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| Sometimes you can make a profit from prepaid debit cards, but think carefully. |
My wife told me to think about this carefully. We were having lunch at a nearby restaurant and they offered us a deal: buy a $50 gift card and get a $10 gift card free. It sounds like you are getting a good deal. But my objection was that we don't eat at this restaurant very often. So why would I want to give them more money? My wife pointed out something very important to me.
We have enough friends and relatives that we buy gifts for we could give the $60 in gift cards away, saving ourselves a little cash on birthday, anniversary, and holiday presents. Some of these restaurant deals are made in a 25/5 form: you buy a $25 gift card and they give you a $5 gift card.
So if we budget about $30 for a gift we can just pay $25 for the gift card and get the last $5 free. It sounded like such a good deal that I reluctantly agreed to buy 10 gift cards for $250. We had to do this over 2 days because the restaurant manager said there was a limit. But we got $50 in free gift cards.
I hate to say it, but I could almost go to town on a deal like this. I guess that is why restaurants don't do this very often. We may only give out the 10 $25 gift cards and use the other 10 $5 cards for ourselves. I would feel a little cheap handing a server 5 gift cards to pay for a $25 check but if the restaurant is going to hand out free money, why not take advantage of it?
They should get their $250 in the end and we all know that people may buy more if they have gift cards because they won't feel like they are making a big purchase. So we bought 10 birthday presents for the rest of the year and we don't have to worry about whether we are getting the right gift for the right person. You know, it kind of works out.
You can get similar deals if you buy the gift cards at BJs or Cost Co. I see these deals all the time, where you pay $80 for a $100 gift card (or two $50 cards). It's going to be hard to pass them up the next time I walk in there. But my wife and I agreed we would only buy these cards to replace purchases we normally make anyway. In other words, if buying the cards does not truly save us money we will pass up on the deals, no matter how good they are.
What I would like to see are grocery debit cards where you get an extra $5 or something. But I can see how that is not practical for the grocery stores. It's not like we're tipping the cashiers for checking out our groceries. There is no opportunity for upsell at the grocery store because they are already putting things on sale, offering coupons, and honoring manufacturer or competitor coupons.
Maybe one day these debit cards will go away but I am hoping that we'll eventually just switch to an electronic payment system anyway. I heard that the United Kingdom is going to something like that. No more checks (or cheques as they put it over there). Without written checks you either pay cash, by card, or online. If they get rid of cash then you just have cards and online payments.
But the most important point for me will be to find the right incentives. If companies keep giving away money I want my cut. I am sure everyone feels that way.
