The ever-thoughtful economists over at Freakonomics are stumped by eBay member lpinok, who bid $55.71 for a $50 Target gift card.
Skipping past the fact that gift cards are a terrible investment and that you could easily take your $50 straight to Target, why would anyone bid more than face value on gift card?!
Steven Levitt is baffled:
This seems to defy all logic. The item description is: “Just a $50 gift card to Target … .”
We need to find lpinok and sit him down with Ben Bernanke. Maybe, hopefully, hours of conversation will unearth the mangled thought process behind baffling phenomena like the subprime meltdown.
Until someone offers an explanation, we have no choice but to believe that lpinok represents everything that is wrong with personal finance in America.
How Much Would You Pay for a $50 Target Gift Card? [Freakonomics]
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@cloud-on-a-bike: Damn, you beat me to it. That free shipping is a fantastic deal! I mean, the buyer saved, what, maybe a buck? Woo!
A couple of years ago while browsing eBay, I found an auction for a Wal-Mart gift card. The guy selling it stated in the auction listing that he’d received the card as a gift but doesn’t shop there so wanted to get rid of it. Here’s the kicker: he said he had no idea how much money was on it.
So, even with *no value* listed on the auction, people were actually bidding on it. Probably the same people who buy lottery tickets.
@haoshufu: Apparently you are the only one here who is NOT a paranoid fool.
Congratulations.
Seriously, people not EVERYTHING is fraud/money laundering…
I should try selling gift cards, and see if I can turn a profit!
(I agree, it is not illegal, as long as one is being honest about the actual cash value of the card.)
The real question is “why don’t my Ebay auctions ever go this well?”
De-Evolution FTW!
All the tinfoil theories have merit..but what about the 4 other people who bid above $50?
@mgy:
No kidding…selling laptops on eBay is a huge PITA
@628:
eBay called this Windorphins
@Lambasted:
I always wondered what the appeal of selling an item for the starting bid of $1 was…as in, who would be dumb enough to get drawn in to that? You just answered why it’s so effective!
I love the people who price compare with eBay and say “What? You bought a Zune for $230 on Amazon? They’re going for $70 on eBay!”
Me: How long left?
“Uhh…4 days 23 hours”
@t325:
True..but he was talking about cases in which there are other identical items still offered as Buy It Now for less than the final value
@HOP:
Windorphins…
@Ciao_Bambina:
I was looking at them…wtf is an elite breastpump? How’s it different from any other glorified cow milker/penis pump?
@628:
Relax man! Nothing to get overly excited by me asking you a simple question. I was just curious if all or most people bidding more then the amount of a gift card actually do pay for the gift card in the end that they won.
Thanks for answering me though.
I just bought a $100 Sunoco gift card for $105. The reason? eBay sent me a 10% off coupon, I get 6% back through eBay and 1% back through FatWallet. The end result? Cheap diesel for me (not biodiesel but it will get me through).
@MrsLopsided: You might be on to something. I don’t know about shopping offshore, because if Target has rules about that, it probably means they won’t ship outside the U.S. so buyer would be stuck on that point. But possibly someone who wants to order off the website but can’t use a credit card for some reason. Maybe they have a free shipping code, or they are buying something that qualifies for free shipping, so they figure the $5 surcharge is worth it.
Actually that doesn’t seem so very unlikely. For example, right now Target has 15% off + free shipping on select furniture. Let’s say the guy wants to buy this leather club chair: [www.target.com] which now costs approx $280 with free shipping. This is a heavy, bulky item that would probably require a substantial delivery fee even if he bought it locally, assuming he has no other way of getting it home. So he buys a few Target gift cards, let’s say six $50 cards. Not all of them will end up costing more than face value. This incident was unusual enough to attract media attention. But if he has to pay a $5 surcharge on even half the cards he buys, the overall price for the chair, including delivery, will still be $295 – which may be quite a bargain for the item in question. Also, he may belong to eBates, for example, where he would get another 4% cash back (saving an additional $13).
In the end, lpinok might be the smartest consumer of all of us after all. I think it’s impossible to judge unless we know what his plans are for the card. I could definitely see doing that in certain situations where buying from an online merchant might save me tax and shipping/delivery fees, if I could not use a credit card for some reason.