For me, Magic Online is little more than the platform that brings me LSV and Conley draft videos each week. It’s an amusing curiosity that I revisit from time to time, usually when Ravnica drafts are on tap, but I don’t consider the cards I own online to be part of my real collection.

I understand the positives of MTGO to be sure – it’s a valuable tool for grinders, a boon to players with odd schedules, and a crucial piece of software for Magic junkies who live an hour or more from their nearest game store. It’s also perfect for financial speculators, as the near-instant trading and lack of a transaction fee means that you can make faster and bigger profits on MTGO. Because I spend so much of my time at a corporate office, however, I haven’t spent much time exploring that world.

But maybe you do and you have hundreds of rares sitting in your account. Or maybe a new game store opened up near you, and you want to port your MTGO account into the physical realm. Or you tried online play for a while and want to cash out. Whatever the reason, Wizards does provide a service – set redemption – wherein you can turn your bleeps and blorps into physical Magic cards.

Sorcery? Perhaps. But it’s certainly useful, especially as a pressure valve in the balance between the paper and online card markets. Whether the majority of your collection is online or physical, you should understand how the digital and physical markets interact and what set redemption means for you.

The Rules of the Game

Set redemption isn’t free.

In order to turn a set of digital cards into physical ones, you need to pay Wizards a $5.00 handling fee that goes toward printing the extra sets and hiring people to process redemption claims. On top of that, you will need to pay Wizards a shipping fee - $3.00 in the US and a whopping $30.00 internationally. Oh, and you need to pay state sales tax (on the $5 handling fee) or VAT/import tax (on the $50.00 declared value of the set) as well. The sets generally take about two weeks to arrive, and are packaged in white cardboard boxes with Styrofoam at the ends

None of those costs seem like much on the surface, but it’s important to factor them in if you’re trying to make a profit. There’s no way to shortcut them, either – you’re paying on every set you redeem, no matter how many copies you want.

You also can’t redeem sets whenever you feel like it. In most cases, redemption doesn’t start until about a month after the set comes out online – which is about a month after the set is released in person. This means that there is no way to redeem sets during the high value price window right after a set first comes out.

Further, redemption is only guaranteed for approximately the duration of that set’s life in Standard. Zendikar, for example, was released online in late October of 2009 and redemption was halted in October of 2011. Scars block is only guaranteed until October of 2012.

After the guarantee date lapses, Wizards will honor redemptions for about another year, but it has a big red ‘while supplies last’ flag on it. You certainly can’t hoard sets and hope to get them redeemed at any point after the deadline or you might lose out.

You also can’t redeem partial sets. If you want physical cards, your collection must contain at least one digital copy of each card in the set including basic land. This is especially fun to figure out when dealing with MTGO’s arcane and broken inventory system. Bonus points if you’re dealing with Innistrad block, when the backsides of double-faced cards make adding your sets up even more awkward online.

Foil cards are also considered to be entirely separate sets for the purposes of redemption. You can’t redeem a foil card as if it were a normal one – you must have a full set of foils or a full set of non-foils. (If you can put together a full foil set online, though, you can redeem it for a full foil set of physical cards.)

Got it? Good. All of these points are important to remember as we dig deeper into the financial implications of set redemption.

The Price of a Digital Object

The reason most people begin to think about set redemption is because they go online and notice that the prices on some chase rares are far lower than in paper Magic.

For me, it was the fetch lands in Zendikar that first got me thinking about redemption. Back when they were being drafted, fetches sold online for 1-3 tix (‘tix’ is shorthand for MTGO ‘event tickets,’ which are generally worth between .93 and 1.00 each) compared to $10-$15 at my friendly neighborhood game store. Intrigued, I wondered if doing the work of putting together a set or twenty would allow me to go infinite as long as I was willing to put in the effort to put the cards together and deal with the redemption process.

The problem was that I was far from the only person to have this idea. If there is enough of a profit to be made doing redemptions, chances are one of the bigger secondary market retailers will figure it out and exploit it themselves. If you do the math, you’ll generally find that at any given time the value of a redeemable set on MTGO is about 20% less than its counterpart in paper. This is because you need to factor in the ~5% cost of redeeming the set and the ~15% cut that you need to give eBay and PayPal in order to generate a profit.

Where this paper/digital price difference is made up has a lot to do with what people are using MTGO for.

In the early days of set redemption, before quite so many people started using MTGO to play Standard, there would be a price warping where low-level mythic rares were worth quite a bit more online than in paper and rares were worth a lot less online. This is because set redemption was the engine that drove the online marketplace. And if all you care about is collecting one of each card, each of the mythic rares becomes quite a bit more valuable.

Nowadays, more people actually play constricted online and MTGO prices correspond much closer to physical prices. This paradigm breaks down, however, when dealing with both foils and casual cards.

By and large, the MTGO player base is interested in competitive formats. The lack of human interaction and the poor multiplayer interface is a much bigger blow to Commander than it is to Standard.

