Buying gift cards with cash back/rewards CCs

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Secretlurker
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Re: Buying gift cards with cash back/rewards CCs

Postby Secretlurker » Tue Jun 16, 2015 6:05 pm

kdm31091 wrote:
lobbythis wrote:Well, it's definitely the cash-out style prepaid credit cards that are the worst and most common form when referring to MS. Whether or not lots of gift cards cause the same problem is tough since I don't know anyone who does that and haven't read online about people buying large quantities of gift cards and running into problems. My guess was that if a lot of even numbered transactions kept happening at the same grocery store, etc., it might start to look funny. Wish Travis from Amex was more frequent here. Maybe he could answer odd questions like this.


There's little doubt to me that if you were doing the same thing over and over, you'd eventually get caught. There are plenty of stories of MS'ers being shut down. Happens all the time.

To me, not worth it, but to each their own.


The MS'ers are folks buying obvious cash equivalent cards (vanilla, Amex, etc). I could use a bus if I funded Serve, and get free withdrawals at an ATM if I wanted. Don't have Serve. Buying a domino's gift card is NOT MS. And why bother, if you get 5% back on rotating cards, and 3% or greater on regular cards? (Not to mention using to accumulate miles). I don't need to MS, but Safeway offers extra gas points to buy gift cards. I don't see an issue.

What you see is your own moral dilemma. That does not a truth make. :cool:


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Re: Buying gift cards with cash back/rewards CCs

Postby kdm31091 » Wed Jun 17, 2015 8:00 am

Secretlurker wrote:
CarefulBuilder14 wrote:
lobbythis wrote:If you did nothing but buy gift cards and/or prepaid credit cards all day, wouldn't that eventually raise flags? I'd imagine that they could review your account and see there's no way every time you shop for groceries you're spending exactly $100, $200, etc...nothing but even numbers. Maybe you could be hardcore and throw some random numbers on a card like $201.32, but that's a lot of effort.

Maybe I'm wrong or maybe you could just buy gift cards/prepaid cards all day and then add some food every time to make the numbers not look so suspicious.

My understanding is that nobody cares about optimized spend that ends in a real good or service. Buying a restaurant gift card in a grocery store wouldn't bother anyone, even in a $1,000 transaction (except for fears of identity theft, and charge-backs, maybe).

Isn't all the controversy about the cards that can result in a cash equivalent? Or does optimized spend (buying a restaurant gift card at a grocery store) actually bother issuers, too?


I believe this is the case. Have had no problems buying retail gift cards. But I don't buy a lot of them. If they are in the grocery store, and they want you to buy them, and you use them for pizza or something, what is the big deal?


I can see your point about the "store specific" gift cards or restaurant ones. They aren't really a big deal. It's still not something I do but it can't be converted back to cash so it really isn't "cheating the system".

The cash equivalent ones are definitely MS and can be converted back into cash. That said, I don't get it...you'd have to buy so many to overcome the fact that each has a $4.95 fee to activate. I just don't get what the gain is, unless you are spending literally thousands on this. Which will definitely raise your issuer's eyebrows. One big poster on MF has admitted he buys I think it was $30k a month in gift cards. First of all if you are able to afford that you are obviously wealthy and shouldn't need to MS anyway, but second of all, who has the time/energy to sit there and buy $30k a MONTH in gift cards and liquidate them? To each their own I guess

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Re: Buying gift cards with cash back/rewards CCs

Postby rockyrock » Wed Jun 17, 2015 8:56 am

Nixon wrote:It's not MS if you don't get caught.


Thats exactly what I expect to hear from someone with the username "Nixon" lmao :D
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Re: Buying gift cards with cash back/rewards CCs

Postby Nixon » Wed Jun 17, 2015 9:13 am

kdm31091 wrote:I can see your point about the "store specific" gift cards or restaurant ones. They aren't really a big deal. It's still not something I do but it can't be converted back to cash so it really isn't "cheating the system".

The cash equivalent ones are definitely MS and can be converted back into cash. That said, I don't get it...you'd have to buy so many to overcome the fact that each has a $4.95 fee to activate. I just don't get what the gain is, unless you are spending literally thousands on this. Which will definitely raise your issuer's eyebrows. One big poster on MF has admitted he buys I think it was $30k a month in gift cards. First of all if you are able to afford that you are obviously wealthy and shouldn't need to MS anyway, but second of all, who has the time/energy to sit there and buy $30k a MONTH in gift cards and liquidate them? To each their own I guess


Take it from someone who DOESN'T need to MS, but has dabbled in it to see how it works....

