Grocery store rewards datapoints at the end of a lucrative few weeks

The last few months have seen a more or less continuous stream of offers supercharging the value of grocery store manufactured spend:

• Between September 4 and 10 Green Dot cards earned 5 points per dollar at Giant/Martin’s/Stop and Shop;

• In quick succession Safeway offered $10 off $400 in Visa, MasterCard, and then again Visa gift cards;

• Then Giant stepped up and offered triple points on Visa gift cards, double points on MasterCard gift cards, and 10 points per dollar spent on Happy gift cards;

• And in the meantime, Safeway began offering 8 points per dollar spent on Happy gift cards (and unlike Safeway’s Visa and MasterCard offers, the coupon can be used an unlimited number of times on a single account).

Giant versus Safeway (1): Giant

Obviously a lot of people live in areas with convenient access only to Safeway or to Giant/Stop and Shop/Martin’s stores, so the decision of which offers to focus on has been made for them, but I do want to draw attention to a few important nuances for folks with access to both programs.

Giant’s program is the simplest, with points redeemable for either groceries or gas in 100 point increments, Each 100 points is worth $1 in groceries or a $0.10 per gallon discount on gas at participating service stations (i.e., worth $1 when filling a 10-gallon tank, $2 when filling a 20-gallon tank, etc).

Importantly, when redeeming points for grocery rewards, you do not need to redeem them or spend them in a single transaction, and you can make multiple redemptions in order to “fill up” your grocery rewards balance. As long as you shop at Giant at least every few months, this drastically reduces the risk of breakage, since you can fill up and spend down your grocery rewards balance however you choose.

Finally, there are three quirks of the Giant program that are worth being aware of:

• First, in my experience grocery rewards cannot be used to pay for alcohol (this presumably applies to tobacco products as well, though that’s just a guess);

• Second, they can’t be used to cover any taxes on the transaction. In my experience this creates the kind of bizarre situation where if you just buy fresh produce (untaxed here) then your grocery rewards can be used to cover your entire purchase, but if you throw in a pack of toilet paper (taxed here), you’re left owing some trivial amount on the transaction. Unless they’re getting a steep discount on interchange fees, it’s hard to imagine they’re paying Visa less than $0.20 on a $0.20 credit card charge. Obviously that’s not my problem, but it’s a reminder not to leave your wallet at home if you plan to purchase taxable items with grocery rewards. Your grocery rewards balance also can’t be used on gift cards.

• Third, purchases that are fully covered by grocery rewards do earn additional flexible rewards points. This isn’t normally a big deal since unless you’re a caterer or something you probably aren’t earning more than a dollar or two a month in rewards from your regular grocery spend. Nonetheless, Giant does periodically offer bonus point earning on the purchase of various items, and the fact that you can redeem grocery rewards while earning additional flexible points may over time modestly increase the overall return on your manufactured spend.

It sounds obvious because it is, but also remember that when Giant is offering bonus points on gift cards with activation fees, the fees themselves do not earn bonus points, while when they offer bonus points on gift cards without activation fees, like the recent Happy gift card promotion, the entire value of the card earns bonus points.

Safeway versus Giant (2): Safeway

I started with Giant because their program is simpler, but obviously there are some times when and some people for whom Safeway is the only game in town, so it’s worth doing a quick look at “just for U” as well, if only by way of comparison.

While Giant flexible rewards points can be converted directly into grocery rewards, Safeway adds an intermediate currency: each time you earn 100 just 4 U points, they’re converted into what they call “Rewards.” Your Rewards balance can be “passively” redeemed by using it at participating gas stations (as with Giant, 100 points/1 Reward is worth $0.10 off per gallon), or “actively” redeemed for groceries (the equivalent of Giant grocery rewards).

Here’s the finicky part: 1 Reward (100 just 4 U points) is not consistently worth $1 off groceries, which makes it slightly more complicated to directly compare Giant and Safeway promotions. Take, for example, the current Giant promotion for 10 flexible rewards points per dollar spent on Happy gift cards, and the current Safeway promotion for 8 just for U points per dollar spent on the same cards. We know the purchase of a $500 Happy gift card will earn 5,000 flexible rewards points, worth $50 off a future shopping trip, while the purchase of the same card at Safeway will earn just 4,000 just for U points, worth 40 Rewards.