Further, the shimmery foil animation online doesn’t interest most of the foil hounds who love them in person. That leaves set redeemers and ‘I want to foil my entire deck out as an intimidation tactic’ guys as the only players who want them. This is why you can find a foil [card]Dungeon Geists[/card] online for under 4 tix ($8 in paper) while a foil [card]Archangel's Light[/card] will run you about 8 tix online and just $2.50 in paper.

It’s also important to note that there is very little correlation between online and paper prices on non-redeemable sets. This is a world where you probably wouldn’t find anyone who would trade you their [card]Vindicate[/card] for your two [card]Underground Sea[/card]s.

The Impact of Set Redemption

Without set redemption, MTGO prices have historically gotten quite low. Back in Lorwyn block, when set redemption was ‘disabled indefinitely,’ [card]Thoughtseize[/card] and [card garruk wildspeaker]Garruk[/card] were 3-4 tix each online and $20 - $30 each in paper. When it was later announced that set redemption would return, many of the Lorwyn/Shadowmoor block cards that were currently in Standard shot from below buylist prices to much more healthy values. Keep this in mind if Wizards temporarily disables redemption again when the new MTGO client is rolled out.

I believe that one of the reasons Wizards continues to allow set redemptions is that it justifies the price of charging full retail for a digital pack of cards that costs nothing to produce. Part of why we can justify spending $4 on a pack of online Innistrad is that set redemption ties its value – at least temporarily – to a physical card. The price of online Standard can never get too low as long as set redemption remains a possibility.

Set redemption also works nicely to help depress the price of physical cards. While I don’t have access to how many sets are actually redeemed, I would estimate that the number is in the thousands – if not the tens of thousands. That’s a nice influx of mythics and rares regularly entering the paper Magic market for the duration of time in which sets are being redeemed.

Empirical evidence bears this out as well. While the secondary market for a given set tends to settle before the redemption period, it’s at about the six week mark where cards that aren’t seeing significant Standard or casual play tend to bottom out.

This is important to remember if you are attempting to calculate a formula for profitable set redemption. Do not assume you will still be able to get the same amount for a set once the redemption period starts, because quite a few others have the exact same plan.

Selling your Sets

Obviously, set redemption is at its most lucrative if you have a retail store or event booth and don’t have to pay transaction fees. The ability to buy cards for around 15% of eBay is huge if you’re gonna be able to get fifty cents for every [card]Lost in the Woods[/card] and full price on all the [card sorin, lord of innistrad]Sorins[/card].

If you don’t have a store, well, you’re probably just looking at good old eBay. I took a look at the different way sets were packaged and came up with the following numbers:

- If you want to buy a playset of Dark Ascension (4 copies of every card) all at once, you’ll be paying around $525.00

- If you want to buy a playset of Dark Ascension one set at a time, it’ll only run you $480.

- If you want playsets of every rare that retails over $1 plus 4 copies of all the commons and uncommons, you can snap up the relevant singles for around $430.

These prices are based on eBay completed listings and attempt to factor in shipping as well as how recently the auction closed.

To be fair, the $525.00 number is probably a little out of date. Very few auctions at this price point actually sell, and I doubt you could get that at this point. That said, never estimate people’s desire for convenience and unwillingness to do research.

Going into this, I had wondered if it might be at all lucrative to buy complete sets, split them up into playsets of hot singles, and sell those. Unfortunately, the profit just doesn’t seem to be there. There’s no possible way you’re making up that $80 in selling playsets of bulk rares.

What about waiting? Well, Dark Ascension sets sell for around $120 right now, while Mirrodin Besieged sets go for around $150. New Phyrexia is around $170. Both of those are more powerful sets than Dark Ascension, but by and large it seems that Standard sets are generally worth more during their second year of format legality. This is mostly because the cards are still crucial for tournament play, but many fewer people are drafting and redeeming them.

If you wait too long, of course, you’ll lose value – but not as much as you’d think. Alara Reborn and Conflux still sell between $95 and $110 per set thanks to collector and casual appeal.

Redeeming Yourself

While doing mass set redemptions isn’t going to make you much money unless you own a retail store, it is still a valuable tool that a savvy trader can use to bolster their own collection.

If you simply want a set (or four) of the latest block, you can bypass the 15% surcharge that you’re effectively paying eBay for the privilege of buying cards there. All you need to do is to go online and find some players who are willing to give you a good deal. If you have the time, only deal with real players and bargain your way into sub-bot prices. This is certainly the cheapest possible way for any player to buy a complete set.

Of course, it’s likely only worth your time if you actually want a complete set. If you only want a set of the tournament playable cards, you’re better off buying them individually.

If you’re buying sets to redeem, the best time to get them is about two or three months after the set is released. This is when the set is being drafted the most and the prices are depressed. You’ll generally be able to make a small profit simply by holding them until the same time the following year.

If you really want to get your money’s worth, though, there’s an even better option: start playing block online. By supplementing your drafting with block play, you’ll naturally be drawn to acquire most of the money cards in a given set when they’re at their lowest price point. At the end of each block season, trade for the rest of the cards you need to finish your sets and redeem them. This is right about when the cards start becoming more valuable in Standard, so you can redeem them and get your money back - or even make a profit.

Until next time –

- Chas Andres