How to Get an Instant 20% Return on Investment

It's the holidays and you know what that means?

Gift card purchase bonuses!

A gift card purchase bonus is when the store gives you a small gift card in return for you buying a bigger one. Like a $5 gift card for you when you purchase a $25 gift card for a friend.

There's no rule that says you can't buy them for yourself. You spend $25 for a gift card, you get $5 free. That's an immediate 20% risk-free return on investment… can't beat that with a stick.

Companies love gift cards because they get guaranteed money and they get it right now. You, as the proud gift card holder, will spend it sometime in the future. That time in between now and later, the store will turn that into even more money ($146 million more, in Starbucks' case).

There are a handful of stores, usually restaurants, that I know we visit often enough for this to be worth it. We go to Noodles and Company once every 4-6 weeks. The kids enjoy it, we enjoy it, and they serve wine and beer. πŸ™‚

I just got the following email from Noodles & Company:

Instant 20% return!

The only gotcha to watch for are the terms of the bonus. The bonus often has a short time limit and other terms. In the Noodles & Company case, you can only use it in January of next year. Not a big deal for $5 but if you bought a lot of them, you might be hard-pressed to use them in a single month.

Finally, you often need to be subscribed to the store's email list or membership to get an offer. Sometimes they advertise the bonus, sometimes they don't. They always email their lists though.

Are you going to take advantage of these offers? If so, which ones?

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools, everything I use) is Empower Personal Dashboard, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

>> Read more articles by Jim

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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8 years ago

There a some local restaurants that offer these deals during the holidays that we often take advantage of. Buy a $40 gift card and get a free $10.

My husband was on an IHOP kick for awhile. They had a $5 bonus (to be used next time) offer. So we’d buy the GC, use it to pay right then, and use the bonus next time, also buying a GC, etc. Worked out quite well. That said, I tend to avoid these offers — as awesome as they are — because of the limited time you can use them. We’re not organized, and iffy health makes things even more hazy. But there are a couple of places we go almost weekly for things like date night. So I’m definitely… Read more »

8 years ago

I’m completely on board with the gift card game. I’ve done a couple of the Papa John’s groupon deals where you buy a $25 GC and get 2 (!!) free large 1 topping pizzas. I applied a $5 coupon to the groupon purchase, got $2 cash back by shopping through ebates, so basically walked out the door with enough e-credit to buy 5+ large pizzas for $18 (and they throw the pepperoncini’s and garlic butter in for free). And I routinely buy GCs from online gift card resellers for places like Lowe’s and Home Depot when I have a medium… Read more »

8 years ago

I need to buy (3) $50 Home Depot Gift Cards to give as Christmas gifts. Can you tell me where I can buy these to save money? Thank you!

8 years ago
Reply to  Jim Wang

Thank you for your response! It could also be Lowe’s gift cards instead of Home Depot… if that helps! Thanks!

Norma Walker
8 years ago
Reply to  Jim Wang

If you have a Kroger’s they give 2x the fuel points on gift cards lately 4x I buy Lowe, Home Depot and places I go and eat I had over 1,000 points for gas.

Deborah L Holm
8 years ago
Reply to  Darla

We have used this company for YEARS.

They offer an additional 3% off of bulk orders. We have rentals so I always appreciate the extra money off. Plus we get 10% off for Veterans discount at Lowe’s.

8 years ago

We recently found out Sam’s Club sometimes has deals on gift cards. We like to go to O’Charley’s and they sell 2 $25 gift cards for $39.88. They do the same thing for the local movie theater and since we knew we’d be seeing a couple of movies soon, we bought that, too! Just have to make sure we use them πŸ™‚

8 years ago

Costco and Amazon frequently have great gift card deals. It’s also worth getting on your credit cards website and shopping through their portals, which can give you additional discounts or cash back.

8 years ago

Somebody working in the gift card business told me where the real money is: up to 10% of the cards are never used. They’re either forgotten in a drawer, or just lost, etc…

Easy money for the stores selling those, so they can easily afford a +$5 gift once in a while. As long as you actually use the card wisely, you’re indeed taking advantage of the situation πŸ™‚

8 years ago

Many credit card companies allow you to buy gift cards with rewards points. Many of the cards are offered at a 5% to 10% discount from what the normal number of points are for the cards. In the past, I’ve even seen American Express offer a 5% discount on American Express gift cards.

When I accumulate a lot of gift cards, if nothing is written on the cardboard holder, I look to re-gift them. And for Amazon gift cards, I load them into Amazon and use the balance to buy other gifts.

8 years ago

Hey Jim!
I saw on my AMEX account that you get a $10 statement credit if you spend $200 on AMEX gift cards. At first I thought it wasn’t worth it, but after reading this article it was rob ably is right as its a 5% return and I will still get the AMEX points for making the $200 transaction too?! You can use Amex gift cards as normal so should just buy one and use it as normal?

8 years ago

I get about $50 worth of gift cards each month using Swagbucks. I earn the $ mostly through streaming videos in the background while I’m going on with my day. I’m also a big fan of the website Raise which sells discounted cards. You can earn a bit extra by shopping on Raise through Swagbucks for the gift card and then going to the actual site through Swagbucks again. One thing I do is to treat gift cards exactly the same as cash accounts in YNAB. This helps me trick myself into not thinking having a gift card is an… Read more »

8 years ago
Reply to  Jim Wang

I only get Target and Amazon giftcards from Swagbucks and those are both electronic only. It’s great if you can get into the habit of just having videos streaming. What I ended up getting was two cheap $10 android phones from Amazon so I can just use that exclusively to swag.

8 years ago
Reply to  Jim Wang

I got two LG Exceeds from Amazon for about $10 each. I put them on wifi mode.

You then download all the Swagbucks apps (SBTV,, Sportly, and Indiemusic) and stream videos all day with those two phones. The main app i use is SBTV in which I favorite one 10 second video and it just replays it all day. The only thing w/ these apps is that they sometimes freeze so you just gotta monitor it once in awhile.

I score at least 150-250 a day this way. Sometimes more if I’m home all day.

8 years ago
Reply to  Jim Wang

I put these phones on wifi mode. It just works easier this way than using my regular phone or iPad.

8 years ago
Reply to  Jim Wang

haha. yeah i tried an old iPod touch and it didn’t work either. Damn Apple – always making you upgrade to the latest model by having the older models slow to a crawl on the latest software. If they can upgrade at all. My iPad 2 is slow as heck but I’m holding off until it dies completely.

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