A legal riddle: what's the difference between avoiding and evading a reporting requirement?

For years, I’ve held what I think is the mainstream view in the travel hacking community:

• virtually everything travel hackers do is legal;

• so there’s no reason to conceal what you’re doing;

• and under some circumstances, trying to conceal what you’re doing may constitute a federal crime and ruin your life.

But I recently ran into a situation that has me somewhat baffled.

I want to comply with reporting requirements but Walmart won’t let me

As many readers know, Walmart recently started requiring cashiers to input data from a government ID for money order purchases over $1,000. This slowed down the process of liquidating high-denomination Visa debit cards, but since my stores only allow one transaction with up to 4 debit card swipes, it wasn’t the end of the world, just adding 2-3 minutes per day to my liquidation routine.

The other day, I ran into a different problem: after inputting all the information from my ID, the computer simply dumped the cashier back into her main screen, without allowing the purchase to proceed. No explanation was given, so I have no idea if this was a one-time glitch or if my information has been flagged for some reason.

However, purchases below $1,000 don’t require ID, so I’m still able to liquidate, for example, three $300 Visa debit cards or two $499 Visa debit cards.

Now you can start to see the problem: if a store has a reporting requirement, but does not allow you to fulfill the reporting requirement, does it constitute structuring to instead make transactions that don’t trigger the reporting requirement? In other words, if I’m avoiding triggering, rather than evading complying with, the reporting requirement?

You can imagine more clear-cut cases. Since even nearby Walmart stores can have vastly different store policies, you might have access to one store that allows 4 debit swipes per day, one that allows 2, and one that only allows 1 swipe. If you want to liquidate a stack of $500 debit cards, you could visit each store once per day, triggering the reporting requirement at two of the stores ($2,000 and $1,000 transactions) and not triggering it once (the $500 transaction). There would clearly be no problem in this situation since you’re in full compliance with each store’s policy on transaction limits and company policy on reporting requirements. I actually used to do something like this fairly regularly.

You can also imagine clear-cut cases of violations. If a store has a policy of only allowing one swipe per day, you might visit the same store once on your way to work to liquidate one $500 card, and the same store on your way home to liquidate another. In this case you’d obviously be exhibiting a pattern of behavior deliberately intended to evade both the store’s one-swipe policy and the company’s reporting requirements. Don’t do that.

But my case seems to fall right in between those two bright lines. If I’m in full compliance with store policy (using only 2 or 3 of my four allowed swipes), and company policy (reporting requirements are only triggered for transactions above $1,000), then is it legitimate or illegitimate to keep my transactions below the reporting requirement, with which I am more than happy to comply? In other words, I’m not trying to evade the reporting requirement, I’m trying to avoid triggering what is, for all I know, simply a bug in their reporting software.

Conclusion

Vinh at Miles per Day mused the other day that 2019 will see more people questioning their ethical lines and delving deeper into gray zones, and I suppose this is a version of that. Structuring is a bright line that I have no interest or willingness to cross, and that hasn’t changed. Rather, I’ve run into a new situation and I simply don’t know which side of that bright line it falls on.

All travel hackers are amateur lawyers, so I trust you’ll sound off in the comments.

An annoying (but probably good) change to Visa gift cards from Staples.com

Like most (all?) travel hackers, I consider flexible Chase Ultimate Rewards points to be the most valuable currency for hotels (World of Hyatt) and award tickets (United Mileage Plus and Southwest Rapid Rewards), and even find myself redeeming them for paid airfare periodically at 1.25 cents each through my Chase Ink Plus card.

That means it’s a no-brainer for me to spend $50,000 per cardmember year at office supply stores, to earn 250,000 Ultimate Rewards points. That’s not the only way I earn Ultimate Rewards points (I also have two Chase Freedom cards and a Freedom Unlimited), but it’s a commonsense way to make sure I have a steady stream of points coming in each month.