Redeemed one at a time, those 40 Rewards could be used for $40 off a grocery bill. But Safeway allows the redemption of multiple Rewards at increased value: 7 Rewards can be redeemed for $10 off, meaning 35 rewards can be redeemed for the same $50 in groceries, and the remaining 5 redeemed for another $7. The Safeway promotion is actually slightly more lucrative at the margin, despite the lower earning rate!

Obviously promotions at the two chains don’t always overlap, so it’s not like you always have the choice between more and less lucrative versions of the same promo, but when they do, make sure you’re calculating your return properly.

Finally, a few more notes on Safeway’s program:

• Unlike Giant’s flexible rewards which allow you to flexibility build up and spend down a grocery rewards balance, Safeway Rewards redemptions are of the traditional coupon form of “$10 off your next purchase of $10 or more.” This is a time-honored method of encouraging customers to buy more than necessary in order to “make sure” their purchase triggers the coupon, but as long as you’re buying stuff you need at prices that are fair I don’t see any great harm in it.

• Safeway’s terms exclude using Rewards for the purchase of “all fluid items in the refrigerated dairy section—including fluid dairy substitutes,” and states that “[s]ales tax payments and redemption value deposits are not purchases and are not eligible to earn points.” While I’m sure the tax and bottle deposit terms are enforced, I do not believe the exclusion of refrigerated liquid dairy products is, although if anyone knows for sure feel free to leave your datapoints in the comments.

• Finally, Safeway Rewards can be redeemed for one-off free items. These are mostly generic or own-brand items (3 Rewards can be redeemed for a free 24-ounce “Signature Cafe Soup”) with value that mostly falls in line with the value when redeemed for groceries (the same 3 Rewards are worth $4 in groceries), but you might see some interesting high-value redemptions rotate through: 4 Rewards can be redeemed for $7 in the Meat Department, which gives a significantly higher value per Reward even than the maximum redemption of 7 Rewards for $10. But those high-value one-off redemptions are relatively rare, and maximizing your Rewards in multiples of 7 will typically be the most efficient way to redeem them.

Conclusion

Although I’ve jokingly referred to travel hacking over the years as a kind of extreme couponing, until this year I really never bothered to learn anything about the actual practice of couponing. Hell, I did most of my grocery shopping at places like Whole Foods that don’t even offer coupons!

But then we stopped traveling, and then I lost my job, and it turns out I was right all along: everything I ever learned about getting free travel applies equally well to getting free groceries!

On a more serious note, for folks who do have the ability to earn more in free groceries than they’ll ever want or need (while earning travel rewards on the side, of course), there are a lot of organizations, from food pantries to diaper banks, that are seeing more demand for their services than anytime since the Great Depression. In ordinary times those organizations benefit more from the cash donations they can use to buy deeply discounted goods from wholesalers, but most of them also accept in-kind donations, so it’s well worth considering calling around a few local organizations to see what they need most, and whether you can get it to them for free, whether it’s through Safeway, Giant, or whatever grocery store rewards program is operating near you.

Revisiting the Bumped App

Back in November, 2018, I wrote about a then-new app called Bumped which awarded fractional shares of stock when using linked credit cards at participating merchants. Over the last few weeks as I sorted through every bank, brokerage, and loyalty account to update my address, I discovered that Bumped not only survived, but I had also forgotten to unlink several of my credit cards and had accumulated a tidy stash of $10 or so in fractional shares.

In a comment to that original post, reader ABC pointed out some important limits on earning: $50 in rewards per purchase and $250 in rewards per brand, per year. Oddly, these limits are not disclosed in the current (May 2019) customer agreement. Instead, you can find them by clicking through to each brand in the “Loyalties” section of the app.

In any case, having essentially discovered $10 in change under the cushions, I thought I’d share some additional thoughts with my beloved readers.

