[quote=“TravelerMSY, post:163, topic:649”]
I’d say whether MS is worth it would depend on your alternatives.
[/quote]I concur.
It also depends highly on one’s locale whether it’s conducive to MS activities. It’s one’s choice if they’d take advantage of the opportunity or just ‘leave money at the table’. I leave it to each individual to gauge the ease or difficulty attributed to MS, they’re the only ones to determine that. I have a well paying job but I enjoy the miles/hotel points, not counting the rebates I receive each month for activities that I blend in with my weekly grocery shopping. Social engineering has been a vital part of this activity and I’m grateful for the good rapport I’ve established with the cashiers I deal with on a regular basis. In my case, the online acquisition of VGCs and subsequent draining has been relatively hassle-free even though I encountered a few snags that were quickly resolved.
I think that’s a faulty standard. The economy consists of businesses and business activity that continues to exist. In order to continue to exist a business needs to turn a profit through activity which isn’t stopped by the government under which they’re operating.
When I hear an economist perform the mental gymnastics required to reach conclusions like “futures traders perform a valuable service by allowing businesses to hedge against risk and that’s the service they perform to the economy,” I roll my eyes a little. Someone who is preoccupied with others perceiving them as being a good person might care about such distinctions, but it’s silly. I have yet to meet a trader who got into what they do for altruistic motives. Now one might argue that it’s the result that’s important rather than their motives, but then you have cigarette companies, alcohol companies, casinos, fast food restaurants, etc. I think at a certain point you have to concede that any social or economic good done by a particular individual or business is often more of a happy coincidence or PR than intent.
When I MS it’s strictly to turn a profit, but if I wanted to rationalize the “good” I do in the world (I don’t really, but for the sake of argument):
Robin Hood: My profits often come at the expense of big banks.
Fighting the push towards digital money: Bank/Visa/MC want every transaction in the world to pass through their networks so they can skim a couple percentage points off of all of them in interchange fees. Prepaid and Visa Gift Cards are part of their push to close the gap left by the unbanked who are used to transacting in cash and trying to move them to transacting through their network. By causing the issuers of these cards to lose money on my transactions they’re forced to make up that money elsewhere in the form of increased fees to their regular customers. These increased fees make their products less desirable to the unbanked, potentially decreasing their customer base. If it wasn’t for people like me these issuers could potentially afford to sell Visa Gift Cards without a purchase fee and simply make their money on breakage (keeping the money their customers don’t spend on the cards) and float.
Regarding increased fees particularly at drugstores where they raised the vanilla fees to $5.95 from the previous $4.95, I have decided to use our OBCs less. In the past, the offers of buy any 2 vanillas, get $5 Walgreens GC free enticed me to meet the initial spend in a short time so I can start earning the 5% RD when this deal come by. This year, the offer came only twice at most, if I’m not mistaken, so that is not very encouraging plus the fact that the rats are always coming up with new policies that further restrict MS with the card. I’ll continue to monitor sync offers on our cards but won’t likely make an effort to reach the cap especially if incomm has done away with the free GC offers to subsidize the fees.
TripleB, manufactured spending does add value to companies if you view stocks as the product being sold. MS increases sales numbers and makes the stocks more attractive.
I know you are thinking that it decreases margins. This is true, but sales volume is a MAJOR factor for stocks. Companies doing large volumes even at a slight loss command high stock prices.
If it were truly a benefit to the companies involved then they wouldn’t continuously discourage MS efforts. They would make it easier to do, possibly even running their own blogs teaching people how to do it. They could get the public to MS enough volume that the stock drops to zero when the company runs out of cash.
Anyone use Square to MS a small amount of money from gift cards? I read on other sites that Square will shut you down for using your own credit card or for using too many gift cards.
However, I’m wondering if the smallest amount of MS can be done - maybe $500 every week or two?
I picked up a $500 visa GC from Wal Mart using my 5% off Freedom Q4 promotion, so the total cost was about $480 for the $500 card valuing UR at 1 cent per point. The fees on Square are 2.75% for $14, which means I make $6 net.
This isn’t scalable since I don’t think I can get $500 GCs at 5% off regularly but I picked up a pair of $200 FiveBack GC from Office Max this week for $378 net. If I ran the $400 through square, I’d pay $11 in fees for a net gain of $11.
My Square account is through a legit LLC with legit EIN, not in my personal name, linked to a bonafide business checking account in the name of the LLC.
To be safe, I wouldn’t run them for the total amount. I’d run the $500 card for $497.34 to make it look like a legit expense, and then swipe the card during my next regular in-store purchase to get the last 2 dollars out. I’ve learned last week that if I have a few dollars left on a visa GC, I can swipe it first when buying groceries, it takes the entire balance out, and then prompts the cashier to have me pay via a second CC for the balance. Seems like a good way to avoid looking like an MSer.
