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Ask HN: Why do Amazon gift cards sell for more than face value?

15 points by DavidSJ 18y ago

matthias 18y ago
It's due to a Microsoft cashback programme that rewards users for locating ebay items using Live search. https://cashbackaccount.search.live.com/cashback/welcome.aspx https://cashbackaccount.search.live.com/cashback/welcome.asp...
- jcapote 18y ago
  That explains why they are selling; Why would anyone buy them at more than face value?
  - sachinag 18y ago
    No - the buyers got the 30% off. But the eBay/Cashback experiment was reported to have ended after the holiday. Anyway, I'm sure auction psychology and the Winners Curse still has a lot to do with this.
  - lbrandy 18y ago
    Erm. My strong suspicion is the reason people are selling is because the price is higher than the face value.
tsally 18y ago
My first thought was money laundering, but maybe that's just crazy :-p. If you were to launder money through gift cards though, Amazon would be the right choice.
- eatenbyagrue 18y ago
  Probably not that crazy... maybe carders converting stolen cards to cash?
  - alecco 18y ago
    Sounds right. The key problem for carders is the drop place and buying this way disconnects the card with physical address. Plus it could be used as a black market currency. Oh, and ideal for tax evasion at the micro level. The taxman is much better at tracking this type of scams than FBI, no CSI magic but plain old "follow the money." Now, if I were an US three-letter agency agent, I'd be the top seller of this cards and track the hell out of it. I mean, it even gives a profit, no budget issues. Tracking email, IP, and making contacts would be trivial. Could even be done without a court order to PayPal or anything. Selling gift cards isn't a crime, so it wouldn't be entrapment by itself, AFAIK and IANAL.
- trickjarrett 18y ago
  Was my first thought as well, though it would probably be a red flag in these days.
AndrewHampton 18y ago
My guess would be scammers trying to get a free gift card. Who wouldn't enthusiastically send a $75 gift card to someone willing to pay $80 for it?
- sounddust 18y ago
  I'm sure at least some of these are going to people who are buying them with stolen credit cards or other scams. But it seems that there would be less fraud with gift cards, since they could be remotely disabled and are traceable. That having been said, who knows if Amazon and others actually help victims of fraud recover their gift cards or not..
yan 18y ago
Maybe it's also the psychological thrill of winning an auction? Less-likely so, but possible.
ltbarcly 18y ago
Free shipping with the gift card, can't you read?
akirk 18y ago
Maybe people from outside of the US buy them in order to be able to shop at the Amazon MP3 store?
alaskamiller 18y ago
In high school I used to sell this kind of stuff on eBay. Some of the reasons people buy cards/certs online: 1. Foreigners. People in Europe want to buy products off US Amazon but don't want to deal with credit card or banking currency conversion fees or the address verification. 2. Lack of credit cards. Kids or something can use checking-backed PayPal but not credit cards. 3. Leveraging promotions. Microsoft cashback for buyers (10-30% discount on Buy It Now prices) was pretty popular and it completely fucked up eBay economy for awhile so thank god they stopped it. People also often get PayPal or eBay or credit card promotional coupons. 4. People are just stupid. This tends to apply to eBayers. 5. Fencing credit cards. Somewhat rare nowadays. People also buy physical Staples and OfficeMax because they're percentage-based. This is actually really shitty business for the seller since eBay/PayPal takes about 25% with their fees.
- alecco 18y ago
  With some account-a-magic it might be used as some sort of tax evasion, too.
  - arockwell 18y ago
    Its a way to get around VAT for euros isn't it?
- doug_m 18y ago
  I've friends who've done your point 1 for ITunes in the UK - register a US ITunes account with a relative's address but never set-up a credit card. Then you purchase ITunes gift vouchers for a dollar above value from ebay and apparently save 30% off the equivalent UK prices. The 30% being the figure in the heady days of nearly 2$/£1 - soon I guess we'll be selling the gift cards.
alyx 18y ago
Just guessing but maybe because it's a way of buying things on Amazon dot com without having a CC with a US address?
- pistoriusp 18y ago
  I've purchased a ton of books off Amazon without having an address in the USA. I know I cannot purchase electronics, but this is more of an import/ taxation issue... I don't see how a voucher would overcome this.
  - sjs382 18y ago
    And I've bought a DVD off of amazon.co.uk that wasn't available in R1 at the time.
- gaius 18y ago
  Amex is Amex, wherever you are. It's dealing with customs that puts people off.
icefox 18y ago
Maybe when you buy an Amazon gift card there is a fee. During Christmas I noticed that a bunch of cards for $X cost you $X+5 to actually purchase. Or maybe sipping is $2 from Amazon.com in which case you are still saving right now by getting free shipping.
gommm 18y ago
I don't know for amazon card, but I sold japanese itunes card to people who wanted to have access to japanese music on itunes. I guess that for foreigners who want to buy a kindle it could be interesting to get a us amazon gift card. (not that I understand why one would buy a kindle instead of the sony reader....)
Herring 18y ago
http://www.theatlantic.com/doc/print/200812/financial-bubbles http://www.theatlantic.com/doc/print/200812/financial-bubble...
DavidSJ 18y ago
I should clarify that a valid explanation would account for the fact that gift cards other than Amazon's consistently net below face value.
rkowalick 18y ago
Because a 75$ Amazon Gift Card is a better gift than 75$
zzzmarcus 18y ago
It's probably also a cheap/easy way to rack up good feedback for both the buyer and seller. I can think of easier ways, but I suppose this could work too.
mhb 18y ago
And why does Roku sell for more on eBay than you can buy one for online from Roku? http://shop.ebay.com/?_from=R40&_trksid=m38&_nkw=roku&_sacat=See-All-Categories http://shop.ebay.com/?_from=R40&_trksid=m38&_nkw=rok... vs. http://www.roku.com/default.aspx http://www.roku.com/default.aspx