Use Bumped for reimbursable expenses at pharmacies

Even if you have health insurance, you might still be on the hook for hundreds or thousands of dollars per year in pharmacy expenses. If you have a pre-tax flexible spending account at work, or a health savings account connected to a high deductible health plan, you may have the ability to pay for your prescriptions with your own credit card and then request reimbursement from the health plan.

Both CVS and Walgreens participate in Bumped, and offer a 1% payout (on all merchandise, not just pharmaceuticals), so this technique might allow you to receive your normal credit card rewards, an additional 1% in the form of company stock, and then pay for the charge with pre-tax money.

Use Bumped for deductible or reimbursable business expenses

The Kroger “family” of grocery stores, and Walmart and Target stores (classified as “superstores”), are also in the app at the 1% rewards level. While all three stores sell PIN-enabled prepaid debit cards, if you assume the folks at Bumped have an eye out for abusive behavior, you may still be visiting those stores to source toys for your reselling business, or produce for your catering company, or baked goods for office birthday parties.

The point is simply that when someone else is footing the bill (for reimbursable expenses) or subsidizing your expenses (for deductible expenses), then directing your spending towards merchants that offer you personal rewards is an easy way to come out (even further) ahead. Some Kroger and Walmart stores even sell gas at competitive prices, and Bumped may make it worth directing your reimbursable or deductible gas spending towards those stations.

Verizon Wireless, AT&T, and T-Mobile are also options at a 0.5% reward level, so if your employer reimburses you for some or all of your mobile or internet expenses, that’s another easy opportunity to come out ahead.

Use Bumped to steal from venture capitalists

One option that never would have occurred to me if it hadn’t been laid out explicitly in the customer agreement, is abusing returns. For example, by spending $5,000 at Walmart, you can earn the maximum $50 per-purchase quantity of Walmart stock. After executing this procedure 5 times, you could then sell the stock, withdraw the proceeds, and return the $25,000 in merchandise. The other obvious candidates are Sam’s Club and The Home Depot (where you need to spend $10,000 per transaction, given Home Depot’s lower earning rate of 0.5%).

I think this behavior would certainly get your account closed, and may result in them pursuing some kind of legal action against you. On the other hand, we’re talking about making off with a maximum of perhaps $1,000, which is so much lower than the cost of filing a lawsuit or arbitration claim it’s hard to imagine them trying very hard to get their money back.

It’s not for me, but I’m also not going to judge anybody who tries to pull off this little stunt.

Conclusion: what do you do with the stock?

Obviously if you’re making some kind of huge play on Bumped, whether because you despise venture capitalists or you just don’t think the company will be around much longer, then you should pull your money out as soon as possible. If you plan to continue using the program as intended, then I actually think you’re better off leaving the money in your companies’ shares.

This is for a very boring reason: since you receive your shares for free, they are (correctly) treated by Bumped’s brokerage house as having a “cost basis” of $0, and the entire amount of your sale proceeds is treated as a capital gain. This is not a big deal in terms of its tax burden, but it has the capacity to grossly complicate your life or that of your financial advisor or tax preparer, especially if you transacted in any of the same companies in your non-Bumped accounts. In other words, a savvy tax-loss harvest in one account can be offset by a thoughtless sale in another.

Within the Bumped app, dividends seem to be properly paid and reinvested, so as long as you’re earning anything less than $50-100 per year in rewards, I would simply let them ride. In 20, 30, or 50 years, you might be looking at a few thousand dollars, or you might be looking at $0, but at least the rewards were free and you didn’t cause yourself any unnecessary tax headaches in the meantime.

Two great, one good, and one marginal grocery store earning boost

By now you may have heard that starting May 1, 2020, Chase and American Express have enhanced the rate that several of their cards earn miles and points at grocery stores. I was notified by American Express by e-mail on May 1 (subject line “FQF, your Amex Card Member benefits just got better”), but I still haven’t actually received any official communication from Chase.

Here are the four most attractive offers I see, from the no-brainers to the tough call.

12 Hilton Honors points with Surpass and Aspire, plus a lifetime status angle

The American Express Surpass card usually earns 6 Hilton Honors points per dollar spent at grocery stores, and the Aspire card just an unbonused 3 points. Through July, both cards will earn 12 Honors points per dollar spent, with no maximum.

