiting factor
- The Amex Gold 4x bonus earning category for US supermarkets is capped at $25,000 per calendar year
- It’s possible to hold multiple Amex Gold cards, but each one will have a $250 annual fee
In addition, remember that the Dosh offer at Kroger could change or entirely disappear at any time, as we’ve seen with other Dosh offers. A change by Dosh would definitely impact the math on this deal.
Strategically, we’d also note that the strategy outlined in this experiment/article should work to MS on the Amex Hilton Surpass card, in order to hit $15k in calendar-year spend to earn a Hilton Free Weekend Night Certificate. Remember that US supermarkets are a 6x bonus category on the Surpass card, which makes this strategy very attractive. The math on a single $500 card using this deal on Surpass would be that you’d still make $1.80 in cash profit with Dosh net of purchase and liquidation fees, plus you’d earn 3,036 Hilton Honors (HH) points. At our baseline value of 0.5 cents per HH point, the points would be worth about $15.18, which makes this still a solidly profitable deal, in addition to generating spend that should count toward the $15k threshold for a Free Weekend Night Certificate.
We hope you’ve enjoyed Episode 8 of our MS DPs series. This is the best opportunity we’ve found, given the combination of the Dosh offer on the acquisition end plus success with our lowest online liquidation method to date using DoxoPlus. Please feel free to comment on our efforts!
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