Buying discounted gift cards from online gift card exchanges is a great way to get a discount on anything you buy. I am often asked about buying gift cards from Kroger grocery stores. How does the discount you earn on gas from Kroger fuel points earned by buying gift cards from grocery stores compare to just buying discounted gift cards?
The answer is it depends. It depends on how many points you earn per dollar spent, and how many gallons of gas you normally buy. I have found sometimes buying the discounted cards is the way to go, and other times you are better off earning the fuel points.
To help you calculate which gives you the better discount in the end, we need a calculator. So here it is
Kroger Fuel Points
Kroger is a company that operates grocery stores under many names including Baker’s Supermarkets, City Market, Dillons, Fry’s Food, Gerbes Super Markets, Harris Teeter, Jay C, King Soopers, Owen’s Market, Pay Less Super Markets, Ralph’s, Scott’s, Smith’s, Fred Meyer, Price Impact Stores, Food 4 Less, Foods Co, and Ruler Foods.
They have a fuel point program where you earn points that can be turned into gas discounts when you fill up on everything you buy there. Gift cards are special though, because they earn you extra points. Sometimes you earn 4X points on gift cards, but more often you earn 2X. Either way, those points add up extra quickly and can get you big fuel discounts.
After you earn 100 points you earn a 10% discount. 200 points means a 20% discount, and so on with a max $1,00/gallon discount for 1,000 points. The calculator I wrote assumes a constantly increasing discount, instead of the 10 separate tiers of $0.10/gallon, $0.20/gallon, etc. So while my calculator is more accurate over the long term if you earn points on a regular bases, it will be off if you don’t buy an amount of gift cards divisible by $100 and have no other points. Don’t worry about that too much though, it still gives you a good rough idea of what kind of discount you are getting.
There is one special circumstance that may change things up a little. What if you have a credit card that gives you a higher percentage cash back at grocery stores than you would have earned at an online gift card exchange?
I left this situation off of the calculator because I was worried it would cause more confusion than it was worth, but it is fairly easy to factor in to the final answer. If you have a card that earns extra cash back at grocery stores, simply take the extra cash back you would earn and add it to the effective discount calculated above.
For example, I earn 6% cash back at grocery stores, and 2% cash back everywhere else. So I would add 4% (6%-2%) to my final effective discount percentage.