Manufactured Spending- Emergency Exits

My last post got me to thinking about holding and liquidating prepaid Visa/Mastercard debit cards.  If you're reading this, you likely know that virtually all prepaid debit cards now come with (or can be assigned) PIN numbers.  Which means, or at least has meant, that one could easily liquidate them by purchasing money orders.  This week we saw the demise of one of the easiest and cheapest sources of manufactured spending when Walmart ceased accepting OneVanila Prepaid Debit Cards for the purchase of money orders.  Fortunately, most of us have alternative sources for liquidating the cards.

But what if those go away too?  (As could easily happen since Western Union is the source of virtually all money orders).  And what if you have a pile of debit cards on hand when that happens?  You could, of course, liquidate them at a rate of $2,000/mo via Amazon Payments. (Amazon Payments was shut down, effective Oct. 13, 2014).  Or you could use them for your everyday expenses.  Or you could take a small loss by purchasing giftcards for resale.  For example, most grocery stores have a pretty good gift card rack that includes gas cards.  Exxon gas cards can be sold to Cardpool.com for 92% of face value.  Linking to Cardpool through Topcashback.com will earn you an additional 4% on the sale price for your first $1,000.  So, for a hypothetical MSer holding $1K in gift cards that he absolutely had to liquidate the results would look like this:

$1K in Visa --> $1K Exxon
$1K Exxon sold to Cardpool- $920.00
4% from Topcashback -           $ 36.80
Total Recouped-                      $956.80

Ouch, that's nearly a 5% loss!  The rate gets worse after that first $1,000 because you lose the TCB bonus (Unless you signed up for multiple Cardpool accounts).

But wait, if your grocery store has a Fuel Rewards type program, you'll be earning some gas credit on the purchase too.  For instance, Winn-Dixie regularly offers 5cpg (up to 20 gallons) off for each $50 in gift card purchases.  So the numbers could look like this:

$1K in Visa --> $1K Exxon
$1K Exxon sold to Cardpool- $920.00
4% from Topcashback -           $ 36.80
$1 off 20 gallons-                     $ 20.00
Total Recouped-                      $976.80

Ugh, still a 2.5% loss.  There are other ways to liquidate cards (Amazon Payments, etc.) but almost all of them are going to entail some loss.  Once again, the lesson is: don't overextend.


P.S.:  Cardpool limits Topcashback commissions to the first $1K sold per Cardpool account.  (Hint).