Hilton Honors points are worth about half a cent each, and normally cost about half a cent each when manufactured at grocery stores (since the same spend could be put on a card that earns 3% rewards). During this period, the card earns the equivalent of 6% cash back, which is essentially unheard of for an offer with no limit on the bonused amount.

Additionally, if your travel hacking strategy includes hitting the $15,000 spend threshold for a free weekend night with the Surpass card, or the $60,000 threshold for a second free weekend night with the Aspire, you obviously want to earn as many points as possible along the way, and the next 3 months are going to be a great opportunity to do so. American Express is also extending the expiration date of all certificates earned after May 1 and allowing them to be redeemed any night of the week.

Finally, I want to mention — without putting too much emphasis on it — that there’s a lifetime status angle here as well: all points earned with the Surpass and Aspire cards through December 31, 2020, will be treated as “base points.” Base points are a legacy feature of the Hilton Honors program from when it was a hotel loyalty scheme instead of a credit card loyalty scheme, and are (normally) earned only on your room rate and room charges. If you receive Diamond status by holding the Aspire card or by spending $40,000 on the Surpass, then you have probably never had any reason to think about base points.

The reason you might care about base points now is that Hilton has a “lifetime” elite status program: if you earn 2,000,000 base points, and maintain Diamond status for a total of 10 years (they don’t have to be consecutive), you are awarded “lifetime” Diamond elite status. For those with access to especially plentiful and socially-distanced grocery store spend, this is an opportunity to earn a phenomenal number of base points towards that 2-million-point goal.

If, like me, you believe every deal dies eventually, then you can treat lifetime Diamond status as a kind of long-term insurance policy: American Express can fire you as a customer, grocery stores can refuse to serve you, but Hilton will be stuck honoring your status for years to come.

If you do decide to pursue this angle, contact Hilton and ask them what your current lifetime base point total is and the number of years of Diamond status they’ve credited you with. I don’t know of any way to look up this information online (leave a comment if you do!).

3 and 5 Ultimate Rewards points with Chase Sapphire Preferred and Reserve

Over time every travel hacker should be diligently accumulating as many Chase Freedom cards as possible, which in the second quarter of 2020 are already earning 5 Ultimate Rewards points per dollar spent at grocery stores, on up to $1,500 per card in spend. I personally only have 2, but I know others have many more.

In May and June, 2020, Chase has increased the earning rate on their premium Sapphire Preferred and Reserve cards to 3 and 5 Ultimate Rewards points, respectively, on up to $1,500 per month in grocery store spend. That means after you’ve exhausted your quarterly Freedom bonus categories, you have another $3,000 in bonused grocery store spend to go.

Points earned with the Sapphire Reserve are worth a minimum of 1.5 cents each (when redeemed for paid travel), which makes the spend a no-brainer, but even if you only have the Sapphire Preferred I think the flexibility of Ultimate Rewards points, compared to the relative restrictiveness of Hilton points, suggests you should knock out your capped spend on these cards before going all-in on the Surpass or Aspire cards.

3 World of Hyatt points with Chase Hyatt cards

The two offers above are great, in the sense that my recommendation is: if you have the cards, take advantage of them. The Chase World of Hyatt earning boost is attractive, but doesn’t quite fall into that category: in May and June, 2020, you’ll earn 3 World of Hyatt points per dollar spent at grocery stores, on up to $1,500 per month in grocery store spend.

My perspective here is that if you plan to transfer 9,000 Ultimate Rewards points to Hyatt any time in the near future, these 9,000 World of Hyatt points should be valued the same as Ultimate Rewards points: every point you earn in World of Hyatt is a point you don’t have to transfer from Ultimate Rewards.

But whatever your plans and your level of confidence in those plans, you should almost certainly value World of Hyatt points “somewhat” less than Ultimate Rewards points, which is to say, maximize your Ultimate Rewards earnings first before turning to World of Hyatt.