Those gift cards are simply a pain in the ass to liquidate. Only the ones with a PIN are a little easier as employee ATM's at my work incur no fee. But other than that. Pain in the ass.

I've got a small stack of $100 AGC's bought from Kroger on a promotion where they give you double your activation fee back in form of a store credit.
Saving them for xmas/bdays since I don't feel like trying to put my spend on them.
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CarefulBuilder14
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Re: Buying gift cards with cash back/rewards CCs

Postby CarefulBuilder14 » Thu Jun 18, 2015 1:46 pm

It just struck me that if I ever am about to fall short on minimum spend, buying a Costco Cash card online might be a reasonable solution.

So is an Amazon gift card, which had occurred to me before - I just buy more stuff at Costco.

I think a super-useful, yet store-specific card might be safer than any prepaid card that uses a major network.
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Re: Buying gift cards with cash back/rewards CCs

Postby yfan » Mon Jun 22, 2015 4:18 pm

Vermonster wrote:MS - Manufactured Spending

It is pretty much buying giftcards with a Grocery cash back card to use at other places. It sort of turns your 6% grocery BCP into a 6% "whatever you can get a gift card for." But again, you do so at your own risk. If a company finds out you're doing it, they could shut you down.

Generally, only Visa/MC/Amex/Discover gift cards are considered MS - which is to say the purchase of a cash equivalent. A gift card for a specific merchant is not a cash equivalent because its use is restricted to a single merchant and thus isn't MS.

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Re: Buying gift cards with cash back/rewards CCs

Postby whit » Wed Jun 24, 2015 8:41 pm

yfan wrote:
Vermonster wrote:MS - Manufactured Spending

It is pretty much buying giftcards with a Grocery cash back card to use at other places. It sort of turns your 6% grocery BCP into a 6% "whatever you can get a gift card for." But again, you do so at your own risk. If a company finds out you're doing it, they could shut you down.

Generally, only Visa/MC/Amex/Discover gift cards are considered MS - which is to say the purchase of a cash equivalent. A gift card for a specific merchant is not a cash equivalent because its use is restricted to a single merchant and thus isn't MS.


Not necessarily
Ms is if you can get cash back, say you buy $5 in gc and than get the $5 cash out of the gc (hypothetical since that's about what a gc costs to purchase)

You get cash back on the card swiped to buy it

Than that's cashback on something that you eventually turned back into cash anyways

If you kept it at a visa/mc/amex or discover gc that you spend--and have no ability to remove cash from it--you are not doing ms because material is being purchased, for the cashback on the cc that purchased the gc--it just transferred over yaknow?

There's also situations where you can do ms without having a gc involved and even better no fee but you won't be able to do it for a large amount (anything over a couple hundreds would raise red flag for the merchant that would be assisting you with this, *hint*hint*) and you won't be able to do it in multiples without getting banned since they do record your info when you do..its a pretty big department with stores throughout America

And, if we are talking about California, there is a reason why the stores here wouldn't let you take a merchandise credit and turn it into a gift card :) even if it's with one merchant and not a visa/discover/mc/amex

You can also do ms that way or altogether get $$$$$ for nothing

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Re: Buying gift cards with cash back/rewards CCs

Postby Gamma » Thu Jun 25, 2015 12:13 am

whit wrote:
yfan wrote:
Vermonster wrote:MS - Manufactured Spending

It is pretty much buying giftcards with a Grocery cash back card to use at other places. It sort of turns your 6% grocery BCP into a 6% "whatever you can get a gift card for." But again, you do so at your own risk. If a company finds out you're doing it, they could shut you down.

Generally, only Visa/MC/Amex/Discover gift cards are considered MS - which is to say the purchase of a cash equivalent. A gift card for a specific merchant is not a cash equivalent because its use is restricted to a single merchant and thus isn't MS.


Not necessarily
Ms is if you can get cashback, say you buy $5 in gc and than get the $5 cash out of the gc (hypothetical since that's about what a gc costs to purchase)

You get cash back on the card swiped to buy it

Than that's cashback on something that you eventually turned back into cash anyways

If you kept it at a visa/mc/amex or discover gc that you spend--and have no ability to remove cash from it--you are not doing ms because material is being purchased, for the cashback on the cc that purchased the gc--it just transferred over yaknow?

