Finance Challenge 2017 – Week #6

Week #6 is here! Hope you enjoyed your Valentine’s Day! This week I wanted to share a recent purchase I made and how I spent a lot less on it than I thought was possible. Instead of focusing on one app like my other posts, this involves a few apps used in combination (consider it fair, since I’m one day late in posting it this week). We begin looking for a new winter jacket.

I’ve been in the market for a new pea coat or drivers winter jacket for a couple months now, mainly because I have to look presentable at my 9-5 each day and unfortunately, my current winter jacket didn’t fit the bill. A good jacket was definitely going to set me back at least $150 and I was willing to accept that price. Now, I fully realize that this is not a lot to drop on a jacket, especially one that was supposed to be nice. My budget is tight, as I imagine yours is, too. I finally found a very nice charcoal gray Ralph Lauren wool jacket and it even passed the difficult girlfriend test as well. The cost? Only $119. I was already thinking this was a jackpot, coming a whole $31 under budget. But as I tried it on and looked in the mirror, I thought to myself, “I wonder how much I could really get off the $119 sticker?” So, from my earlier credit card post, I knew to check my Wallaby app and confirm which credit card would get the most rewards for this department store type purchase. So with 2% back, I brought the coat’s cost down to $116.62 once the cash back was redeemed. Off to a good start.

Next, I looked for coupons. I don’t have a single coupon site that I use, but frequently Retail Me Not, is a top google search. I’ve had mixed results with coupon success though. This purchase was no different; no useful coupons turned up. Plan B was to check the store’s website for a promotions link at the very bottom. This time it turns out that this store had a $10 off coupon if you joined their newsletter. While I can already hear you, “is $10 worth the spam?” I argue only you can answer that question. I don’t mind and typically don’t have any issue unsubscribing after the first couple newsletters that make it into my inbox. What do you do if you already belong to the newsletter of that store? A few options would be to use another email account (if you have one), create a new email account (you could possibly dedicate this account to this types of offers), or a significant other may not (truth be told that is what I ended up doing). Now the cost of the jacket was done to $106.82 ($119-$10, then times (1-.02) for the cash back). This was great! I achieved a 10% discount on the jacket with pretty minimal effort, but I wanted to keep digging lower!

I revisited the 2% cash back I would get from the jacket and realized that the $10 off made it less than 2% off the retail price of $119 and became a little discouraged. I mean, it was a measly $2.00. What if I could get more than a 2% discount of sorts? I thought about changing how I paid, what if I bought a gift card first, and then used that to buy the jacket? Well that actually doesn’t work, because the gift card would be for the after coupon amount. What if I bought someone else’s giftcard though? Most people don’t realize this but there is a secondary market for gift cards. I think this is fascinating. If you were the unfortunate recipient of a (potentially less-than-thoughtful) gift card that you have no use for, you’re basically screwed out of that money; however, you can no list the giftcard for sale of several websites to recoup at least a portion of the face value of the giftcard. There are several services out there, but the one I find myself most frequently using is Raise. I like the user interface, the decent selection of giftcards, fast shipping, and the 1 year balance guarantee on each purchase. Another big plus is that Raise will typically have promotions of their own, like $10 off of $100 in gift cards. I just so happened to be shopping for a jacket that was on the last day of a $10 off of $100 promotion that Raise was doing. I had a minor hang-up (more on that later) but I was able to find digital gift cards for the store I was at. This meant that I could use them immediately after my order was processed. Oh yeah, and the discount off the face value of the five gift cards I purchased was 6.68%. In order to get over the $100 mark to use the $10 off of $100 Raise discount, I had to purchase more gift cards than I would have liked though. I bought five gift cards for a face value of $161.20 (which is well over the $119 mark) but I only paid $140.14, which means I locked in a 13% discount with this retailer, forever. Now the compounding starts to begin. I earned 2% cash back on the purchase of those giftcards. The final cost of the jacket at this point (applying all cash back towards the cost of the jacket) would be $106.19 (a whole $0.62 lower than above, wow), but I’d have $52.20 in gift cards left over. Again, I can’t stress that carrying this extra $52.20 in gift cards puts a heavy drag on cost savings and I realize the irony in “save money by spending more!” But I do plan on returning to make a purchase at this store, eventually.  Before I hit the checkout button the gift cards, I got another idea; use a cash-back portal online.

