/r/giftcardexchange

Capturing Value

earned-income_gcx

The method of capturing additional value on /r/giftcardexchange (GCX) is simple – buy something of value to you for less than what it’s monetary value is.

Generally I buy Amazon gift cards – I buy on Amazon a lot, the gift cards never expire, and the wide variety of products mean they are a cash equivalent with no non-cash downside (i.e. it’s scripp but without the limiting factors that usually make scripp undesireable).

Depending on who I am trading with, and their reputation, I buy at a 10-15% discount, which equates to a return of 12-18% per dollar.

Occasionally I’ll do an arbitrage – that is, a near simultaneous set of trades where I buy and sell the same card for a profit.  However, I don’t often find sellers and buyers who are willing to trade at rates which would make the arbitrage more profitable than a simple buy – that is, returning more than 12-18% after all trades are complete.

Liquidity

While this method does lead to captured value, and while to me Amazon credit spends as easily as cash – i.e. acts as a cash equivalent – there is one major drawback: unless I do an arbitrage, Amazon credit ONLY spends.  That is, I can only use it to buy products.

Since I am not in the business of resale, the limitation written of above means I cannot generally put that captured value to work – i.e. I cannot invest it – as it lacks the liquidity of cash.

To get around this limitation, I invest cash in an amount equal to the captured value in one of my investment accounts (Acorns, Betterment, Robinhood, or Prosper – all internal links), thus putting the gain to work.

Currently, my preferred account to invest GCX earnings is Prosper as it is reliably earning at a higher rate than the others, even though it’s fees are quite a bit higher than the rest.

 A Note on Earnings

The earnings in the graph above are limited only by how much I trade.  They should not be taken as an indication of any sort of upper limit on the earnings which can be derived from trading on GCX.