I was planning on using these Visa Gift Cards for routine spend that has no bonus category, that I’d otherwise earn only 2% on, such as Costco. Thus, the net cost of using Square is only 0.75%, not 2.75% since if I run the cards through square and get the money in my checking account, I will be able to use my 2% CC on the purchases made with that money. Of course, if I was going to do the MoneyOrder route, it would be much cheaper of a cost but I’m still hesitant to do that. My only local bank is Chase and I value my relationship with them and don’t want to start depositing money orders and risk getting flagged as an MSer.
I’m actually not sure who win/loses with this. Of course MSers win, or should win. Certainly the payment processor wins, WalMart Wins, USPS wins in that they’re made whole from the debit cards they process as they would normall do so.
CC issuers are trending towards a win. They’re seeing an increasing share of their pie be given back to ALL CC users as consumers get more and more hooked on CC rewards. If Citi wasn’t making money on a 2% card they wouldn’t have issued a 2% card when they did. When you get into things like 5% cards then I can argue that yes, they’re losing on those products. But those are few and far between, and are capped to limit losses now.
Where it gets tricky for me is the prepaids. I have to imagine in aggregate $500 Visa gift cards have to be profitable, otherwise they wouldn’t exist. The bump up by $1 for Vanilla products vs a lower $250 cap is further proof of this.
Stores that sell cards on credit probably lose on an individual card, eating 1+% loss on processing the CC for the individual card but again as an overall they wouldn’t continue to sell them if they weren’t making money overall.
A normal person would spend a $500 card over the course of a few months, possibly doing 10 - 20 transactions to use it up. Each transaction might bring $.30-$.50 to Vanilla with a small amount going to the store who sold the cards as well. That would mean another $3-$10 per card. When that doesn’t happen and you drain it as a debit you’re probably giving them something like $.35.
Online prepaids are even more headscratching to me. They’re paying a payment processor to take your CC. They have a running record of the cards you’ve bought and how your drain them because you’re not anonymous. But they keep plugging along and paying us to buy their wares.
it’s actually exploiting loopholes the CC issuers don’t seem to care about or want to as of now… As far as “value” you are correct, we don’t make any economic value for the returns. It’s just moving lots of $ around in a circle, and we keep the points, or. cash back. it really is a circle and just enriching the card holders.(us) You can look at it this way. How many banks/credit card issuers have f’ed over folks. All of them and they still do.They charge 24% interest and crazy late payment fees. So we beat them at their own game, until further notice.You also need discipline to be in this game.
tedteddy is correct. The amount of MS we do (especially on Amex OBC) is a money loser for them, BUT they just want to show volume for their stockholders and investors, I think. They could end all this tomorrow with a simple email to me telling me there will be no more points as of tonight. But they don’t. Also I was one the many closed down by amex in oct of '14 for excessive spending on this card. Now 3 years later my wife and I have 4 between us. Go figure. They needed the volume to show the investors, be damned what it costs them in rewards. Plus how many folks are actually doing this? I figure it’s a very small % of these companies customers, probably not worth it to have employees manually pour over all our transactions. So with 4 OBC it’s a profit of 2k per card. so 8k yearly, for easy work.
I used to MS at Sam’s club when they had the variable $500 MCGCs with $4.95 fee but sometime ago, they removed these and replaced them with variables $250 and IINM, also increased fees by $1. SC is not my regular grocery shopping store, I go there mainly to MS but with no more $500 MCGCs, I didn’t renew my membership. I will definitely feel the ‘pain’ when warehouse clubs are part of 5% cat bonuses from Chase or Discover since it was so easy to meet the $1.5K threshold per card.
The drugstores still carry the $500 vanillas but if they also lower the amount to $250 (have seen these at Rite Aid with $6.95 fee), it’ll definitely put an end to my MS using OBC. However, without AF, it’s still very useful for sync offers so I’ll definitely keep them.
I am in an area where MS is thought to be ripe for the picking. So, I would like to start small and see how it goes. I have two questions:
I have CCs that give decent CB, but the terms for each card include the clause, “Pre-paid gift cards… do not earn cash rewards.” However, my understanding is that cash back categories are based on the merchant code category (MCC), not an itemized receipt. Is this correct, or would it be risky? Would risk be mitigated by making another small purchase to ensure the total cost is not something that would raise suspicion. or is that completely unneccessarry?
I assume you would maximize benefits if the purchase of the VGC were done in conjunction with other rewards programs. For example, making a purchase where you can earn Plenti points, or a grocery store that offer points for discounts on gas, etc. Correct?
