After you sign up, they’ll even kick in $5.00 toward your first payout.  Got friends?  If they sign up through you, then whatever rebates they earn will trigger a 20% commission to you.  Forever.  (It doesn’t reduce their rebate at all.  This is a thank-you bonus from Mr. Rebates to you.)

For the Valentine’s Day season, over 200 stores — like 1800Flowers.com, Ghirardelli Chocolates, ICE.com, ProFlowers, and many more — have increased rebates.

Finally, to celebrate Mr. Rebates’ 10-year anniversary, they’ll be giving away $10,000 to one lucky winner who visits Mr. Rebates while they’re logged in.  One entry for one visit per day through the end of February, 2012, so there’s the opportunity for another 22 entries into this sweepstakes if you sign up today!

But that’s not all!  Head over to Mr. Rebates, sign up, and score an additional 35% off cash back when you click through to Restaurant.com over there!  That makes 65 cents for a $25 voucher for qualifying purchases at thousands and thousands of restaurants nationwide.

(Too much work?  There’s nothing against heading straight over to Restaurant.com to get one for a buck.  No-sir-ee!)

Just double-check the terms and conditions which will be clearly visible next to your chosen restaurant.

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We were confused when the card came back declined.  At first we checked the balance on the card because we thought that they had given us less than they had promised (it was for a rebate).  That wasn’t the problem: we knew how much was on the card, and we didn’t overcharge that amount.  We finally talked to the manager of the restaurant, and he suggested in the future that we first try to charge half of the gift card’s value to see if that takes, and then try the other half.  “Sometimes it works the first time; other times it doesn’t,” is what he told me.

In any case, the meal finally got paid for, and we didn’t even have to stay to wash dishes.

Here‘s what I think might have happened

I did a search for hold on gift cards and ran across this FAQ from Visa:

“When using your Visa Gift card to initiate a transaction at a merchant where a tip may be included, be sure your balance is sufficient to cover an additional 20% above your total bill. If the bill, plus estimated tip, exceeds the available balance on the card, the purchase will be declined …”

Since our bill was larger than the amount on our card, there was no 20% wiggle room.  Somehow they did manage to debit the gift card even though the total bill was larger than the balance on the card.

It makes sense that there should be a buffer for the tip for two reasons: (a) the tip isn’t forgotten as it can be with gift card, gift certificates, etc., and (b) the server can treat the gift card basically like a credit card when it comes to writing in the amount of the tip: there’s room for most tips right on the card.

The main lesson we learned is that there are easier places to spend a Visa gift card than in a restaurant; the declination because of the tipping cushion was a distraction.  Had we just bought groceries with it, there probably would have been no issue.

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It’s clever.  I can’t say that it’s fraudulent.  It’s not as if he bought a stamp and is stamping the cards himself or anything like that.  They hand him the cards with the extra stamp, and they let him cash in his free lunch by turning in multiple incomplete cards.  He’s playing by their rules.  They just haven’t caught on yet.

They just haven’t caught on … yet

That’s the rub.  They will catch on eventually.  Someone at the shop will see what’s happening, and close the little loophole.  They may start demanding that the card be completely full: no multiple cards.  They may just get rid of the free stamp, so there’s no advantage to collecting more than one at a time.  Or something else.

He, and everyone else, won’t be able to do that anymore.

But you know what?  That’s all right!  Kudos to you if you find a loophole and enjoy a little reward for it.  This is the free market in action, and it’s the best way in the world to wring out inefficiencies, because ultimately society as a whole benefits when that happens.  Businesses should be free to offer incentives to attract more business, and consumers should be free to do their darndest to extract as much service from businesses as they can (without being illegal, immoral, or unethical).

Inefficiencies are wrung out all the time

Here are just a few that come to mind:

• Bounties for switching long distance companies.  This was in the early- to mid-1990s if I recall correctly.  There was fierce competition from long distance companies to steal customers from competitors.  The people who played this game would switch early, and switch often.  Company A would pay someone $50 to defect from Company B.  As soon as the check cleared the bank, they’d be on the phone with Company C, ready to sign up if the price was right.  Invariably the price was right, and as soon as that check cleared the bank, they’d call up Company A again!  Eventually the phone companies caught on, and they started attaching strings:  the bounty would come as a credit on their next six phone bills.
• Free dial-up Internet.  Others played the game with AOL and other ISPs far better than I did.  They’d call up to cancel after paying for a while.  The representative would offer a free month.  Awesome.  Thirty days later, they’d call up to cancel again, and get someone different on the line, who would — you guessed it! — offer them a free month just for staying on.  Eventually, they saw this happening, and kept track, I guess.
• Free airline five-star treatment, courtesy of the Mint.  Buy a whole boatload of dollar coins from the Mint, using your credit card, and get them delivered to your door, for free.  Make sure to use a card that gives you airline miles.  When the money arrives, deposit it in the bank, use it to pay off the credit card bill in full, and keep the airline miles (or cash back, or whatever).  Well, not only did the Mint not appreciate this (since the whole goal of this program was to get the coins in circulation), but some credit card companies started treating these kinds of transactions as cash advances, so interest started accruing immediately.
• Withdrawing large amounts of coinage, searching them for gems, and redepositing them in the same bank.  This is more for a coin treasure hunter (of which I know a few).  Withdraw $500 worth of half dollars.  Go through all of them searching for ones that are worth more than face value.  After picking through all of them, return the $499.50 worth that are worth exactly 50 cents apiece back to the same bank.  If you were a teller at that bank, how quickly would you get sick of that?  One of my treasure-hunting friends was ticked off when they started charging to withdraw coins like that!

