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Why I Spent £1052.84 on LEGO Friends – Confessions of a HfP reader (Part Two)

Here is part two of HFP reader John’s experience with manufactured spending.  You should read Part 1 of the article here before continuing below.  HFP has edited the article and any errors are probably ours.

If you want to try to copy John, remember that LEGO is running another fantastic promotion until Monday night – you can earn 1,500 Clubcard points (3,600 Avios) with a £75 LEGO City purchase.

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What about the coffee machines?

“I was actually hoping to offset a slight loss on my LEGO sets with the profits I’d make from the coffee machines!

But it turned out to not be as easy.

Nespresso decided to do a sale and suddenly the machines were selling for only slightly more than I’d purchased them for.  This meant I’d actually end up losing money after deducting sales, shipping and handling fees.

Not good!

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Deciding that I just wanted to get rid of the stock, I revisited my calculations and tried to estimate the maximum price I was prepared to pay for my points.

Having recently signed up to The Sunday Times Travel Magazine and in-effect paid 0.66p / Avios, I decided that this was my upper limit and reduced my prices to 90% of the RRP.

Suddenly, the floodgates opened and order after order started coming in. To speed up the packaging process I purchased some packing bags on Amazon for next to nothing and got Hermes to pick up the boxes from my work place.

I did look at getting a thermal label printer which would have made getting boxes ready for shipping an absolute doddle, but they aren’t particularly cheap and after reviewing my calculations I decided I wouldn’t be making a habit of manufactured spending via reselling.

Thanks to Hermes destroying one of the boxes, getting another one wet and losing a third one, I had to deal with three complaints. Hermes sorted out the first two complaints (each item was covered up to £25) and I assume the third person managed to track her LEGO down after I suggested filing a ‘missing item’ complaint.

So … was it worth the effort?

You can see my entire inventory management and calculations here.

If you just want the high level information, my total outlay stands at £321.63 in return for 99,666 equivalent Avios.  In effect, I’ve ‘bought’ 99,666 Avios for 0.32p each.

I’m relatively new to the miles and points game so I’ve not claimed that many miles but based on my tracking, I’ve averaged 0.3p per Avios.  Most of these miles will be used up on a redemption from Manchester to Dubai in First Class in February next year and I’m looking at a value of around 2.06p / Avios on that route. Even if you value miles as low as Rob (0.75p/Avios) this is still a pretty good deal.

What about your time? Doesn’t that reduce the value of these miles?

It’s true, I haven’t accounted for my time. This wasn’t insignificant and has taken several hours over the past few weeks. I’m a reasonably well-paid web development contractor so I could have almost certainly spent my time on a more productive activity than packing and shipping LEGO boxes!

When factoring-in my time, it is not quite as lucrative a deal.  Knowing the value I’ll be getting on my redemption to Dubai still means it’s a net gain on my time and money.

Would I recommend reselling? Would I do it again myself?

Difficult question …. I can see myself doing this again under the right circumstances (another big Clubcard bonus from Tesco for example) but definitely won’t be in a hurry to repeat this process each month.

When researching reselling as a manufactured spending technique, all the guides encourage you to build up enough cash reserves that you can afford to have your stock sat for as long as a few months to ensure you get a good price for it. I neglected this and was in more of a rush to sell.

I got lucky with the LEGO sets and ended up with 42 boxes of a product that was reasonably easy to sell. However one of the coffee machines was heavily discounted just a few days after I purchased it and I’m now left with £69 locked up in a coffee machine that Nespresso is selling for £59. Not ideal … but a reasonably small problem in the grand scheme of things.

If you are tempted by reselling, make sure the numbers stack up before you pull the trigger on your move. Research your products and ensure you can sell them quickly and at a price that works for you.

The goal with reselling should be to generate profits and allow the points to accumulate as a bonus on top. In my opinion, this isn’t a great way of accumulating points even if you can ‘buy’ them very cheaply!”

