Here is a common question, appearing in many formats. One version runs as follows: I see Amazon gift cards on eBay right now that are selling for more than the value of the card. Why is this? l don’t get it. If I go to the Amazon web site, I pay the card’s face value to buy 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 will pay a premium on eBay, and buy the same card for over its value?

This has me stumped. I know of people donating their gift cards for disadvantaged kids, and I know of people buying their gift cards on the cheap from the second-hand market. (The websites Plastic Jungle, ABC Gift Cards and CardCash, among others, spring to mind.) But for people to pay out more than the value of the gift card? Hey, we can really make it big! We can sell our $20 gift cards for $25, then buy a $25 one and sell for $30 and before you know it, we will be looking into some nice beachfront property. Something tells me this ain’t for real…

My Theory:

Let me suggest my theory. It’s not fancy nor does it dabble in conspiracies, but it’s all I came up with; Perhaps these bidders are using automatic software that ups the bid. It could be that they are in cahoots with the seller, or that they ARE the seller, and their object is to maximize the bidding. However since the automated software cannot differentiate between some object of indeterminate value and a gift card with an obviously limited value, this ridiculous scenario ensues.

What Happens When these Guys Win?

The question in my mind is what happens when they win the auction, and win it they certainly will, – because no one in their right mind will outbid them – do they need to pay what they bid? Is this perhaps a business model; Buy gift cards in low demand and resell it on eBay for the full face value or more?


Rolling up my sleeves, I tried to get to the bottom of this. I found that it’s common that gift cards sell for over their value. And that the reasons are both legitimate and non legitimate. A good reason can be someone too lazy to go out to a store. They will overpay to save on the gas costs and the bother. Other people want to get the money out of an account that does not allow them easy access. A PayPal account that has no bank account attached is a good example of someone who might use gift cards as a way of extracting their money from their account.

Less legit is that drug runners and terrorist groups looking for ways to transfer money incognito will use gift cards – ten thousand dollars’ worth at a time – as a harmless-seeming venue to do so. They will buy up these cards as a monetary vehicle. At the border the officials might 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 need be, to be able to get the transfer.

What is especially unsettling is the scammer schemes. Some people will bid $120 on a $100 gift card because they never intend to pay. They will put in a valid credit card, and claim either to never have received the card or that is had been used up already. eBay will typically refund the buyer. Now the buyer has the goods, and there is little you can do to prove that the card you shipped was unused.

What To Do:

What can you do about this? In essence, the eBay experience is predicated 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 if the person would care about that. Look at the amount of feedback the buyer has and if it is all positive. If they have done business a while on eBay they are less likely to jeopardize their ratings for a few bucks. In addition, their good track record also supports the trust you can have in them. Someone new overbidding, however, is suspect. Also, try getting eBay insurance to cover a chargeback, and implement as many security mechanisms as they afford you.