Staples.com Visa gift cards can no longer be activated by Blackhawk phone reps

While I stock up on prepaid debit cards at Staples and Office Depot during promotions, my city unfortunately only has one of each, and they quickly sell out, so I top up my spend with monthly purchases of $300 Visa gift cards from Staples.com.

Those cards are mailed unactivated and unusable, and for each order, a separate letter is mailed with activation codes that can be entered online or over the phone.

In my experience, those activation codes typically arrive a day or two after the physical cards, and Blackhawk has long offered a workaround if the activation codes are delayed: after verifying your identity, their phone reps were able to submit manual activation requests without the activation codes.

Sometime between the beginning of October (my last order) and this week, that process stopped working. You can still activate gift cards using their phone system, but only using the automated phone tree; there’s no longer an option to speak to a phone rep to request manual activation of cards (or anything else).

This is annoying, since I typically order 18 cards per month, and waiting for the activation codes to arrive and then manually activating them is a pretty tedious chore, especially since the website makes you complete a “captcha” for every single card you activate. I’ve spent so much time looking for traffic lights and bicycles I can’t tell them apart anymore.

The previous system was extremely vulnerable

While phone reps previously “verified” your identity before submitting activation requests, the information needed to verify your identity was delivered along with the physical gift cards: your name, mailing address, order number, and the last four digits of the cards themselves (depending on the phone rep).

That meant anyone who knew what was in the envelope (anyone who knows what Blackhawk sells) could steal the cards and call in to have them activated using only the information in the gift card package itself.

It’s possible this threat was finally realized, or that enough such thefts actually occurred, and that led Blackhawk to make the change. It’s also possible, and perhaps more likely, that they decided to lay off some of their call center workers and needed to reduce the number and type of calls they handled.

Conclusion: probably for the best

If you manufacture a lot of spend, wasting a day or three waiting for activation codes to arrive can feel like an eternity, and I was definitely frustrated trying to find a way to talk to a phone rep until I realized the option had been completely removed.

But the frustration of not being able to immediately liquidate cards pales in comparison to the frustration of trying to get your money back if one or more orders of gift cards were stolen and liquidated.

Having gift cards and activation codes arrive on separate days is a fairly primitive form of one-factor identification (you have to be able to check the mail at the same address on two separate days), but since the previous system was zero-factor identification, on balance I think the inconvenience isn’t worth complaining about too much.

On the other hand, if your activation codes never arrive, then the inability to speak with a phone rep to resolve the issue is going to get very annoying, very quickly.

Don't sleep on the next couple weeks of manufactured spend

There are a couple current and upcoming manufactured spend opportunities I want to make sure readers are aware of.

Office Depot/OfficeMax Visa gift card promotion through March 17

This promotion comes around every few months and is always a good opportunity to load up on Ultimate Rewards points for folks who have a Chase Ink Plus, Ink Bold, or Ink Cash small business card. The current iteration of the promotion is $10 off $300 or more in Visa gift cards.

If you buy two $200 Visa gift cards with $6.95 activation fees, you'll end up paying $3.90 in activation fees after the $10 discount is applied, or 0.2 cents per Ultimate Rewards point if you pay with a card earning 5 Ultimate Rewards points per dollar spent at office supply stores.

This is worth doing basically regardless of your liquidation method. Even paying Plastiq (you can find my personal referral link on the Support the Site! page) $4.88 per card in liquidation fees brings your cost per Ultimate Rewards point up to just 0.68 cents each — a good deal!

Grocery store gas points on Visa gift card purchases between March 16 and March 22

Slightly overlapping with the Office Depot promotion, via Miles to Memories I saw that Giant, Stop & Shop, and Martin's stores will offer 2 gas points per dollar spent on Visa gift cards between March 16 and March 22.

These stores usually don't offer any gas points on prepaid debit card purchases, so it's potentially lucrative to time your grocery store manufactured spend to periods when these promotions are in effect, if you drive and especially if you have a way of storing extra discounted fuel.