15 points by DavidSJ 18y ago

It's due to a Microsoft cashback programme that rewards users for locating ebay items using Live search. https://cashbackaccount.search.live.com/cashback/welcome.aspx https://cashbackaccount.search.live.com/cashback/welcome.asp...

jcapote 18y ago
That explains why they are selling; Why would anyone buy them at more than face value?
- sachinag 18y ago
  No - the buyers got the 30% off. But the eBay/Cashback experiment was reported to have ended after the holiday. Anyway, I'm sure auction psychology and the Winners Curse still has a lot to do with this.
- lbrandy 18y ago
  Erm. My strong suspicion is the reason people are selling is because the price is higher than the face value.

tsally 18y ago

My first thought was money laundering, but maybe that's just crazy :-p. If you were to launder money through gift cards though, Amazon would be the right choice.

eatenbyagrue 18y ago
Probably not that crazy... maybe carders converting stolen cards to cash?
- alecco 18y ago
  Sounds right. The key problem for carders is the drop place and buying this way disconnects the card with physical address. Plus it could be used as a black market currency. Oh, and ideal for tax evasion at the micro level. The taxman is much better at tracking this type of scams than FBI, no CSI magic but plain old "follow the money." Now, if I were an US three-letter agency agent, I'd be the top seller of this cards and track the hell out of it. I mean, it even gives a profit, no budget issues. Tracking email, IP, and making contacts would be trivial. Could even be done without a court order to PayPal or anything. Selling gift cards isn't a crime, so it wouldn't be entrapment by itself, AFAIK and IANAL.
trickjarrett 18y ago
Was my first thought as well, though it would probably be a red flag in these days.