4 Delta SkyMiles with American Express consumer credit cards

I no longer have an American Express Delta co-branded consumer credit card, having swapped my personal Delta Platinum card out for the business version several years ago (a card I’m planning to cancel, if the increased $250 annual fee ever hits). That means I’m not personally affected by American Express raising the earning rate on consumer cards to 4 Delta SkyMiles per dollar spent at grocery stores through July, 2020.

Let me get the obvious out of the way first: if you value and chase elite status with Delta through the Medallion Qualification Dollar waiver (spending $25,000 per calendar year) and Status Boost (bonus Medallion Qualification Miles when spending $25,000 or $30,000 on the Platinum and Reserve cards, respectively), then you should certainly try to earn as many redeemable miles as possible while doing so! A high, uncapped earning rate at grocery stores makes the next few months a great opportunity to sprint towards those goals.

Likewise, if Delta American Express consumer cards are the only cards you have featuring enhanced earning at grocery stores, they’re the only ones you can use: play the hand you’ve dealt yourself.

But as much as I enjoy the experience of flying on Delta, there’s no escaping the fact that SkyMiles are simply hard to use for high-value redemptions, and I hesitate to value them at more than 1 cent each (their value when used on “Pay with Miles” redemptions). The risk of unredeemed balances, or low-value redemptions, is much higher even than with a program like Hilton, where even break-even redemptions come with a 5th night free, for instance.

That’s what makes this earning boost a “marginal” play: a 4% earning rate in normal circumstances would be great, especially with the potential of accelerated elite status with a good airline. But given the other possibilities available, I would turn to Delta only after meeting Chase’s earning caps and satisfying my need for Hilton points.

Bonus tip: free manufactured spend at Safeway & Co.

I’d been noodling this post for a day or two when I saw Doctor of Credit share a new Safeway deal for $10 off $100 in MasterCard gift cards. The discount reduces the cost of each card below face value, making it a great opportunity to score some early wins this month.

The offer runs through May 16, 2020, but in my experience these offers must be added to your Safeway accounts during the week they launch (after which they remain linked until expiry).

So, get cracking!

Travel hacking during the plague

I know my gentle readers have a lot on their minds these days, but so does everybody else. That makes the current crisis as good a time as any to step back and see if there are any unusual opportunities to deploy your very specific set of skills.

What to do with existing miles and points balances

This is the easy part. Since you already have the miles and points in your account, you should already be looking for opportunities to strategically redeem them, and those opportunities are now everywhere. Even with reduced flight frequencies as the airlines go into shutdown mode, there are thousands of unsold seats airlines are trying to remainder off by opening up award availability. To take as an example the first route I looked at, non-stop economy and premium cabin award space is wide open between Washington, DC, and Munich during Oktoberfest.

Remember: you don’t need to plan on taking any flights you book. If the crisis hasn’t abated by the time your travel dates come around, the flights will be canceled and you’ll be refunded. If the airline goes under, your miles won’t be any good anyway. The point is, as always, to redeem the miles and points you have for the trips you want to take. The fact that it’s hard to imagine what the world will look like 3, 6, or 9 months from now shouldn’t stop you from jumping on the opportunities that are available here and now.

The same goes for hotel reservations. For example, a casual check revealed 5-night award availability over New Years at the Grand Wailea, A Waldorf Astoria Resort. As above, you don’t need to actually intend to take the trip, but you should certainly take advantage of increased award availability now, while paid bookings are non-existent.

What to earn now

Your existing miles and points balances are a “sunk cost,” and you need to set them aside when considering what to earn now, unless you’re very close to redeeming one of the newly-available awards mentioned above. The last thing you want to do is chase award availability that’s gone by the time you earn enough points. Redeem your existing balance if you can, and forget about them if you can’t. If you don’t anticipate traveling, or even booking travel, for at least three months, you should pivot hard to cash back.

Fortunately, we’re in a great spot for earning cashback. Discover it cards will still earn 5% cashback at grocery stores for the next few days, and then you can pivot to Chase Freedom cards to earn 5 Ultimate Rewards points per dollar (in both cases on up to $1,500 in spending per card). Safeway, Meijer, and Giant are all running promotions on PIN-enabled prepaid debit card purchases (either in the form of immediate rebates or gas discounts) so this is as good a time as it gets to hammer out those rewards.