I don't drive but have mused in the past about options for distributing fuel points to folks who do (there are some more great suggestions in the comments to that post).

Ongoing Simon Mall discount and newish Walmart money order protocol

Just a couple quick notes today as we head into the holidays.

Two more days of discounted Simon Malls Visa gift cards

Through December 24, 2017, (some?) Simon Malls are selling their PIN-enabled Visa gift cards with a $2.95 activation fee instead of the usual $3.95. On an order of 19 cards, that's a savings of $19, which may or may not make them worth stocking up on, depending on your own liquidation bandwidth and tolerance for holding onto a lot of undrained cards. I had planned to get in one more order this week but ended up getting caught up in other projects so I was only able to take advantage of the promotion once.

New Walmart money order protocol

Two of my local Walmart stores have slowly and haltingly introduced a new protocol for selling money orders. It appears that Walmart customer service and money center terminals have two options for ringing up money orders.

What I'll call the "old" system involves ringing up the money orders individually, paying for them, then printing them one by one and inputting the last four digits of the money order's serial number as it comes out of the printer.

The "new" system involves ringing up the money orders through a different section of the point of sale terminal. After paying for them, the money orders print out together and the serial numbers don't need to be inputted. One additional receipt prints out with the money orders' serial numbers, along with a slip for the customer's signature. Money orders printed with the new system have "gift certificate" printed on their face, but are identical in every other respect.

I don't know why they've introduced the new system, but it doesn't appear to be anything to worry about for now.

Travel hacking with less manufactured spend

It seems that the travel hacking community has been thrown into one of its periodic panics, first over the loss of a popular gift card reselling opportunity and then an online bill payment option. I don't participate in such panics myself, but it's an opportunity to ask the question: what would travel hacking look like not in a world without manufactured spend, but in a world with less manufactured spend?

It's a good question because in a world with plentiful manufactured spend, lots of things are worth doing that might not be in a more constrained world. For example, today I happily earn 1.5 Ultimate Rewards points per dollar spent with a Chase Freedom Unlimited card, essentially speculating that I'll get more than 1.3 cents per point when I ultimately redeem them (since I could use a 2% cash back card instead). That wouldn't make any sense (for me) in a world where every dollar manufactured on one card reduces the amount I can manufacture on the others.

So, here's what I would do in a world of severely constrained — but not eliminated — manufactured spend.

Chase Ink Plus or Ink Cash for office supply stores

I consider buying $200 or $300 Visa prepaid debit cards from office supply stores with a Chase Ink Plus or, if you're signing up today, Ink Cash, to be the best current opportunity, even though liquidating smaller-denomination gift cards can be time-consuming if you have to do it in-person. Paying $8.95 in activation fees and $0.35 for money orders lets you buy 1,545 Ultimate Rewards for $9.35. That's slightly more expensive than paying $4.30 for 756 Ultimate Rewards points by using a Freedom Unlimited at an unbonused merchant, but it's over twice as efficient, in that a single money order transaction made with four $300 debit cards earns 6,180 Ultimate Rewards points (at 0.6 cents each), while one transaction with four $500 debit cards earns just 3,024 points (at 0.57 cents each). In a world of limited manufactured spend, maximizing the total haul from each transaction would inevitably become a much higher priority.

Since flexible Ultimate Rewards points can be redeemed for 1.25 cents each for paid travel, doing this alone would let you earn $3,125 in paid travel each year for about $1,504.

Annual spend: $25,000 (Ink Cash) or $50,000 (Ink Bold or Ink Plus).

"Old" Blue Cash for grocery stores

For reasons that are beyond my petty comprehension, American Express still issues the "old" Blue Cash card that earns 5% cash back on up to $43,500 in purchases at supermarkets, gas stations and "select" drugstores in the United States. That's a devaluation from the previous, unlimited bonus earning, but it's still a lot of money.

