Friday, March 30, 2012

Is a $2 discount worth it?

Let me lay out a situation for you. Once per quarter you go shopping at Costco and spend a few hundred dollars. Your friend has a gift card to Costco, and doesn't want it, so that he'll sell it to you for a slight discount. The gift card is for $100 and he wants $98 for it. You don't need to change your behavior at all, and when you use it you'll buy only the things you would have anyway. But the savings is only $2. Do you buy the gift card?

This is the situation I find myself in. Plastic Jungle is providing just such an opportunity: a $100 Costco gift card for $98.

I think it's totally worth it! This is almost indistinguishable from finding two dollars on the ground -- or more accurately, your significant other tells you about how she found two dollars on the ground and deposited them into your bank account so that you didn't actually see the dollars but you know they're there.

The cost is that I'll have to punch my credit card info into a website, open up a letter in a few days, and remember to take the gift card when I go to Costco some time in April. That's virtually zero cost. But right now both my girlfriend and my office mate are standing by the argument that, essentially, two dollars is not a big enough deal to make it worth while.

Every time I hear an argument that "X dollars is not that much" I recount MMM's post about how $10 is, in fact, a lot of money. I don't see why this same concept shouldn't be applied to smaller dollar amounts. If I can get $100 of goods for $98 dollars, and (crucially) if that doesn't cause me to increase my consumption, then I should go for it.

I can't justify leaving $2 on the table. It feels like the same argument as "a trip to work only costs like $4 in gas and maintenance, so why bike?". So I think I'm going to get the gift card.

What do you guys think?


  1. I am with you on this 100%! If you calculate it like a wage I find it really justifies the purchase. For example I always jump through all the hoops to cash in on rebates even if they are for a measly 5 bucks. The way I see it is if it takes me 10 minutes to get everything ready well that is like making $30.00 an hour! Not bad! Here if it takes you 2 minutes to save 2 dollars than that is like making $60.00 an hour! Really not bad! Heck if there is a one limit per household on those gift certificates ask your friend if you can use his address. Sounds like he doesn't need!

    1. I'm glad someone agrees with me. I'm surprised I neglected to calculate an effective wage for this kind of discount-hunting work, but you're right, it's a relatively lot of money for little effort.

      You got me thinking about effective wages, so I collected some gas mileage data on my last long road trip. I've got a forthcoming post on your imputed wage when you're speeding :)

  2. Indeed this is a great way to save money. A few examples of what I've done.
    I have an amex card with 6% at grocery stores.

    Amazon gifts
    BP Gas cards
    iTunes cards (These go on sale often)

    Today I did the following at
    Bought a $257.27 home depot gift card for $239.26 (7% off) with my 3% everywhere Chase Subaru card (we own two subarus and the rewards pay for parts/service).
    I'm going to purchase what I need at through where they have 3% cash back at Home Depot.

    I'm effectively getting the items I need for ~13% off. Not a bad deal.

    My holy grail though is finding the $500 Visa gift cards at a super market and getting 6% back on that. I know they cost 5.95 to purchase but it would equat to 4.88% cash back from Amex. My problem is that no super market I've been to either has the large $500 cards or they won't fill them past $200.

    1. Nice. I think I want to get in on this game a little more aggressively in the future. I'm putting it off, though, since I still have some work to do exercising my frugality.

      I didn't know about, I'll have to check that out. Thanks!

    2. I was SOOO excited tonight. I asked customer service at the local super market that sells the $500 Visa gift cards, apparently the cashier was incorrect the last time I visited. I just purchased a 500 gift card, with a 5.95 activation fee. With 6% cash back from Amex that's (505.95*.06)-5.95 = 24.40 cash back for a card I can use to pay my cell phone/utilities,gas,BJ's (where I only get 1%) and lots of other places. So excited! :-)

  3. I totally avoid these and all similar things including rebates, coupons, sales, etc. It's all just marketing to get you to play the game and buy more stuff sooner. Go Zen on them. Ignore it all. Use 1 card for everything and buy only what you need at the time you need it. Simplify. Take yourself out of their game.

    1. Probably the best advice I've heard all week. I think you're right: I need to be doing more to simplify my life.