What about transferrable points?

So far, so good: if you have points, redeem them for refundable reservations while award availability is wide open. But what about your points balances which can be transferred in only one direction, like Chase Ultimate Rewards and American Express Membership Rewards points?

With these points, it’s necessary to think probabilistically. This is true all the time, but it’s especially true when we’re facing this level of uncertainty.

Once you’ve transferred a point from your flexible points currency to a given program, there are three possible outcomes: you’ll redeem it for a high value (expensive flight, premium cabin), you’ll redeem it for a low value (cheap flight, economy cabin), or you won’t redeem it at all (expiration, bankruptcy).

The same is true if you don’t transfer the point: you can redeem it for a high value (1.5 cents per point with a Chase Sapphire Reserve, for instance), or a low value (1 cent per point in cash, for example).

It’s common to ask the question, should you speculatively transfer points during promotions that award bonuses on inbound transfers? This is a version of the same question: should you speculatively transfer points to book awards you aren’t certain you’ll use just because award availability is wide open?

Manufactured spend, reselling, portal cashback

Two things are true: the present moment is characterized by unusually high risk and uncertainty. Many businesses, large and small, will survive the calamity. Many businesses, large and small, will not. That naturally creates an elevated level of uncertainty in otherwise-calm markets.

Metabank seems to do a pretty good job of manufacturing and distributing prepaid debit cards under normal conditions, but I don’t know whether they have enough cash on hand, or access to federal bailout money, to survive a total shutdown of economic activity.

Likewise most of the cashback portals seem to have low overhead and predictable cash flow. But if online spending shuts down for the next three months, where is their cash flow going to come from? Without it, how are customer cashback payouts going to be funded?

One response to these conditions is to scale back your activities to reduce your personal exposure to these vulnerabilities. That’s a good, natural response and no one will ask questions if you say you took the second quarter of 2020 off to see how things shook out.

But I’ve been around long enough to know that some people are going to be scaling way up, in order to take advantage of huge discounts today to reap outsized profits tomorrow. That’s not for me — I’m a small fish in a very, very large pond, but the folks who pull it off are going to be bragging about it on Twitter, or whatever the post-plague version of Twitter is, for the next 30 years.

Replacing a (potentially) compromised Visa prepaid debit card

If you play this game long enough, you guaranteed to see everything eventually. In many ways, I think travel hackers have a better view into the guts of the US financial system than the people who designed it, because we get to see it from every angle.

There have been lots of report of compromised MasterCard gift cards over the years, typically taking the form of packaging that has been opened and resealed after the card’s data has been swiped. I still haven’t encountered that one, but during the recent Safeway promotion for $15 off two $100 Visa gift cards (a classic negative-cost opportunity to manufacture spend), I ran into what I suspect was a compromised Visa card.

Stuck packaging, missing CVV2, dead magnetic strip

My hackles were first raised when trying to open the card’s packaging, and found it was much harder to open than usual — remember I’d been loading up on these cards for several days, so had a good sense of how easy they typically are to open. This was annoying, but not alarming, since I’ve encountered multiple versions of these cards, so I assumed that I had happened to grab either an earlier or newer generation off the shelf.

Once I’d cracked it open, more or less shredding the original packaging, I immediately noticed that only the last digit of the security code on the back was visible. The obvious problem here was that it meant I was unable to check the card’s balance online, since the website requires you to enter all three digits. Now I was not just annoyed, but worried.

In principle to liquidate the card all I needed were the last four digits on the front of the card, which work as the card’s PIN at money order retailers. Nevertheless, out of an abundance of caution, I used my home credit card reader to see if the card itself had been tampered with, and discovered that the magnetic strip was completely dead.

I want to stress, despite these three clues, I have no proof that the card was actually tampered with in any way. Old packaging, sticky glue dots on the card’s backside, and improper handling could easily explain all three of the issues I saw. Nevertheless, I needed a replacement.

Metabank mailed me one for free

To request a replacement, I called the number on the back of the card and eventually navigated my way to a customer service representative. I explained the situation to him and he asked for the long string of digits above the card’s bar code. Using that information, he told me that the card’s value was still in place. Since I knew (but didn’t tell him) that the card had also been demagnetized, I insisted on a replacement.

