Saturday, January 23, 2010

Get a $25 Gift Card for Only $27!

I've been known to arbitrage eBay, especially when it comes to gift certificates and stamps. I'm willing to pay $24.50 for a $25 gift certificate, even if it requires waiting a few days for the item to come in the mail. Yes, I'm that cheap.

However, there are many gift certificates on eBay that consistently selling for MORE than face value! I've particularly noticed this with Amazon gift certificates (I would do a screen grab, but I'm pretty sure that this is a constant phenomenon, so whenever you click this, you'll see many auctions bid up to above face value, especially if you sort by "ending soonest").

This was discussed a few years ago on Marginal Revolution (see the comments), but I have yet to find a satisfactory answer. The best is:
"I am far enough from an Old Navy that the gas there would exceed the $2."
That's true in some circumstances because of transactions costs: You'll pay slightly more for the convenience of getting something mailed to you instead of going to the store. But this can't be the case with Amazon. Amazon gift cards are available in many forms: you can print them, get them mailed to you, buy them in a store, or just send someone a digital redemption code. It's hard to see why someone would choose to pay more money than face value and deal with the hassle and delay of eBay. Maybe there's some international consideration I'm not seeing, but I would think that getting something through eBay would be just as hard/easy as getting something through Amazon in any country.

The other best answer in the MR comments: "Stupidity."

I've e-mailed a few of the Amazon gift certificate sellers. Only response so far:
"I have no idea why they end up selling for more. I sold a $25 Amazon card for about $46 but then it came back as unauthorized so I don't know if it was really unauthorized or not since paypal still found in my favor as far as I acknowledge."
So, my theory is that it's either an awful lot of stupidity or an awful lot of scamming. Either could be a big black eye for eBay.

UPDATE 5/8: Another theory.

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