Since grocery store spend is somewhat cheaper than office supply store spend, whether you prefer to prioritize Ink Plus or Ink Cash spend or "old" Blue Cash spend properly depends on the value you expect to get from Ultimate Rewards points redemptions.

Annual spend: $50,000.

Amex EveryDay Preferred for grocery stores

I almost hesitate to include this one since the cap on earning is so low, but if you can knock out $6,000 in grocery store purchases, then make enough additional purchases to get to 30 transactions in the same statement cycle, you can earn 27,000 flexible Membership Rewards points per year (and pay an annual fee of $95).

That's not very many Membership Rewards points, so in a world of unlimited manufactured spend you'd want to supplement them with, for example, a Premier Rewards Gold card. But in a world of less manufactured spend, it would roughly add up to a business class international award ticket every 3-5 years. That's not great compared to the status quo, but it's not terrible either.

Annual spend: $6,000

A good cashback card for unbonused spend

So far so good, right? The problem is that all these cards are terrible for anything except manufactured spend. The Ink Cash and EveryDay Preferred have foreign transaction fees (the "old" Blue Cash card does not for some reason), and the Ink Bold and Ink Plus only earn 1 Ultimate Rewards point per dollar on unbonused spend.

Obviously if you have a lot of money the answer is the BankAmericard Travel Rewards with Platinum Honors Preferred Rewards, which earns 2.625% on all spend, has no foreign transaction fee, and is PIN-enabled for use internationally.

If you don't have a lot of money, you can use the PenFed Credit Union Power Cash Rewards card, which earns 1.5% cash back, or 2% if you have a PenFed Access America Checking Account. It's PIN-enabled and has no foreign transaction or annual fees, although the checking account requires a $500 average daily balance or monthly direct deposit to avoid a $10 monthly fee.

For domestic transactions you might consider using a Chase Freedom Unlimited to top up your Ultimate Rewards balance, but that card also has a foreign transaction fee so shouldn't be used internationally.

Conclusion

I think this is roughly the strategy I would pursue if my access to manufactured spend were suddenly constrained. It's pretty cheap (two $95 annual fees), pretty lucrative, and isn't very time-consuming, requiring only an average of about 6 total trips per month.

It would yield 125,000 or 250,000 Ultimate Rewards points, $2,240 in cash, and 27,000 Membership Rewards points. Whether or not that's sufficient to cover all your travel expenses depends on how many travel expenses you have, but it would certainly make a dent in mine.

Walmart Money Center debit limit problem solving; gone vacationing

I have never felt the impulse to constantly repeat, here on the blog, every manufactured spend technique that still works. People periodically send me e-mails or leave comments on ancient posts asking, "does this still work?" and my response is usually, "why wouldn't it?" After all, almost everything I know and do is contained here on the blog, and virtually everything else I know is included in my subscribers-only newsletters.

Still, even I occasionally wonder whether a given rule still applies or a given restriction has been loosened or tightened, and I had an experience the other day that provided a funny example.

The Walmart Money Center 4-debit limit

If you're a working travel hacker, grinding out your manufactured spend with money orders and bill payments, you know that Walmart point-of-sale systems will only accept four separate debit payments on a single transaction.

But do you really know that? I mean, if you are going to a Walmart with competent cashiers, making purchases with exactly 4 debit payments on each transaction, how would you know if a the point of sale system were updated to suddenly allow 8, 12, or 20 debit payments per transaction? They wouldn't tell the cashiers, since the cashiers have no reason to know. You'd have to find out for yourself.

Which, the other day, I did!

Walmart Money Center problem solving

In a typical Walmart money order purchase, you might ask for two $1,000 money orders, intending to pay $500 at a time on four PIN-enabled Visa or MasterCard debit cards. Since the amount debited from each card is manually entered by the cashier, that creates the possibility of the cashier manually entering the wrong amount.

In my case the other day, my cashier debited $50, rather than $500, from my first card. That left me with a $450 hole to fill. She offered to let me pay with the remaining balance of my debit card, but she didn't have any say in the matter: the point of sale system spit out a little slip refusing a fifth debit, after I'd paid the remaining $1,500 with my three remaining cards.

