Arbitrage is created when something doesn’t trade at the same price on all markets. According to this flier, handed to me at Barnes & Noble on Black Friday 2010, I can give them $100 and they’ll give me $110 in gift cards. I would figure that those cards could be resold for at or near face value online. A person could also use the gift cards to buy Nooks and sell them at or near face value online. Looking at their return policy, a person could purchase items with the discounted gift cards and then return the items within two weeks for a full refund. Get $110 in gift cards for $100, buy $110 in items, return those items and receive $110 in cash.
I guess some of this is no different than buying cheap electronics on Black Friday and then reselling them elsewhere for near the regular price, it just seems odd when the fiat money of gift cards is involved.
I did not purchase any gift cards, the above is just my observation. I don’t know what Barnes & Noble could do to stop people from taking advantage of this situation, or if B&N even cares, but I waited until the sale was over to write this post so nothing I noted above could be used to violate B&N store policies.