$ Gift Cards to avoid 2% fee
 

Is it possible and/or profitable to buy $ denominated gift cards from international chains and then spend them in Europe in order to avoid the 2% AMEX currency exchange fee?

For example, buy Hard Rock Cafe gift cards in America and use them at European HRCs. The expected payoff would be the 2% savings plus maybe extra points or miles depending on how you bought them. Among other ways, you could buy the HRC cards through GiftCertificate.com at the NWA WorldPerks mall earning 3 miles per $ or directly at HRC in America earning 5 Hilton points instead of 3 using your Hilton AMEX.

Are their hidden fees that would negate the benefit like the restaurants charging a terrible exchange rate for example? Are their other chains where this might work? Wal Mart and McDonalds come to mind as possibilities, does anyone else know of or can think of other possibilities?

That's a good thought, and it may work on a case-by-case basis, but in general my experience is that most gift cards issued in the US are valid only at "US participating locations". Haven't tried it with HRC or McDonalds though.
josh

I'm interested to know how much you expect to spend at Hard Rock, Walmart and McDonalds overseas that might make this worthwhile. Even if you spent $1,000 that's a big $20 savings.

As a American citizen who has lived off and on in Europe for 6 years I've spent several times more than $1000. I buy all my beer at Wal Mart for example. In addition to 2% I hope to earn FF miles and/or hotel points.

Anyway I don't even know for sure if Wal Mart or McDonalds sell gift cards. I know Hard Rock does.

I've thought of a few more possibilities: Starwood hotels, rental cars and Ikea. Can anybody confirm or deny these as selling $ gift cards that are accepted in Europe?

Anybody else know of any other possible opportunities?

You'd get the FF miles by using your regular credit card anyway.

Since AmEx giftcards are issued by AmEx anyway, I'd expect that they'd still come with a 2% fee - if they can be used abroad.

Visa/MC has recently eliminated their forex fees, but the issuing banks charge for it, so I'd expect their giftcards would, as well.

Visa/MC has NOT recently eliminated their fees! They are expanding them AND encouraging the banks to expand them!

As I understand it, Visa/MC has introduced a foreign transaction charge of 0.8% for ANY charge out of your home country even if it is in your base currency. And an additional 0.2% if there is currency change. And most (or all) of the banks appear to be shifting to an additional 2% on top of the Visa/MC .8% or .8%+.2%=1%.

I really want to find a card that works in this environment, but can't find one that isn't in some kind of pricing transition right now.

I think I'm not explaining myself very well. I went to the NWA World Perks mall site and used my Hilton AMEX to buy Hard Rock Cafe gift cards denominated in $s. For that I expect to get 3 World Perk miles per $ from NWA and 3 HHonors points per $ from AMEX. I then intend to go to Hard Rocks in Europe and spend the money on the cards hoping that when they translate the bill from Euro's to dollars I get the going exchange rate with no added fees. The payoff will then be saving the 2% AMEX would have charged me if I had just presented the AMEX at the restaurant plus 3 World Perk miles per $ that I wouldn't otherwise get.

What I don't know for sure is will the Hard Rocks in Europe accept these cards? If they do will they give me a favorable exchange rate? If this works out at HRC where else could it possibly work out?

McDonalds sells gift certificates in $5 books with $1 certs.
You can also get 3% in your UPromise account by entering the numbers printed on the back of the books. It was 6% if you had an AOL account as well, but that was just cut off. I was buying tham in bulk when AMEX was doing double mile promos. At that time for each $100 it was 200 Miles or MR points and $6 in Upromise. Now it is $3 per $100.

I don't know about other places in Europe, but Starbucks has a card for those $5 cups of cocoa in Zurich!!

JudyJFLA

Oh. I guess I misunderstood what was going on. I thought that Visa/MC eliminated a 1% fee and the banks took that opportunity to throw on a new 3% fee.

Either way, AmEx went from being one of the worst forex deals to one of the best. :rolleyes:

WalMart's card says it's valid in the US and Puerto Rico.