At this point, you have a few options. None of them is better or worse than the other, but you need to be ready, because if this happens to you your cashier is going to be very flummoxed and you need to know your options, depending on what they're they're prepared to do:

• Remove a money order from the transaction to square it up. This is technically the best option if the mistake is made on the first or second debit charge of your transaction. For example, if you have a $2,000 total money order purchase, and the first debit is accidentally made for $50, you can ask the cashier to remove the second $1,000 money order, make a $450 supplemental payment with your first (incorrectly debited) card, and then another $500 payment with a second card. You'll have completely paid for one money order. No harm, no foul.
• Remove a money order from the transaction to generate a refund. This is actually a variation of the situation most experienced travel hackers have run into, where the money order printer crashes and the store has to give you a refund in cash since they can't refund debit card transactions. If the erroneous debit takes place on the third or fourth debit, this may be your only option. You can either take a cash refund or, if your cashier is game, use it against the cost of the second money order (since most Walmart cashiers don't have that much cash in their drawers anyway).
• Finally, and this is only for folks who are sure about the competence of their cashiers, you can ask them to add a money order to the purchase in the amount of the mistake, before removing one of the original money orders. For example, if you intended to buy two $1,000 money orders with four $500 debits, but one of the debits was incorrectly entered at $50, you can ask the cashier to add a $550 money order, then remove one of the $1,000 money orders. That would bring your order to $1,550 — the amount you were ultimately able to pay with four debits.

I'm going to Europe!

This afternoon I'm flying to Munich to spend 10 days in France, Switzerland, and Germany. Don't burn the place down while I'm gone!

I guess this is a vacation so I don't expect to post more than once or twice next week, but I do plan to have sporadic internet access so follow me on Twitter for updates, pictures, and rants about how they do things over there, putting mayonnaise on their fries or whatever.

It's harder to know what's public and what's private these days

Since I started blogging, I've tried to maintain a pretty consistent ethic here with respect to specific opportunities, whether on the manufactured spend and earning side of the loyalty equation or the redemption side. My basic views can be summarized as:

• widely available and publicly advertised opportunities can and should be shared widely, even if it causes them to be ended prematurely;
• obvious mistakes and coding errors that give outsized value should be shared narrowly since they're guaranteed to end as soon as they become public.

The logic behind the first point is that the more people who are able to take advantage of a deal, the more overall savings people achieve, even if the deal ends earlier than it otherwise would. This is why I refer to my readers as "force multipliers:" one thousand people taking advantage of a deal for one day get more value than one hundred people taking advantage of it for a week.

The logic behind the second point is that if an obvious mistake or coding error is made public then it will be fixed before anyone at all is able to take advantage of it, reducing the total savings people receive.

One of the strongest feelings of revulsion I've felt towards affiliate bloggers came out of the only Frequent Traveler University I attended, when one of the speakers answered, in response to a question about esoteric Lifemiles redemptions, that "Most of us are trying not to talk too openly about it." He said this to an audience of paying attendees! That moment really clarified for me how affiliate bloggers feel about their readers — even their readers willing to pay to spend a weekend in Seattle just to hear them speak.

It's harder to know what's public and what's private than it used to be

When this blog started one of the functions I think people valued was scrolling through tons of pages on FlyerTalk, spotting potential opportunities, and then checking out whether they actually worked or not. Today, I find FlyerTalk almost useless and spend more time networking with other travel hackers, on Twitter, and flipping through blog headlines to see if there are underreported opportunities. This hasn't changed my overall ethic (don't kill vulnerable deals, but share resilient deals widely), but has given me a slightly different perspective on some issues.

For example, I've been publicly linking to this grocery store opportunity almost since it came out, but have shared the results of my own experiments only through my subscribers-only newsletter. For me, that's a way of splitting the difference between sharing a lucrative, publicly available and publicly advertised deal, and potentially ending opportunities to scale it.

