Buying gift cards with cash back/rewards CCs

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

Postby Nixon » Fri Jan 29, 2016 1:59 pm

yfan wrote:
rockyrock wrote:I was in Ralph's earlier looking to buy a few GC's with my BCP and I was denied. They no longer take CC's to purchase GC's at any level. The manage said there was too much CC fraud and they were tired of taking chances. He said it's too easy to copy the mag strip and make a counterfeit card. I pointed to the EMV on the card and said it's much harder to dupe one of these...he didn't really care. Not that it's up to him, it's no doubt a (kroger) corporate policy.

Any one know of other supermarkets that have stopped taking CC's for GC purchase? I'll probably try to hit up Vons or Albertson's tomorrow. In the mean time, I ordered a few cards from raise.com. I know I got a better deal, but sometimes it isn't always about the best deal. Most of the times I buy GC's is on the way to a birthday party where I forgot to buy someone a gift.

I can still buy merchant specific gift cards from Costco and Safeway - though I don't really buy a lot, except to buy the PF Chang's GCs from Costco, which come at a 20%+ discount.

I think that merchants will eventually draw a distinction between Visa/MC/Amex gift cards and merchant specific ones, but until that happens, the trend may well be towards bunching them together and refusing to take credit for any of those.

I do see the fraud issue though. If you're a credit card thief, once you have got a stolen credit card, the first thing you want to do is is transfer as much money as possible into forms that cannot be recovered once the fraud is spotted and the card is shut down. Gift cards are a better bet there than buying a bunch of perishable items or merchandise you don't need and could get you in trouble if you try to sell (as that's basically selling stolen goods). Instead, you get retail gift cards and just spend from those when you want something.


Retail GC and V/MC can be tracked ultimately so this it isn't. It's reactionary. It would be beyond foolish to disallow purchase of retail/fixed GC's to cash only. Fixed value V/MC are an interesting case but ultimately are legitimately expensable from a business side as marketing or incentives..

Reloadable/Variable loads have certainly gone the way of the dodo for one looking to purchase them with credit as they function almost like a standard debit card and can be used to purchase M.O.'s....effectively recycling the money with minimal cost. The risk of potential money laundering or tax avoidance is there and is why this is even being pursued by retailers as the penalties go straight to the top. A CEO and their board of executives can actually be indicted for facilitation of bank fraud and or laundering for allowing such transactions to go unchecked.
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yfan
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Re: Buying gift cards with cash back/rewards CCs

Postby yfan » Fri Jan 29, 2016 3:19 pm

Nixon wrote:
yfan wrote:I do see the fraud issue though. If you're a credit card thief, once you have got a stolen credit card, the first thing you want to do is is transfer as much money as possible into forms that cannot be recovered once the fraud is spotted and the card is shut down. Gift cards are a better bet there than buying a bunch of perishable items or merchandise you don't need and could get you in trouble if you try to sell (as that's basically selling stolen goods). Instead, you get retail gift cards and just spend from those when you want something.


Retail GC and V/MC can be tracked ultimately so this it isn't. It's reactionary.

Whether it is "reactionary" or charge-backs on CC purchases of GCs was actually costing a given retailer too much money cannot really be determined without a detailed accounting of their books. In absence of that data, I'm inclined to accept the explanation that was actually given by the store.

"Can be tracked ultimately" doesn't mean it's not easier (in either the level of hassle sense or usability sense) to get away with. This is about whether it is tracked, not whether it can be, and if it is tracked, how quickly. Ultimately the goal of the thief is to move on and leave someone else with the bill. By the time it is tracked (IF it is tracked), they may have already used the gift card and moved on, leaving the retailer holding the bag if the bank funding the credit card takes away funds. Also, often the amount of resources it takes to track it down and find the person who stole it are not worth it, but the money it would cost them in reduced business for refusing to take credit cards for gift card purchases may well be.

It would be beyond foolish to disallow purchase of retail/fixed GC's to cash only.

Foolish for whom? I guarantee you that 99% of people who want to buy a store specific gift card from a retailer that isn't the store won't refuse to buy it just because the retailer selling the card won't take credit to fund it. As we credit card nerds often observe in dismay, a ton of people pay for everything with their debit cards to begin with. At least in the calculation of retailers who are doing it, the business they would lose by refusing to take credit for GCs is negligible - so negligible that they may even be able to make it up with the reduced fraud and not having to be out cash from their pockets when a credit card issuer does a charge-back.

