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Why I Spent £1,052.84 on LEGO Friends – Confessions of a HfP reader (Part Two)

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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.

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.

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.

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 workplace.

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?

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!”

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Category

British Airways and Avios, Tesco Clubcard

Comments (126)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Waribai says:
    23 Oct23 October 05:22

    Good article. IMO any Tesco bulk buy for the points bonus is a risk as it just takes one competing retailer to offer a substantial discount and you are snookered!

    • John says:
      23 Oct23 October 08:50

      Agreed. There are instances of people in the US reselling on Amazon and then having to compete with Amazon directly when they offer a heavy discount on a particular product. Not a good situation to be in.

      • Barry cutters says:
        23 Oct23 October 09:29

        surely you can just get a refund from tescos if they don’t sell for a worthwhile price. Or even list on eBay before you buy the things. Buy it as you sell it

        • Genghis says:
          23 Oct23 October 09:56

          I’ve never thought of short selling lego before! 🙂

          • Daz says:
            23 Oct23 October 13:29

            I can just imagine the great Lego crash of 2017 from people selling short Lego

        • Waribai says:
          23 Oct23 October 10:56

          You can. Asking for a refund on a bulk buy which has a big points bonus promotion though can potentially bring your clubcard account up for a Tesco ‘audit’ which at the best is inconvenient!
          You can also do the second but the leverage gains tend to be on products which are popular but stock is limited. If stock is plentiful enough that you can ‘sell before you buy’ it’s unlikely you will sell at a significant enough profit to make it worthwhile.

        • Mr Dee says:
          23 Oct23 October 14:52

          Amazon match Tesco prices for a lot of items and Tesco tends to go out of stock for the popular items that sell so if you get caught out then your Amazon seller account would take a hit for cancelling an order if you can’t source the item elsewhere.

  • Frenske says:
    23 Oct23 October 06:15

    Good article. It certainly dissuade me from trying. Usually I have no problems to reach the bonus for sign up (I sign up with new card when I know I go on business trip).
    I value my free time more especially after having a kid.

  • David says:
    23 Oct23 October 06:35

    Is this from the last Friends promotion? If so the vouchers aren’t in yet so are you sure you’ll get them as they don’t take kindly to this as it’s not in the spirit of the scheme.

    • Jason says:
      23 Oct23 October 07:36

      Don’t make too much profit as you don’t want HMRC looking at your eBay account too closely 🙁

      • Paul says:
        23 Oct23 October 08:04

        There could be a possibility of offsetting some tax against the c. £300 outlay…
        🙂

    • John says:
      23 Oct23 October 08:54

      I actually run a limited company so asked my accountant if we could offset any of this or run the entire thing through the business as a potential experiment into online retailing. He VERY quickly vetoed the latter idea but I guess it’s possible that I might be able to offset some of my loss against tax.

      Regarding the vouchers, the points flagged in mine and my wife’s account where they sat until the end of the month. I’ve never watched my Tesco balance particularly closely but they’ve since been removed from the account and ‘are now in the process of being converted to vouchers’. I’m hoping this is normal as the operation has been considerably less fruitful if Tesco are going to pull the points from me!

      • David says:
        23 Oct23 October 10:57

        It doesn’t take a lot for Tesco to not give you your vouchers as they have all the details…

      • HAM76 says:
        23 Oct23 October 13:59

        Do you expect any problems with customers returning items with the two year period that businesses have to grant to consumers according to EU consumer protection laws, or with customers that paid with PayPal and demand their money back for some bogus reason?

        That’s what is keeping me from selling stuff on eBay when there is any risk that I might be considered a commercial trader.

        • Mr Dee says:
          23 Oct23 October 14:55

          Choose products that are unlikely to become faulty and there would be less risk!

        • Rob says:
          23 Oct23 October 15:44

          Return period is 14 days unless technically faulty, and LEGO does not break down!

          • Andy says:
            23 Oct23 October 18:16

            14 days to notify of the problem, 28 days to return the product. In reality eBay will side with the customer even if the item was received a couple of months ago.

          • the_real_a says:
            23 Oct23 October 18:34

            No the guarantee from ebay is 45 days. Post this date they automatically close the claim and refer you to the seller

          • HAM76 says:
            23 Oct23 October 19:40

            I was thinking of warranty issues here. That is a minimum of two years.