On the other hand, when people mention an opportunity on Twitter, it's difficult to know just how "public" that makes the deal. Is a deal public when it's widely known, or just when it has breached some unknown barrier between the secret and the non-secret?

Is this a golden age of manufactured spend, or the twilight years?

I've made no secret of my view that much of the changing attitude of veteran travel hackers towards the landscape today can be explained by what I call "lifecycle" effects. What was nearly effortless for a single person at age 30 becomes almost unbearably difficult for a married mother of two at age 50. That's not because travel hacking has gotten harder, but because your increased responsibilities have made everything harder!

Countless deals have died in just the 3 or 4 years since I started travel hacking intensively. If you treat the set of opportunities that existed when you first got involved as the "perfect storm" of opportunities, then you'll only notice the deals that die and not the new deals that have emerged since then. And, of course, over the course of those years you'll have gotten older, busier, and crankier. That's a recipe for believing the best days are behind us.

But I've said it before and I'm sure to say it again: all the travel hackers I know are manufacturing more spend and getting more value than they have at any time since I got started! Meanwhile the travel hackers who are complaining about the lack of opportunities are those who are either located in unfortunately restrictive geographic areas or who are simply unwilling to take advantage of the opportunities available today.

Those opportunities may or may not be more time and resource intensive than the opportunities that existed in the past. But at least we don't have to haul dollar coins around all day.

Liquidating tiny-denomination prepaid debit cards

If you read yesterday's post and rushed out to buy up a slew of 5% Back Visa Simon Giftcards, and then triggered 5% cash back on each of them, you are probably feeling pretty good about yourself.

You're also probably realizing that you've got a drawer full of $25 Visa debit cards, and may need some suggestions for liquidating them. I'm here to help.

Buy gift credit

If there's a particular world-swallowing online merchant you do a lot of shopping with, you can simply use your $25 debit cards to reload your gift card balance.

This goes for any merchant where you have a consolidated or well-organized method of keeping track of gift credit — Uber and Starbucks spring to mind, with their beloved smartphone apps.

If you are buying gift credit at a merchant where you already reliably spend money, this is a good way to convert prepaid debit cards into cash savings, as long as your swollen gift card balance doesn't make you spend more money than you otherwise would have.

Pay bills

I don't personally have very many bills, but I'm assured by experts that most people have a great many bills. They might be:

• Phone;
• Internet;
• Cable;
• Walker (dog, cat);
• Insurance (homeowner's, renter's, car, health, dental, long-term care, yacht, RV, flood, drought);
• Utilities (electric, gas, hot water, cold water, lukewarm water, elevator, heating oil, cooling oil).

Some of them may accept debit card payments at face value. Even if you usually make these payments quarterly or annually, you may be able to prepay them and have the balance roll over from one billing cycle to another.

This is a basically excellent idea, but like buying gift credit, you will quickly run into problems when you're producing more $25 Visa debit cards than you need to cover even your most speculative bill payments.

Liquidate as usual

Of course, these are PIN-enabled Visa prepaid debit cards, so it's also perfectly possible to liquidate their (small) balances as usual: by buying money orders or making bill payments at any merchant that allows those services to be paid for with PIN-enabled debit cards.

The problem with this approach is that while it's likely to be the cheapest in out-of-pocket cost, it's likely to be the most expensive in opportunity cost, because the same trips could be used to liquidate higher-denomination (and more profitable) PIN-enabled debit cards instead. This is the issue I've referred to in the past as "liquidation bandwidth."

If your local merchants don't throttle payments, that may not be an issue for you: you can liquidate these tiny-denomination cards side-by-side with higher-denomination cards. But if you're limited to 4 debit card swipes, or a single swipe, then you'll likely be better off swiping a higher-denomination, rather than lower-denomination, card.