There's also situations where you can do ms without having a gc involved and even better no fee but you won't be able to do it for a large amount (anything over a couple hundreds would raise red flag for the merchant that would be assisting you with this, *hint*hint*) and you won't be able to do it in multiples without getting banned since they do record your info when you do..its a pretty big department with stores throughout America

And, if we are talking about California, there is a reason why the stores here wouldn't let you take a merchandise credit and turn it into a gift card :) even if it's with one merchant and not a visa/discover/mc/amex

You can also do ms that way or altogether get $$$$$ for nothing

I'm surprised this conversation is still going on. MS is indirectly purchasing cash with a credit card. Purchasing Visa/MasterCard gift cards gives one the ability to take cash out by using it to purchase a money order or using it to load a prepaid card (Prepaid RedCard for example.) Use that money obtained by purchasing with a credit card to pay back the credit card company then rinse and repeat. This is what I do with the old Amex Blue Cash card. Purchasing retail gift cards as some mentioned don't accomplish this. You buy it but won't be able to take cash out from it.

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Re: Buying gift cards with cash back/rewards CCs

Postby whit » Thu Jun 25, 2015 12:38 am

Gamma wrote:
whit wrote:
Not necessarily
Ms is if you can get cashback, say you buy $5 in gc and than get the $5 cash out of the gc (hypothetical since that's about what a gc costs to purchase)

You get cash back on the card swiped to buy it

Than that's cashback on something that you eventually turned back into cash anyways

If you kept it at a visa/mc/amex or discover gc that you spend--and have no ability to remove cash from it--you are not doing ms because material is being purchased, for the cashback on the cc that purchased the gc--it just transferred over yaknow?

There's also situations where you can do ms without having a gc involved and even better no fee but you won't be able to do it for a large amount (anything over a couple hundreds would raise red flag for the merchant that would be assisting you with this, *hint*hint*) and you won't be able to do it in multiples without getting banned since they do record your info when you do..its a pretty big department with stores throughout America

And, if we are talking about California, there is a reason why the stores here wouldn't let you take a merchandise credit and turn it into a gift card :) even if it's with one merchant and not a visa/discover/mc/amex

You can also do ms that way or altogether get $$$$$ for nothing

I'm surprised this conversation is still going on. MS is indirectly purchasing cash with a credit card. Purchasing Visa/MasterCard gift cards gives one the ability to take cash out by using it to purchase a money order or using it to load a prepaid card (Prepaid RedCard for example.) Use that money obtained by purchasing with a credit card to pay back the credit card company then rinse and repeat. This is what I do with the old Amex Blue Cash card. Purchasing retail gift cards as some mentioned don't accomplish this. You buy it but won't be able to take cash out from it.


Not sure why it's so surprising as it seems like a lot of folks ms, including yourself

I haven't done so yet but I thought money orders can only be purchased with cash or debit card via usps website..I know banks only take cash or withdrawal from that banks' account..unless western union lets you swipe the card

And preloading from gift card to a prepaid card? Why not just purchase prepaid cards directly instead of jumping through that hoop?

Just curious, as there seems to be better ways to make money without actually going through that MS and my apologies I had no idea you can take gift cards and use them to purchase money orders or use them to preload prepaid cards

I would have thought it the same as you not being able to purchase money orders on credit, or prepaid card on credit as its like paying a credit card bill with a credit card but I guess I'm wrong

I just know I avoid buying gift cards in general for others as gifts because there's a fee associated with it and usually the cashier makes me pay cash because they won't allow credit cards to purchase gift cards.

In any case, you're the expert, I just find the subject fascinating like folks that I know who resell products overseas because it's cheaper on mainland (eg Hawaii) or just because it's af in America versus af in Japan / Abercrombie and Fitch

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Re: Buying gift cards with cash back/rewards CCs

Postby CarefulBuilder14 » Thu Jun 25, 2015 1:10 am

Who else hates getting gift cards as gifts?

Some people seem to think of gift cards as more genteel than giving cash, but to me gift cards seem just as impersonal as cash, while far less convenient.

In fact, for the friends and family who know I'm a credit geek, getting a gift card is especially inappropriate because I can't use my card knowledge to get discounts.

Fortunately, I've had to deal with very few gift card gifts over the years, so the frequency of this irritation has been very low.
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