What helped prevent me from getting discouraged about going backwards in my cost savings was the fact I could use a shopping portal to further the cash-back on the purchase of both the giftcards and the jacket! What’s a cash back portal? It’s a website that you use to shop for things online. As long as you make the purchase while going to the portal first and having the portal redirect your browser to the retailers website, you earn an additional amount of cashback or rewards on your purchase (in addition to your credit card!). Just like the secondary market websites for discounted giftcards, there are several different shopping portals. I usually use Ebates more often than others though. Just like Raise, they may not be the best with cash back all the time, but I like the user experience and their customer service has been positive each time I’ve need to use them. Like Raise, they aren’t without their faults either, but I’ll summaries that in a later section. Ebates offered 1% cashback on my Raise purchase of $140.14 for an extra $1.40 in cashback to apply towards the remaining $106.19, for a new total of $104.79. Since I had already found my jacket on the retailers website, I checked what Ebates offered for this retailer. It ended up being an extra 3% of cashback! With this knowledge I left the store and went home to order the jacket online. To be clear, I was able to double down on Ebates, with 1% back on giftcards from Raise and now 3% on the jacket from the store’s website.

In the end, I’m proud of my haul.

  • $119 jacket
  • $52.20 in giftcards
  • $7.48 from cashback
  • Final out of pocket cost was $140.14

This means the jacket cost me $101.52 after using the $10 coupon and all $7.47 of cashback towards the cost. That’s about 15% the jacket alone.

You’re probably thinking, “damn, that’s a lot of work for $17.48 off” and you would definitely be right, but now that I have the framework for a process to squeeze nearly all of my purchases for even more savings. I know it’s not like 50% off, but it’s definitely a good result, given I had to make something out of nothing. There’s also nothing stopping me from using this framework with a bigger discount coupon or using this on larger purchases (e.g. if this scenario was for $1,500 vs $150). I’m also proud that I stayed under my initial budget of $150. I could make this appear to be a better deal if I count the mark down on the jacket from full retail, but let’s be real a) God only knows what the full retail for Ralph Lauren is, and b) who would pay full retail? Oh, and I qualified for free shipping online since the order total was over $100.

There is definitely room for improvement:

  • Higher rewards (than 2%) from the credit card used to purchase the giftcards
  • Raise potentially could have had a higher discount on the giftcards
  • Ebates potentially could have had a higher cash back rate
  • Potentially higher discount coupons from the retailer
  • The competitors to Ebates and Raise could potentially have higher rewards/discounts

There is also a few pitfalls to this framework though

  • Increased time and effort
  • Potential for giftcards to be out of stock
  • Potential to have to purchase a giftcard that costs more than the original purchase and to have to either hold that value or resell the excess at a loss
  • Potential for giftcards to only be available via physical mail, delaying the purchase
  • Going online could mean additional costs like taxes and shipping
  • Increased complexity and thus a chance for something to go wrong

As far as my review of Raise and Ebates, while I use both nearly exclusively I have had minor issues in the past. Raise, emails me discount codes (e.g. $10 off $100) and while this is good, I’ve had maybe one work on the first time of me entering it at checkout. The codes seem to expire on Raise’s system days before the expiration date listed in the email I receive. Luckily, Raise features a live chat feature and their support staff is able to correct the situation immediately. Ebates will also offer sales,coupons, increased rewards via email regularly. The issue I have with Ebates is that I need to babysit my transactions. Sometimes the retailer doesn’t report the transaction to Ebates and this requires manually entering the information along with providing a copy of the emailed receipt. Ebates support staff has been very helpful in sorting these situations out though and I have never missed an opportunity to earn cash back. As a side note, the fastest way to get paid cash back from Ebates requires a paypal account.

As always, individual experiences may vary, but hopefully you can start thinking about squeezing more savings out of your own purchases!





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