I've been selling crap on eBay for more than a decade now, and something often perplexed me: gift card sales. Specifically, I've noticed that gift cards sometimes sell for more than their face value...but why? Just a few months ago, I sold a $10 Starbucks gift card for $11.50.
As the seller I was thrilled, yet terribly confused. Was this just a stupid bidder--someone who was surfing eBay for bargains and thought that the opportunity buy $10 worth of Starbucks coffee for $11.50 was a steal? If so, I wish I could meet this person and talk them into becoming their exclusive gift card supplier...sounds like an incredible career opportunity for me.
This was no isolated incident--I've seen hundreds of gift cards sell for more than face value. But I think I've solved the mystery. Here's the trick: eBay has a program called "eBay Bucks" that lets buyers accumulate points for purchases on the site, which they can later apply toward future purchases. There may be a few stupid bidders out there, but I'm guessing most of these people are spending eBay Bucks and are still actually paying less than face value for gift cards.
Two weeks ago, however, my sense of understanding of the eBay gift card sales market took a serious blow. I listed two iTunes gift cards on eBay two Saturdays back--one $50 gift card and one $25 gift card. With four hours to go in the bidding, the $25 gift card had been bid up to $26, and the $50 gift card was hovering around $40. I didn't check the final sales prices until after the auctions had ended and I'd received emails from eBay telling me that my items sold.
I don't think any bidder is that stupid, and I'd be shocked to learn that someone accumulated $1,500 in eBay Bucks and decided to make such an unwise purchase. Was my iTunes card made of real silver? It was pretty shiny, but nope, still made out of ordinary plastic. Could this be one of my fans and loyal Away From the Cubicle followers who somehow knew my eBay user ID and wanted a piece of memorabilia for their personal collection? Possible, but also unlikely.
As I continued to investigate, the plot thickened. I compared the names and addresses of the two bidders who won my gift cards, and both were foreign-sounding names, and both had addresses in Springfield Gardens, New York. It would seem my two bidders were in cahoots...but the $45 bid seemed legitimate. Was I somehow being scammed?
I've heard of plenty of crazy schemes on online auction sites. One of my favorites is a scam where a bidder pays with what appears to be an authentic Western Union money order, then informs the seller that they "accidentally" added an extra zero or two to the payment amount. For example, you sell an item for $5.00 and receive a money order for $500.00. The bidder asks you to send back the extra $495 by cash or check, and by the time the bank has informed the seller that the money order is a fake, he's already funded a Nigerian prince.
The rise of PayPal and its integration with eBay has pretty much wiped out such outdated scams, so I wasn't sure what was going on with my spectacularly overvalued gift card. Sure enough, the winner of the $50 gift card sent me the payment through PayPal, and we completed the transaction without a hitch. And, not surprisingly, the other bidder who placed a $1,542 bid for a $25 gift card has not yet sent a payment. Interestingly, when I looked through the bidding history on the gift card, there were not one, but two bidders going wild for my $25 worth of iTunes glory.
That second bidder placed a bid of $1,517.00 two days before the auction ended. To this day, I'm still puzzled. If I had to guess, I'd say someone (or someones, perhaps) just decided to spend a wild evening on eBay, bidding outrageous amounts for various auctions with no intention of ever paying. I'm not the only one puzzled, however. Just yesterday, I received a message from some random eBay user inquiring about my now two-week-old auction: "Just curious, why would anyone pay $1,500 for a $25 iTunes gift card???" A fine question, indeed.