John Peden has been collecting points since 2013 and made his first big redemption earlier this year. He and his wife flew return to Mexico City with BA in First for their honeymoon which you can read about here.  He runs a web development company called Tweak Digital and lives in Manchester.

(Want to earn more Avios?  Click here to visit our home page for the latest articles on earning and spending your Avios points and click here to see how to earn more Avios from current offers and promotions.)

Why I spent £1052.84 on LEGO Friends - Confessions of a HfP reader (Part One)
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Comments

  1. When will Tesco points balance be in my tesco clubcard acc for this quarter ?
    Its just says processing come back in a few days ?

  2. Lady London says:

    Did I spot that out of about 14 packages with them, Hermes couriers managed to lose or damage 3 of them? That’s a loss or damage rate of over 20% !

  3. Great article John. I did exactly this on a smaller scale last time Tesco ran this promo and it all worked fine. I am repeating the exercise now though looking on Amazon there are 100s of people selling the same items so I suspect this idea is not a new one!

    One other thing to note is that you have 14 days to collect a click and collect order so you could place the order, put the items on Amazon / EBay and if they don’t sell in 2 weeks just don’t pick up the order.

    If Tesco were that bothered about bulk buying they wouldn’t allow it. I’m sure their systems are eminently capable of placing restrictions on order quantities which they probably do on items that are genuinely popular. I’m assuming they are running this promo to clear out stock which isn’t shifting fast enough.

    • I thought you only had 7 x days to collect from store or it gets returned and points deducted?
      Clubcard has hits lots of people who least expected it from reading past experiences on other forums. It just takes an unlucky event and your shut down with nil points.
      Strangely, their systems allow you to buy in bulk but their terms clearly state they can shut you sown if they suspect not in the spirit if the scheme.
      I would never bank on you will be fine buying lots of the same items or similar especially when big points are at play. Long game like Genghis said is best to ensure safety.

  4. Got my daughter the hotel last Christmas (at her request)!

  5. How do I use the £150 code when they are £74.95 each on Tesco.

    RRP is £99.99, Toys r us are selling them on ebay for £74.94 with free post, who is going to buy them at RRP for £99.99 + post.

    You then have 10% ebay fees + 3.9% Paypal fees, 2nd class signed is around £4.00 so for each sale you get back around £60, so the cost of the sale is a loss of around £15 per box.

    Do I need a new calculator or does this not add up.

    • The code was on the last lego promo, not this one but yes agree with you on fees, paypal and courier costs all when totalled up are hefty.
      10% ebay fees of total amount, couriers are £6.95 upwards and paypal at 2.75% or 3.4% + 20p of the amount to withdraw.

    • I think they were £78.70 each during the last promotion so two purchases and you could use the code.

      • You would of only got 1500 points though for the two purchases totalling over £150 to get the code to work.

    • Sorry and I also added a very small Lego friends pop star set for under £10 which I sold for around £14.50 on each order.

      Toys R Us didn’t have them for £75 then, as the prices fluctuate across the year among retailers (High Speed Train is another set that fluctuates a lot) I sold them for £89.95 per set, packaging cost me nothing, just courier costs (Hermes is cheapest) and Ebay fees.

  6. Fingers crossed your points post to you! Keep us posted :-)

    • He should find out next Monday, if they aren’t there you normally get a letter a few weeks later.

      • What does the letter say? “Your transactions were contrary to our T&Cs so we’re not giving you the Clubcard points”?

        • It will simply state they have detected unusual behaviour in your account which they feel is not in the spirit if the scheme in which it was designed for so they are closing your account/s and will not be processing your points to vouchers.
          In effect, you are banned from clubcard. Some have argued case law with Tesco and won what we believe to be out of court settlements of monetary value but not points reinstated and they have been sworn by confidentiality agreements.

  7. OT. Does anyone know how Creation report FX charges on their statements? I.e. For a £100 spend would it be two charges of £100 and £3 (à la MBNA) or one charge of £103 (à la Amex)?

    • One charge like Amex

    • Which Creation card?