Pay up

It's not nearly as sexy as loading up a Starbucks card or settling a decade's worth of car insurance payments, but there are also ways to simply pay to liquidate small-denomination debit cards. You can pay many kinds of bills online using Plastiq at a cost of 2.5% (61 cents on a $24.39 payment).

If you enroll using my personal referral link you also earn "Fee-free dollars" which allow you to make eligible bill payments without paying any fees at all — I get 400 fee-free dollars (16 $25 cards!) and you get 200 fee-free dollars (8 $25 cards!).

Plastiq has one key advantage over other bill payment services for liquidating these tiny-denomination cards: it doesn't have a minimum fee. When liquidating high-denomination cards the objective is to have a low, flat fee. That's one reason online quarterly tax payments are popular — at least among self-employed bloggers who have to make online quarterly tax payments anyway!

On the other hand, when liquidating low- or tiny-denomination cards, it's much preferable to have a fixed percentage fee no matter how high it is.

Conclusion

The good news is that 5% Back gift cards are capable of producing almost pure profit, no matter how much you have to pay to liquidate their residual balances.

The bad news is that once you have a stack of cards with residual balances, you really should put in a little bit of time to figure out the cheapest, most efficient way of liquidating those balances back to cold hard cash.

My experience with free 5% Back Visa Simon Giftcards

A number of bloggers have mentioned some current promotions going on related to 5% Back Visa gift cards. One potential money-making approach is to buy $500 cards through GiftCardMall for $480.95 each. That is unfortunately limited by GiftCardMall's frequent and inexplicable flagging of large gift card orders.

Another current opportunity is purchasing 5% Back Visa Simon Giftcards in-person at Simon Malls locations. The cards are currently being sold with no activation fees at many, if not most, Simon Malls in the United States.

My local mall finally restocked today, so I headed down to find out whatever I could.

5% Back Visa Simon Giftcards really are free this week

You never know when this kind of promotion comes around what kind of limits or restrictions will be placed on purchases. At my Simon Mall, the guest services manager was happy to ring up my order exactly as usual, while waiving the activation fee. Most Simon Malls limit gift card purchases to a total order amount of $10,000, including activation fees. Since activation fees are waived I assume that means you would be able to purchase twenty 5% Back Visa Simon Giftcards for a total of $10,000.

The promotion runs through Sunday, December 11, 2016.

5% Back Visa Simon Giftcards are PIN-enabled as usual

The Visa gift cards sold at Simon Malls are issued by Metabank, with a default PIN of the last four digits of the card number. 5% Back Visa Simon Giftcards are no exception, and are fully functional Metabank PIN-enabled debit cards. My firm expectation is that merchants which don't accept Metabank PIN-enabled debit cards will not accept these either.

Debit purchases at CVS don't require the last four digits of the card number

There are a lot of CVS store locations in the United States. While the CVS point-of-sale terminals do not instruct cashiers to compare customers' identification with the name on their credit card, there are no doubt particular cashiers who, out of an abundance of caution, will try to compare the name on your card with the name on your identification documents.

However, when making a PIN-based purchase at CVS, the system does not prompt cashiers to enter the last four digits of the debit card's number, so there's no occasion for them to notice that your debit card doesn't have any name embossed on it, let alone your name.

Conclusion

I'm sure most of my readers with convenient access to Simon Mall locations have already begun experimenting with these cards, so won't find anything too groundbreaking here. On the other hand if you've been waiting to dive in until you were more confident that 5% Back Visa Simon Giftcards were as easy to liquidate as whichever products you're currently using, I hope this post is reassuring.

Even if you don't take advantage of the 5% Back feature of these cards (which can be cumbersome), this deal is just about as close to free as manufactured spend gets these days, and I have every intention of making the most of it.

Grocery store spend and the possibilities of loyalty-agnostic travel

I'm a big proponent of the US Bank Flexperks Travel Rewards card, since I think it provides the straightest path for most people to pay as little as possible for their airline tickets. With the recent return of PIN-enabled prepaid debit cards to many grocery stores, that view has been confirmed and even strengthened.