In any case, here’s my story and I’m sticking to it.  Loopholes are made to be found and exploited.  Just realize that they’re not forever, and that you may the cause of your favorite loophole’s demise.

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There are three basic mechanisms for companies to get more revenue:  (a) increase the number of paying customers, (b) increase how much those customers buy on each trip, and (c) increase how often those customers buy.  Getting a brand new customer is relatively expensive compared with selling to an existing customer because, presumably, they already like doing business with you.

Have the motives of coupons always been this overt?

Lately, it seems that stores are practically bludgeoning their intentions with the coupons they offer to existing customers.  After buying something at Borders, I’d get a coupon good for 20% off purchases of $25 or more, good only for some specific window of dates in the future, so (a) I couldn’t just ring up another purchase while I was right there, and (b) the deal would go away if I waited too long.  Basically, “Come back soon, or you’ll pay more.  But not right now, or you’ll abuse it.”  Or with other retailers’ reward programs, after a certain number of purchases there will be a relatively insignificant rewards amount accumulated, and those rewards will go away pretty quickly — sometimes as quickly as a month.  Seems pretty overt to me that they don’t want me to accumulate enough to buy anything outright.  I mean, what can I buy with $0.34 in eBay Bucks?

How to use these types of short-fuse rewards smartly

The rewards are better than nothing, I suppose, but reacting like Pavlov’s dogs when coupons hit the e-mail inbox is exactly what the companies want you to do.  Here are a couple of ways to use these kinds of coupons to your advantage:

• Do you really, really need anything from that store before the coupon expires? Just like with any other discount, it’s not a deal if you don’t need the item.  Just because a store offers you a bait doesn’t mean that you have to bite.  If the reward is small compared with the purchase you’d have to make, then the decision is easier.
• Combine the coupon with clicking through a rebate portal. Usually the “kickback” from a rebate portal like Mr. Rebates or Coupon Cactus is separate from coupon codes”stack” those savings.
• Buy items that give you the least out-of-pocket expenses. I had a fair amount some Best Buy Rewards at my disposal (I think it was $25).  This is a decent amount.  I think the total of my purchase was under $27, so it cost me less than two bucks out of pocket.  Likewise, if you have a $50 item and a $100 you want, and have a coupon good for $10 off a purchase of $50 or more, go for the $50 purchase and wait for another coupon to get the $100 one.
• Use the coupon online if you can if the store is a bit away from where you live. Driving 20 miles and spending two hours to use a $10 coupon almost negates having the coupon in the first place.  Buying online might result in you saving more money, even after shipping charges.  It certainly saves time.

Any other tricks?  Or do you just pass these coupons by and avoid any temptation?

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But I was THWARTED!!  (Temporarily anyway.)  I got hit with this message:

There is a limit of 5 orders per prize each calendar month. We are sorry for the inconvenience.

Bummer, dude.  I finally found this information in the FAQ (there are a LOT of questions there) but without explanation. Oh well. But it’s the beginning of a new month, so I’m good to go again.

I still think the Amazon $5 cards are the best deal around, but there are of course tons of other decent deals on SwagBucks.com.  Some really easy Swag Bucks are for the following:

• Install the SwagBucks toolbar and use it. I get 1 Swag Buck per day just for having it there.
• Answer the daily poll. It’s one question, and it’s worth 1 Swag Buck to do it.  Just go to Ways to Earn -> Daily Polls.
• Visit the Trusted Surveys webpage. Just visiting the page once a day earns you a Swag Buck.  You can earn a lot more doing the surveys, of course, but for the time invested in clicking on one silly little link, it’s a good payoff.  Just go to Ways to Earn -> Trusted Surveys.

It’s fun doing things you would do anyway (searching the web) and occasionally earning a little something extra.  That’s SwagBucks.com.