      I only use my Creation Everyday MC abroad. This is notionally 0% f/x but the transaction is posted gross with the f/x surcharge deducted separately.

      • IHG Creation. I plan on using it in France over the next few days (on expenses). It sounds like it will post gross (with no deduction in my case – ie. no separate line item).

      • Marriott shows the charge as just one figure with the text underneath saying something like ‘$100 translated at $1.29 which includes a 3% foreign exchange fee’ (I don’t have a statement to hand at the moment).

        • Hmm. I might just use my Curve card linked to IHG then as I don’t really want the 3% FX fee to be explicit. My boss lets me use my own credit cards for points but I also have a corporate card (issued by my bank) which is FX free for staff.

  8. Apologies for off topic but I wanted to know the following: referral bonus is max 90k for Amex gold holders. However I heard that this sometimes goes to 99k or 108k. How would I know if I reached the max number of referrals? It’s just that I have shared my link on all my social media and I have lost track! I am already at 90k from referrals.

    Thsnks!

    • Some people get to 99k, some to 108k. No logic to it. I think Amex applies the caps manually, or perhaps checks at the end of each day or week so if the last couple come close together you may go over. NEVER seen anyone beyond 108k.

      NEVER heard of anyone getting above 25k on the Starwood card though, interestingly.

      Whether or not you get your bonus, the person you refer still gets the higher bonus.

      Wait until January for the limit to reset if unsure.

      • Thanks Rob. What I am asking though is how I know that I reached my limit so that I can start sharing my missus’ link?

        Will my referral link become invalid or Amex will contact me saying I have reached max number of referrals?

        • You won’t know.

          All that happens is that you refer someone who gets accepted but you won’t get any points. Beyond 90k it is a gamble. It isn’t a risk to the person you refer as they WILL get 22k regardless.

          Frankly, given we are in November near enough, I would use your wife’s. The limits reset in 10 weeks after all.

  9. Thanks for sharing.
    But I gotta say, this is amusing. I’m a web contractor too, I make good money but sometimes spend my time on stupid things, and be angry to myself afterwards. But this is a whole new level. Probably you make £10.000+ a month already, why spend your time on this? I’m not joking, I’m asking, really. What were you thinking?
    I think this behaivour and mood should be a research subject.
    I think this is called FOMO. Fear of missing out. People see something, and they want to take advantage, without thinking through.
    Cheers mate.

  10. I think we should not go on a personal level. We are here on this blog to research and HELP each other how to get the most points out of our money. It should be not of our interest, why other people do what they do, our lives can’t be so empty that we have to stick our nose in other people’s lives.
    Or make interpretations. It can be FOMO, but it can be something else too, like having a hobby.
    Not all what appears to us “weird” has a sick reason. Nobody should make such a statement
    without being a psychologist or a friend who knows the other person very good.
    We should concentrate on our own problems and our own reasons why we do this or that.

  11. barnaby100 says:

    I may have suggested this before but I think that you may find that if you do a click and collect at a tesco metro and then decide you dont want it when you go to collect it (the box was damaged) they put it through as a till refund and it doesn’t deduct the points. This may just be mine (but it happened twice). They cant access the online system in the same way – so you show your invoice and they refund that amount.

  12. Lego purchases seem to be attracting about 7 miles to the £ via the Avios store on top of all the Tesco bonus.

  13. Good article, it’s crazy what our hobby gets us to try. I bought Lego for £104 with this offer, so 1604 clubcard points / 3,850 Avios. Top cash back used as well so Lego cost approx £102. Sold straight away on Amazon for £99.66 after fees, I’ll need to pay approx £6-7 for postage, effectively a ‘loss’ of £8-9 (I will recycle tesco’s packaging of course), given that I paid with an Amex, the Avios earn is very close to 4,000, so I’m not unhappy with that as an investment of 0.225p per Avios. It’s mostly time that’s the issue here (I don’t think I would have done this if the nearest tesco & post office were not just a short road away from me)