But it's also true that another favorite card of mine, the American Express Hilton HHonors Surpass card, also earns bonus points at grocery stores. And of course unbonused spend can earn between 2% and 2.625% cash back, and at lower cost than grocery store manufactured spend.

So I thought it would be useful to revisit some break-even points, or what I call imputed redemption values, for spend on a variety of cards, to help readers think through the best way to book their flights and hotel stays.

Three opportunities, three costs

The simplest way of approaching the tradeoffs between bonused grocery store spend and unbonused spend is to look at the cost per point. Using only the most widely available methods of manufacturing spend, you'd arrive at these simple calculations:

• US Bank Flexperks Travel Rewards, 2 Flexpoints per dollar spent at grocery stores: 0.62 cents per Flexpoint;
• Hilton HHonors Surpass American Express, 6 HHonors points per dollar spent at grocery stores: 0.21 cents per HHonors point;
• 2% cash back credit card at unbonused merchants: 0.43 cents per cent in cash back.

That final line allows us to have an anchor for the kind of value we should expect to get from Flexpoints and HHonors points that would make them competitive with unbonused cash back. For example, if you redeem Flexpoints for cash back you'll never come out ahead compared to a 2% cash back card, since you're paying 44% more for each Flexpoint, which are, like pennies, worth just a penny each.

The flip side of that calculus is that all Flexpoint airfare redemptions above 1.44 cents each are cheaper than paying cash for the same trip. For example, a $288 plane ticket would cost 20,000 Flexpoints, and $124 in out-of-pocket grocery store fees, while the same $288 plane ticket paid for with cash earned on unbonused spend with a 2% cash back credit card would cost $123 in fees. That means for all airline tickets between $289 and $399 (or any other price point that falls between a multiple of 10,000, 0.0144, and 0.2), the Flexpoint redemption is cheaper than the cash ticket.

Now let's do the same math with Hilton HHonors points earned at grocery stores with a Surpass card. Due to the difference in total price per point, compared to a 2% cash back card, Hilton HHonors points have to be redeemed not at 0.33 cents each, but rather at 0.49 cents each. For example, a 5,000 HHonors-point stay would cost $10.50 in fees, while $10.50 in fees would earn $24.42 in cash back — 0.49 cents per point. This is a purely mechanical calculation: a 95,000-point HHonors redemption would cost $199.50 in fees, while $199.50 in fees would earn $463.95 in cash back — 0.49 cents per point. That produces the simple maxim that stays which offer more than 0.49 cents per HHonors point are cheaper if paid for with HHonors points than with cash.

Flexpoints can also be used for hotel stays

There's one additional wrinkle worth mentioning here: Flexpoints can provide value on hotel stays that are too cheap for HHonors redemptions. I'll be the first to admit that this doesn't happen very often, but it's something to keep an eye out for: when Flexperks redemptions fall in the 1.44 to 1.5 cent per point band on hotel redemptions, they still entail a lower out-of-pocket cost than manufacturing the needed cash with unbonused spend on a 2% cash back card.

For example, a $144 stay (including taxes) would cost 10,000 Flexpoints ($62 in fees), and paying in cash earned with a 2% cash back card would require $62 in fees. Of course, it might be cheaper yet depending on the HHonors point rate available, if any.

This makes Flexpoints one of my favorite currencies to earn speculatively: if good flight opportunities present themselves, they can be redeemed for valuable flights; if middling hotel opportunities present themselves, they can be redeemed for middling hotels; and if no opportunities present themselves, they can be redeemed for cash.

While it's easy to posit a general principle that Flexpoints should be spent where they're most valuable — on paid airline redemptions — it's also true that they're more valuable redeemed for hotel stays than for cash, so if you find yourself in the situation of having to choose between spending precious cash or spending down a constantly growing balance of Flexpoints, you'll probably thank yourself later if you save the cash today.