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Maybe it’s just my opinion, but haven’t rewards programs gotten a lot more restrictive recently?  Credit card rewards and store rewards alike seem, well, more effort to redeem than before.  Some cases in point:

• Going from dollars to points. A 2% rebate on qualifying purchases is $2 for each $100 in purchases.  That’s easy to grasp.  But what about two points per dollar spent?  What does that mean?  It could mean the same thing if you get a $100 check for each 10,000 points you accumulate.  And if you get 10 points per dollar, that’s better, right?  Well, not if it takes 60,000 points to get that same $100 check.  The value of points are a lot easier to manipulate, and they’re a lot easier to devalue discreetly than a raw percentage.
• Going from automatic rebates to rebates by request. My credit card used to give my cash back rewards as a credit on my next bill.  No waiting, no muss, no fuss.  Now, I have to put in a request to have my rebate sent to me.  More work for me, and more time that they keep my earned rebates.  My last rebate check was $200 — that’s a lot – because I dropped the ball and forgot to request the check when the point balance was lower.
• Rewards that expire very quickly. A couple of rewards programs I’m in now have points that are only good for one month.  I earn gift certificates, and I need to spend them within a month, or else they vanish off the face of the earth, never to return.  I mean, rewards are rewards, but you’d think after dropping $1,000 and up at a store you’d get more time to use the earned rewards.
• Higher rewards if you accept vouchers for purchases at the same merchant. One credit card application outlined their reward structure, and rewards redeemed in store credits were higher than for cash.
• Rewards that are just a pain in the butt to redeem. At one merchant in particular, I have to catch the cashier with my rewards number before she rings up the purchase in order to get credit.  I’ve missed a few purchases because I remembered just a little too late. That, and I’ve needed to call their customer service because the website registration does not work.  The website designer screwed up the form, and it rejects valid input.  A pain!

When it comes to reward programs there is one axiom:  Retailers are quite happy if you never redeem your rewards. They will put obstacles in your way and hope that you forget about them until it’s too late.  So load up your favorite to-do list with reminders to get the rewards you’ve earned.

(Thanks to Funny About Money for including this post in the Carnival of Personal Finance!)

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I received my third $25 Visa gift card from Scour today, and on checking out the site I found this link on the front page:

“Upgraded Rewards System Coming Soon!”

Uh-oh.

The social search engine site has had a point-based system for earning free gift cards for searching the web:  search, vote, and comment, and you work your way toward $25 Visa gift cards.

That’s all going to change as of September 1st, 2009.  Searches, votes, and comments will no longer accumulate from day to day.  After this month they will only be good for entries in a daily $25 giveaway.

All point accumulation will stop on September 1st, and if there are unused points in your account, they will be “upgraded” to extra daily entries in the daily $25 giveaways for the month of September.  Then they vanish into the Scour bit bucket.  Here is how your current points will be converted to September daily entries:

• 1 – 1,500 points: 25 daily search entries for 30 days
• 1,501 – 3,000 points: 50 daily search entries for 30 days
• 3,001 – 4,500 points: 75 daily search entries for 30 days
• 4,501 – 6,000 points: 100 daily search entries for 30 days
• 6,001 – 7,500 points: 125 daily search entries for 30 days
• 7,500 + points: 150 daily search entries for 30 days

This is very unfortunate. Scour was a decent ride while it lasted but now it’s aspiring to be a watered-down version of iWon.  Giving away $25 per day is nothing.  This “upgrade” is an upgrade only for Scour.  It is an obvious, and harsh, downgrade for everyone else.

Here’s how I’d make the best of it:

• If you’re around the 4,000-point mark, I’m really sorry. Getting 2,500 points in four weeks is a lot, and they might just think you’re cheating by getting so many points so fast.  But it’s always worth a shot, I suppose.  Just be careful in how you search and comment.
• If you’re around 6,000 points, you have time to reach the magic 6,500 points. Pace yourself (maybe 50 points/day) and get past 6,500 to cash out your $25 gift card.
• If you have over 6,500 points, you had better cash out your points, or I’ll hire somebody to pluck the petals off of all your flowers.  Trading a sure $25 for chances at $25 is dumb.  Cash them out right now!
• If you want to just get into the drawings for the September gift cards, join before the end of the month and earn 1 point. You’ll get 25 entries each day in September with no more work on your part.

After this turn of events, Swagbucks is looking much better.  It’s the same idea but you can still earn your way toward gift cards rather than forfeit your effort each day if you don’t win.

(Oh, by the way, the Swagbucks link is a referral link.  The Scour links are not.  They’ll go away sometime in September when I get around to it.)

