Mastercard is on my mind today, so let’s talk about a couple of deals and then add some commentary because it’s a wordy Monday:
The Deals
1. On Friday we thought that Staples was running a fee-free Visa gift card starting yesterday and running through Saturday. But first thing yesterday morning Katie let me know that the ad is wrong. Instead, Staples is actually running a Mastercard fee-free gift card sale yesterday through Saturday, limit five per transaction.
2. Office Depot/OfficeMax is running a sale on Mastercard gift cards yesterday through Saturday too, putting them in direct competition with Staples. This deal is a better one from an earning perspective: you get a $15 rebate on $300 or more in Mastercard gift cards. When you buy two gift cards you’ll earn $1.10 after fees, and you’ll get another $10 back from Dosh as long as you’ve linked your card in the app ahead of time. Given several reports of Dosh looking harder at obvious gift card transactions, I’d add some staples or rubber bands to my purchase going forward.
Commentary
We’ve talked about how Visa and Mastercard aren’t the same before, but let’s add a little more: By default, Visa and Mastercard gift cards are treated like any other debit card in backend payment processing systems, even though they have higher fees than a traditional debit card. Because the fees are higher, payment processors will often block prepaid cards in a whack-a-mole style fashion as usage grows. When they block, they block by BINs (the first 6 digits of a card number — but soon to be 8 digits). This gives us our first takeaway:
- BINs that are less commonly found at major retailers are more likely to work for our many liquidation techniques.
Now let’s tie this into Mastercard gift cards with some useful background information: In the height of the money order manufactured spend craze between 2014 and 2019, Mastercard gift cards got a bad wrap because at Walmart, you had to use the “change payment trick” when liquidating one of them. That trick was error prone and it gave certain cashiers bad vibes which only made things worse. So, many big time manufactured spenders simply wouldn’t buy Mastercards and prevailing wisdom in the community became “Visa gift cards are better”. That brings us back to the first point with a twist:
- Mastercard gift cards are less commonly used in manufactured spending, and as a result they’re more likely to work for our many liquidation techniques.
The above datapoint isn’t just theoretical either. There are multiple liquidation methods in use today that work with Mastercards but not Visas. So, maybe take deals listed above as a bigger opportunity than you may have initially considered.