      • Just Saying says:
        24 Oct24 October 00:49

        A web contractor with such time on his hands? Personally I think you either need to concentrate more on your contract or….get out more.

  • Frankie says:
    23 Oct23 October 06:50

    Great article. Really enjoyed reading it. If I see seat availability for my desired flights but haven’t triggered my 2 for 1 BA voucher spend, I usually just book an expensive refundable hotel room for a week on hotels.com and then cancel it a few weeks later. Years ago I used to go out and buy expensive things in Argos on the Amex and then return them, but get the refund onto my debit card which used to always work – but that was a bit of a faff

  • Nick says:
    23 Oct23 October 08:20

    Fair play to you risky strategy but it paid off almost!

    You say you were struggling to hit the spend on Amex gold but then your a reasonably well paid web designer. You then go on to spend £1k on Lego to make up the points game. I’m not sure what to make of all this to be honest. I wouldn’t go out of my way to collect Tesco clubcard points etc as I couldn’t afford to tie up £1k on the off chance it will work out. I actually think the lesson here is do what your comfortable with if you are then go for it. For some like me too risky I would rather throw all my spend on Amex gold live normally and see where it takes me personally. Line I said though fair play to you !

    • John says:
      23 Oct23 October 08:56

      Had started to explain this when writing the article but didn’t think it was really relevant. I can usually hit the signup bonus without issue but (thanks to HfP) I spent much of the summer out of the country and the Amex Gold had arrived right at the start of this period. As such, I returned to the UK and had some catching up to do.

  • Egg says:
    23 Oct23 October 08:22

    it is a lot of hassle.
    I done the lego deal from a few months ago (where there was a double glitch) & got a bonus 1500 clubcard points.
    Initial outlay was only £62, sold for £70 & total delivery was £15 (£2.50 a box) & £7 ebay fees.
    Sold all the lego within a week. So £14 out of pocket in exchange for 1500 clubcard points (about .039p per avios?).

    I could have saved on delivery if I had less items to sell

  • Vijay says:
    23 Oct23 October 08:24

    Why would anyone be bothered about going against the ‘spirit’ of the scheme? I’m genuinely interested as it may not be in the spirit but also I’m guessing it’s not against the law?

    • Tracy says:
      23 Oct23 October 08:42

      If Tesco decide not to award all the Clubcard points because you are not operating in the spirit of the scheme, the maths falls apart. Probably somewhere in the T&C about trading or fair play.

      • John says:
        23 Oct23 October 08:59

        Probably…but there are plenty of articles about people arbitraging much better opportunities than this (depositing Visa gift cards into an NS&I account anyone) for a long time without any problems.

        The points showed up without issue – they’re split about 75:25 across mine and my wife’s account remember so I doubt it’s a significant enough transaction to flag on Tesco’s systems.

        Time will tell!

        • Callum says:
          23 Oct23 October 10:25

          NS&I accepting deposits is very different to Tesco awarding bonus reward points. You’re just moving cash around – if they don’t accept you still have the cash. With this you risk being left with the product but no points! (Though I see it was fine for you this time)

          I’m fairly certain they’ve withdrawn bonus points in the past when people have bought in bulk.

      • Erico1875 says:
        23 Oct23 October 10:55

        The goods have been shifted, so even if Tesco removed the CC points. a loss of £300 is hardly on the scale of the sky falling in.
        I found the article quite inspiring.

      • Mr Dee says:
        23 Oct23 October 15:04

        Its not up to Tesco to decide what you use the goods for, if they wanted to limit the quantities they can do it easily and is often done for special promotions.

        • the_real_a says:
          23 Oct23 October 18:37

          Clubcard T&C`s state that points will not be awarded for commercial purposes. They have referred to this rule when removing points from peoples accounts in the past. Just look through PTS for evidence. I remember this happening when people bought more that 1 copy of games / books that had bonus points attached a few xmas`s ago.

  • Genghis says:
    23 Oct23 October 08:25

    Great article John and good advice. It’s good to hear about the experiences of others.

    I’ve thought about this reselling route before but ruled it out due to being a bit of a faff but should the maths work on a future deal I could give it a try…

    • John says:
      23 Oct23 October 09:02

      Exactly what I was trying to get at with the article. Assuming the maths doesn’t fall apart and I do get the points from Tesco, I’ve returned approximately 10x my outlay. Factoring in the time and hassle of it all, I’m not in a rush to repeat the exercise but I’m not disappointed with the outcome either.

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