AndrewHampton 18y ago

My guess would be scammers trying to get a free gift card. Who wouldn't enthusiastically send a $75 gift card to someone willing to pay $80 for it?

sounddust 18y ago
I'm sure at least some of these are going to people who are buying them with stolen credit cards or other scams. But it seems that there would be less fraud with gift cards, since they could be remotely disabled and are traceable. That having been said, who knows if Amazon and others actually help victims of fraud recover their gift cards or not..

yan 18y ago

Maybe it's also the psychological thrill of winning an auction? Less-likely so, but possible.

ltbarcly 18y ago

Free shipping with the gift card, can't you read?

akirk 18y ago

Maybe people from outside of the US buy them in order to be able to shop at the Amazon MP3 store?

alaskamiller 18y ago

In high school I used to sell this kind of stuff on eBay. Some of the reasons people buy cards/certs online: 1. Foreigners. People in Europe want to buy products off US Amazon but don't want to deal with credit card or banking currency conversion fees or the address verification. 2. Lack of credit cards. Kids or something can use checking-backed PayPal but not credit cards. 3. Leveraging promotions. Microsoft cashback for buyers (10-30% discount on Buy It Now prices) was pretty popular and it completely fucked up eBay economy for awhile so thank god they stopped it. People also often get PayPal or eBay or credit card promotional coupons. 4. People are just stupid. This tends to apply to eBayers. 5. Fencing credit cards. Somewhat rare nowadays. People also buy physical Staples and OfficeMax because they're percentage-based. This is actually really shitty business for the seller since eBay/PayPal takes about 25% with their fees.

alecco 18y ago
With some account-a-magic it might be used as some sort of tax evasion, too.
- arockwell 18y ago
  Its a way to get around VAT for euros isn't it?
doug_m 18y ago
I've friends who've done your point 1 for ITunes in the UK - register a US ITunes account with a relative's address but never set-up a credit card. Then you purchase ITunes gift vouchers for a dollar above value from ebay and apparently save 30% off the equivalent UK prices. The 30% being the figure in the heady days of nearly 2$/£1 - soon I guess we'll be selling the gift cards.

alyx 18y ago

Just guessing but maybe because it's a way of buying things on Amazon dot com without having a CC with a US address?

pistoriusp 18y ago
I've purchased a ton of books off Amazon without having an address in the USA. I know I cannot purchase electronics, but this is more of an import/ taxation issue... I don't see how a voucher would overcome this.
- sjs382 18y ago
  And I've bought a DVD off of amazon.co.uk that wasn't available in R1 at the time.
gaius 18y ago
Amex is Amex, wherever you are. It's dealing with customs that puts people off.

icefox 18y ago

Maybe when you buy an Amazon gift card there is a fee. During Christmas I noticed that a bunch of cards for $X cost you $X+5 to actually purchase. Or maybe sipping is $2 from Amazon.com in which case you are still saving right now by getting free shipping.

gommm 18y ago

I don't know for amazon card, but I sold japanese itunes card to people who wanted to have access to japanese music on itunes. I guess that for foreigners who want to buy a kindle it could be interesting to get a us amazon gift card. (not that I understand why one would buy a kindle instead of the sony reader....)

Herring 18y ago

http://www.theatlantic.com/doc/print/200812/financial-bubbles http://www.theatlantic.com/doc/print/200812/financial-bubble...

DavidSJ 18y ago

I should clarify that a valid explanation would account for the fact that gift cards other than Amazon's consistently net below face value.

rkowalick 18y ago

Because a 75$ Amazon Gift Card is a better gift than 75$

zzzmarcus 18y ago

It's probably also a cheap/easy way to rack up good feedback for both the buyer and seller. I can think of easier ways, but I suppose this could work too.

mhb 18y ago

And why does Roku sell for more on eBay than you can buy one for online from Roku? http://shop.ebay.com/?_from=R40&_trksid=m38&_nkw=roku&_sacat=See-All-Categories http://shop.ebay.com/?_from=R40&_trksid=m38&_nkw=rok... vs. http://www.roku.com/default.aspx http://www.roku.com/default.aspx