Here is a common question, which appears in many formats. One version works like this: I see Amazon gift cards on eBay right now that are selling for more than the value of the card. Why is this? I do not get it. If I go to the Amazon website, I pay the face value of the card to purchase a gift card. If I go to Wal-Mart, I pay ten dollars for a ten dollar card, so I don’t understand why people pay a premium on eBay and buy the same card for more than its value.
This has stumped me. I know of people who donate their gift cards to underprivileged children, and I know of people who buy their gift cards cheaply on the second-hand market. (The Plastic Jungle, ABC Gift Cards, and CardCash websites, among others, come to mind.) But people paying more than the value of the gift card? Hey, we can really do it big! We can sell our $ 20 gift cards for $ 25, then buy a $ 25 gift card and sell it for $ 30, and before you know it, we’ll be researching a nice beachfront property. Something tells me this is not real …
Let me suggest my theory. It’s not fancy or conspiratorial, but it’s all I could think of; Perhaps these bidders are using automated software to increase the bid. They may be in cahoots with the seller, or they ARE the seller, and their goal is to maximize the bid. However, since automated software cannot differentiate between an item of indeterminate value and a gift card with obviously limited value, this ridiculous scenario occurs.
What happens when these guys win?
The question in my mind is what happens when they win the auction, and they certainly will, because no one in their right mind will outbid them in their bid, should they pay what they bid? Is this perhaps a business model? Buying low-demand gift cards and reselling them on eBay for full face value or more?
Rolling up my sleeves, I tried to get to the bottom of this. I found that it is common for gift cards to sell above their value. And that the reasons are legitimate and not legitimate. One good reason may be someone too lazy to go to a store. They will overpay to save on gas costs and hassle. Other people want to withdraw money from an account that does not allow them easy access. A PayPal account that does not have an attached bank account is a good example of someone who could use gift cards as a way to withdraw money from their account.
Less legitimate is that drug dealers and terrorist groups looking for ways to transfer money incognito will use gift cards, worth $ 10,000 at a time, as a seemingly harmless place to do so. They will buy these cards as a monetary vehicle. At the border, officials may ask you how much money you have with you, but do they investigate the gift cards in your wallet? And they will pay a premium if necessary, in order to get the transfer.
What is especially disturbing are the schemes of the scammers. Some people will bid $ 120 on a $ 100 gift card because they never intend to pay. They will enter a valid credit card and claim that they have never received the card or that it has already expired. eBay will normally reimburse the buyer. Now the buyer has the merchandise and there is little they can do to prove that the card they sent was not used.
What can you do about it? At its core, the eBay experience is built on trust. If a buyer or seller abuses their position, they will lose the ability to trade on that platform. Therefore, you need to examine whether the person would care about that. Look at the amount of feedback the buyer has and if everything is positive. If they’ve been doing eBay business for a while, they’re less likely to jeopardize their ratings for a few dollars. Plus, their good track record also supports the trust you can have in them. However, someone new is suspected of overselling. Also, try to get eBay insurance that covers a chargeback and put all the security mechanisms in place.