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The Most Lucrative Way to Buy American Express Gift Cards
PointChaser / by Ariana Arghandewal / 1 day ago
Cash back on American Express Gift Card

Yesterday, I provided a recap of my manufactured spending activities from the week before. In the comment section, somebody brought up the fact that Top Cash Back (my referral link) offers cash back on only $2,000 worth of American Express gift cards a time. I’ve always ordered them in $5,000 denominations due to previous purchase and credit card limits. There was a time when shopping portal cash back on American Express gift card purchases topped 4%. Taking shipping fees into account, it absolutely made more sense to max out your purchase order at $5,000 (which has since increased to $10,000). However, now that portal payouts are limited to $2,000 (essentially capping cash back rewards at $30) should we be buying American Express gift cards in $2,000 increments?

Below is a breakdown of gift card fees, cash back, and profits for ordering the maximum $20,000 in American Express gift cards every month in increments of $2,000, $5,000 and $10,000. In case you’re wondering about the fee structure, American Express charges a $3.95 fee per gift card and a minimum shipping charge of $8.95 per order. Personal gift cards can be purchased in denominations of $500, $700, $1,000, $2,000 and $3,000. Smaller denominations are available but for the purpose of manufactured spending we’ll only take large ones into account. The easiest way to place a $5,000 gift card order, for example, would be to request two gift cards ($3,000 and $2,000) which would incur $7.90 in fees along with a $8.95 shipping charge:

$2,000 x 10 orders = $129 fees, $300 cash back = $171 profit
$5,000 x 4 orders = $67.40 fees, $120 cash back = $52.60 profit
$10,000 x 2 orders = $49.50 fees, $60 cash back = $10.50 profit
Buying gift cards in $2,000 increments would be the most profitable method. For convenience sake, I’m going to stick to $5,000 orders. I realize I’m giving up over $100 in profits each month, but placing 10 orders in $2,000 increments and waiting two days to get them sounds like a major hassle. I want to place four orders for $5,000, unload them and be done with it. I feel like placing 10 orders every month for the same amount might raise a red flag with American Express. I don’t know that they’ve ever banned anyone from buying gift cards, but I can imagine a friendly phone call to ensure I’m not an identify thief pulling off some elaborate scam.

Plus, seeing 10,000 Arrival Miles post to my account is much more satisfying than a mere 4,000 at a time. That’s only because I’m on a mad dash right now to bulk up on Arrival Miles. When that’s over and I’m just doing this for fun, then I may switch to $2,000 orders and spread them out across my Alaska, Ink Plus, and the occasional SPG Amex order.

Are Amex gift cards part of your manufactured spending strategy? How man are you buying at a time?

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