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0 pointsthaumasiotes5y ago0 comments

> and how could gift cards ever be cheaper than face value (surely someone somewhere would be working at a loss)?

Gift cards are always cheaper than face value. The basic economics tells you they can't be more expensive than that, since they are similar to money, but worse. They can easily be cheaper; $300 at Starbucks is not as good as $200 wherever you want.

Your incredulity is pretty shocking; if you want to see gift cards sold cheaper than face value, all you need to do is walk into a Costco.

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goblin895y ago

I use gift cards regularly to unlock country-specific content stores (such as Steam and others) other than where my bank or physical location is. Not once have I seen a gift card supplier that sells them cheaper than face value.

Where does your experience come from? It seems appallingly out of touch.

mlyle5y ago

At Costco and other stores, you can often purchase gift cards for a bit below face value.

When Apple, Amazon, etc, seek to have retailers carry their gift cards, the retailer needs to have an incentive. So the gift cards are usually sold for below face value to the retailer. In turn, some retailers will sell gift cards for below their face value.

So, e.g., at this moment, Nintendo eShop $50 cards are $44.99; XBox/Sony Playstation $100 gift cards are $89.99; a $500 gift card on Alaska Airlines is $449.99; $100 at Hulu is $89.99.

These are not particularly good prices. Oftentimes Apple $100 gift cards will be $79.99.

The other incentives at Costco still hold, too; you can get the Executive Membership 2% back and the 2% credit card cash back.

goblin895y ago

If I wanted to use a US content store and in fact lived in the US (which sounds like a prerequisite for being able to enjoy those Costco discounts), presumably I would not need to purchase gift cards in the first place.

Where gift cards are available, they are never cheaper than face value due to basic market dynamics.

In retail stores in non-Western countries I have never seen a gift card with e.g. 100 unit value sold for less than 100 units either, although I haven’t specifically looked for such.

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compsciphd5y ago

https://www.giftcardgranny.com/

goblin895y ago

I peeked. (A) Cards I use are not there, (B) an Apple Store US$100 card is sold for $100, and (C) US payment method is required, which kind of defeats the entire point. Good try though.

In this thread, a fundamental misunderstanding of how gift card market works seems to prevail.

There’s basic arbitrage. Vendor Acme in region X locks out people from region Y (e.g., based on payment method address); Alice lives in region X and can buy an N value Acme gift card for N-1 at a local store; Bob lives in region Y and wants to transact with Acme; Alice buys a gift card for N-1 and sells it to Bob for N+1 online; Bob gains the ability to transact with Acme, Alice gains 2 as revenue.

Thus, gift cards going for higher than face value does not automatically imply anything beyond a market acting as it should and is not specific to Amazon in any way.

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goblin895y ago

Where does your experience come from? It seems appallingly out of touch.

mlyle5y ago

At Costco and other stores, you can often purchase gift cards for a bit below face value.

So, e.g., at this moment, Nintendo eShop $50 cards are $44.99; XBox/Sony Playstation $100 gift cards are $89.99; a $500 gift card on Alaska Airlines is $449.99; $100 at Hulu is $89.99.

These are not particularly good prices. Oftentimes Apple $100 gift cards will be $79.99.

The other incentives at Costco still hold, too; you can get the Executive Membership 2% back and the 2% credit card cash back.

goblin895y ago

Where gift cards are available, they are never cheaper than face value due to basic market dynamics.

In retail stores in non-Western countries I have never seen a gift card with e.g. 100 unit value sold for less than 100 units either, although I haven’t specifically looked for such.

1 more reply

compsciphd5y ago

https://www.giftcardgranny.com/

goblin895y ago

I peeked. (A) Cards I use are not there, (B) an Apple Store US$100 card is sold for $100, and (C) US payment method is required, which kind of defeats the entire point. Good try though.

In this thread, a fundamental misunderstanding of how gift card market works seems to prevail.

Thus, gift cards going for higher than face value does not automatically imply anything beyond a market acting as it should and is not specific to Amazon in any way.

1 more reply

j / k navigate · click thread line to collapse