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Now, they’re not just being nice guys in giving you free money, of course.  They get paid more for closing the sale than they pay out to you as a rebate.  But regardless how they can get the money to you, it’s yours for the taking if you want it!

Here are a few sites for your rebating pleasure.

EBates – This is the first rebate site I heard about.  I heard about it in 2002.  A friend pointed me toward it when I was making some big purchases.  I got my first Big Fat Check™ and wrote about it on the site even before it was a blog. That was a long time ago.   But anyway, the site is still going strong, with hundreds and hundreds of stores and a great sign-up bonus.  You get $5 for signing up.  They pay out Big Fat Checks  quarterly, and as long as you’ve earned $5.01 or more in rebates by their cut-off, you score a check.  To accumulate rebates, just log in and click through to the merchants from their site instead of going there directly.  That’s it!

UPromise – I’ve talked about before: you can set up a few things once, forget about them, and still get rebates that go into your UPromise account for the benefit of someone’s college expenses.  Beyond that, you can also click through to merchants and get rebates in your account that way.  This site combines online rebate offerings with other offline rebates, so it’s a great weaponto have in your rebate arsenal.

FatWallet – Rebates, coupons, deals, steals, and over 1 million users. Plus, they have a cool little Firefox plugin that goes right into your title bar and will let you know if the merchant you’re visiting participates in FatWallet‘s rebate program. If the swirl is red, it reminds you to go back to FatWallet to click through there for the rebate. Pretty slick!

MyPoints – I use MyPoints quite a bit.  You can read a few e-mails and earn free gift cards without spending a dime, or you can shop and earn them faster.  Calculating the equivalent percentage rebate is a little bit of a trick, but a merchant that pays 3 points per dollar is the equivalent of a 2% rebate, and 10 points per dollar is about a 7% rebate.  ($10 gift cards go for about 1450 points.)  Join MyPoints and check it out!

InboxDollars – This site has an e-mail component similar to MyPoints as well as opportunities to earn money for surveys and other offers.  It does have a shopping component as well.  There’s a $5 bonus to start at InboxDollars, and you earn 10% of what people you refer earn.  I have yet to try any of the surveys but the cash bounties on a few of the offers seem pretty sweet.

Mr. Rebates – It’s a shame I hadn’t caught this one earlier!  They’ve been around for a while.  Much like EBates, Mr. Rebates has rebates tied to hundreds of online merchants.  There’s a $5 bonus to start, payout is a low $10, and you can earn 20% of what anyone you refer earns.  It’s stood the test of at least a few years so I signed up and I’ll give it a shot!

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There is a difference in the number of points it takes to earn gift cards from different merchants, though. Right now a $25 gift card from the participating merchants cost between 3,250 and 3,800 points. I’ve categorized these merchants below as having anywhere from cheap gift cards on MyPoints to expensive ones:

• Cheap cards: Bath and Body Works, Black Angus Steakhouse, Bloomingdale’s, Callaway Golf, Foot Locker, Gap, Harry and David, Lids.com, L.L. Bean, Macy’s, Magazines.com, Metromedia Restaurants, Newport News, Omaha Steaks, Spiegel, Timberland
• Somewhat cheap cards: Bass Pro Shops, Bon-Ton, Brunswick Zone, Chili’s, On the Border, Maggiano’s, Motherhood Maternity, Old Navy, Olive Garden, Overstock.com, Panera Bread, PBTeen, Pier 1 Imports®, Pottery Barn, Pottery Barn Kids, Red Lobster, REI.com, Romano’s Macaroni Grill, Sally Beauty Supply, Staples, The Ritz-Carlton
• Moderately-priced cards: Applebee’s, Baja Fresh, California Pizza Kitchen, Cracker Barrel, Kohl’s, Lord & Taylor, Papa John’s
• Somewhat expensive cards: CVS Pharmacy, JC Penney, Lane Bryant, Outback Steakhouse®, Sears, SUBWAY®, Walgreens
• Expensive cards: BP, GameStop, GiftCertificates.ca, Home Depot, Hyatt, iTunes®, K-Mart, Lowe’s®, Shell, Steve & Barry’s, Target, Wal-Mart

Here’s my take on why the cheap ones are cheap and the expensive ones are expensive. The cheap cards are for merchants that either don’t have a lot of locations or ones that sell products with a very high markup. So it’s more of a “sell” to encourage people to get these gift cards. The expensive ones are for easily-found retailers that sell products at relatively low margin. Wal-Mart, Target, and Home Depot are good examples. These gift cards are likely more popular and thus MyPoints charges more for them to keep up with the demand.

Anyway, this is a pretty complete list of retailers that have free gift cards available on MyPoints. Again, the points are pretty easy to get, and they send the gift cards fast in my experience, so why not join MyPoints and get started?

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