I mentioned this article on a recent episode of Bootstrapped.fm. Posting it here in case anyone else is interested in the economics of running various physical businesses.
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he pays $29.90 for a Microsoft gift card that sells for $30
Holy carp! That’s some margin! 
Then thinking of it, it makes sense. Gift cards is the only thing I still drop by into a game shop (I know I can get them in other stores, but I always forget where), so this is a loss-leader of a kind for a game shop. But still I do not buy any games in the boxes anymore - even my kids don’t want them: “too much trouble to insert the disk” 
Interesting article. Selling physical stuff sounds tough. I’m so glad I sell electrons rather than atoms!
he pays $29.90 for a Microsoft gift card that sells for $30
Apparently lots of gift cards are never redeemed. So that $30 card might only cost Microsoft $15-20 and it seems indecent for them to sell it to the retailer for $29.90.