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

Postby Gamma » Fri Jan 29, 2016 3:24 pm

kdm31091 wrote:
rockyrock wrote:
Nixon wrote:It's the banking laws more than anything.


Joe Schmoe Manager could give a fack less that there is CC fraud for the most part as that is between Corporate, the issuer, and the payment processor.

Joe is just following orders, His boss Stan just doesn't want to go to jail for facilitating money laundering on a grand scale. Understandable? Absolutely. Do I like it? Not too much.


How is buying a GC for Bed, Bath & Beyond money laundering? :confused:


I agree with you it seems stupid with the store specific GCs, but there's not much we can do about it. Just have to use cash or debit. I know we want the rewards, but evidently the merchants feel the risks outweigh the benefits of allowing CCs for purchasing them.

Like you said, there really isn't much we can do if they reject credit cards as form of payment. They also shouldn't state fraud as an excuse unless their terminals can't accept chip payments yet. If they do, they shouldn't care since they will not lose anything with the shift of liability law that passed last year.

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

Postby Nixon » Fri Jan 29, 2016 4:04 pm

Jealousy is an ugly trait.

It's not too late, yfan. Join the reward harvesters league. Spoil yourself a little.
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yfan
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Re: Buying gift cards with cash back/rewards CCs

Postby yfan » Fri Jan 29, 2016 4:12 pm

Nixon wrote:Jealousy is an ugly trait.

So is a "You're-Just-Jealous" attitude.

It's not too late, yfan. Join the reward harvesters league. Spoil yourself a little.

Well, I'm an only child so. :cool: ;)

But seriously, I have rewards cards - actually all but one of my credit cards are rewards cards. And I maximize my rewards to a pretty good extent.

In any case, trading personal credit stories over some hot chocolate between Nixon and Yfan is not really the point of this thread. To the extent that we ARE addressing the point of the thread, I think we've both stated our opinions. Level 3 reporting should solve the case of distinguishing between Visa GCs and store specific ones, but merchants may not be so cooperative on this. Ergo a bit of a hatchet rather than a scalpel.

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

Postby Nixon » Fri Jan 29, 2016 4:17 pm

Level three reporting data should only be available to counter terrorism units/national security matters.
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Tubpbs
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Re: Buying gift cards with cash back/rewards CCs

Postby Tubpbs » Fri Jan 29, 2016 5:48 pm

What is level 3 reporting?
Amex - BCP, Platinum, Business Gold
BoA - BankAmericard Cash Rewards
Chase - Freedom, CSP, RC, Ink Plus
Citi - DC, Prestige
Discover - It

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

Postby yfan » Fri Jan 29, 2016 5:55 pm

Tubpbs wrote:What the shit is level 3 reporting?

Basically, it's where the CC issuer actually gets info on what you purchased rather than where you bought it. That is, they can see whether you bought anything they'd consider cash equivalent, not just the store. A lot of corporate card reporting actually works this way (and it helps reduce their swipe fees), but consumer cards generally don't/

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

Postby Tubpbs » Fri Jan 29, 2016 6:36 pm

yfan wrote:
Tubpbs wrote:What the shit is level 3 reporting?

Basically, it's where the CC issuer actually gets info on what you purchased rather than where you bought it. That is, they can see whether you bought anything they'd consider cash equivalent, not just the store. A lot of corporate card reporting actually works this way (and it helps reduce their swipe fees), but consumer cards generally don't/


That's interesting. Seems like an invasion of privacy, but I guess the parameters that qualify for that have been lost for some time now...
Amex - BCP, Platinum, Business Gold
BoA - BankAmericard Cash Rewards
Chase - Freedom, CSP, RC, Ink Plus
Citi - DC, Prestige
Discover - It

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

Postby Nixon » Fri Jan 29, 2016 7:43 pm

Tubpbs wrote:
yfan wrote:
Tubpbs wrote:What the shit is level 3 reporting?

Basically, it's where the CC issuer actually gets info on what you purchased rather than where you bought it. That is, they can see whether you bought anything they'd consider cash equivalent, not just the store. A lot of corporate card reporting actually works this way (and it helps reduce their swipe fees), but consumer cards generally don't/


That's interesting. Seems like an invasion of privacy, but I guess the parameters that qualify for that have been lost for some time now...

Definitely privacy issues there.
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