I placed the call on the 18th and was assured the replacement card would arrive within 7-10 days. I actually received it on the 24th, just 6 days after my call.

Conclusion

In my case, requesting a replacement was easy since the card’s value hadn’t been used yet, and I want to stress, I do not know whether it was maliciously compromised or simply defective. Nonetheless, I want to make readers aware that if you run into a similar situation, resolving it is relatively painless, as long as you act quickly after discovering the problem. Had the card’s value already been drained, I presume the process would have been substantially more complicated and time-consuming.

Manufactured spend with and without promotions and bonuses

On my way to the store the other day I realized that we hadn’t seen a really good grocery store promotion in a while. The beginning of December featured a Safeway deal for $10 off $100 in Visa gift cards, and Giant offered gas points on Visa gift cards during a similar period, but it’s been a slow couple months since then.

It occurred to me that it might be useful to write up a list of the most common promotions we see come up repeatedly, and why they’re worth watching for. These aren’t secrets, in fact the public travel hacking blogosphere and Twitter typically blow up each time they come around, but rather a sort of index of the most valuable promotions so less-experienced folks might learn what to watch for.

Grocery Stores

Grocery stores are one of the most widely, albeit not universally, available merchants for manufactured spend, since they’re present in most larger communities and typically sell one or more brand of PIN-enabled prepaid debit cards.

Without promotions, manufacturing grocery store spend depends in large part on the cards you have available. I think of grocery store spend as giving me “about” a 50% discount off paid travel, with the US Bank Flexperks Travel Rewards earning 2 Flexpoints per dollar (worth 1.5 cents each), and the American Express Hilton Surpass earning 6 Honors points per dollar (worth “about” 0.5 cents each, albeit with the possibility of much higher value redemptions at top-tier properties and on 5-night award stays). The American Express EveryDay Preferred and Gold cards offer 4.5 and 4 Membership Rewards points per dollar, respectively, although with certain additional restrictions (I do not currently carry either card).

That’s a solid core savings on paid travel, and these days it represents the majority of my day-to-day manufactured spend.

During promotions, grocery store manufactured spend can be profitable even if you don’t hold those cards (and even more profitable if you do). The three main types of grocery store promotions are cash discounts, grocery discounts, and gas discounts.

A cash discount is the best form any promotion can take, and you should always be on the lookout for them. Here are some recent examples, and what to watch for:

• Safeway: $10 off $100 in prepaid debit cards. For all such promotions, always pay attention to whether the terms apply to “$100 gift cards” or to “$100 in gift cards.” The former language may mean the promotion requires you to buy lower-denomination, fixed-value cards, while the latter language means you can apply the promotion to higher-denomination, variable-value cards. The “good” version of this promotion was available in September (Visa), October (MasterCard), and November (Visa and MasterCard) of last year. An example of the “bad” version was offered in September on MasterCard gift cards.

• Giant Eagle: $10 off $100 or $150 in prepaid debit cards. This deal was offered in June and November (Visa) of last year, and in December of 2018 (MasterCard).

A grocery discount is a promotion that requires you to buy “something” in addition to a prepaid debit card in order to realize your savings. It’s not quite as valuable as a cash discount, because it virtually guarantees “breakage:” buying items in excess of the required amount in order to trigger the discount. If a promotion gives $15 off $15 in grocery purchases, you’re likely to grab items costing $16 or $17 in order to make sure you’re over the threshold to trigger the discount. Some recent examples:

• Giant: $15 off $15 in groceries when you buy $250 or more in Visa gift cards (June) and $10 off $10 in groceries when you buy $100 in Visa gift cards (July).

• Hy-Vee: $10 Hy-Vee gift card when you spend $125 on Visa gift cards (December, 2016). This form of promotion is actually slightly more flexible than a grocery discount since Hy-Vee gift cards can be spent on a wider range of items.

The final form of grocery store promotion, gas discounts, is the least valuable. I don’t say that because I don’t own a car, but rather because unless you literally drive for a living it’s virtually impossible to redeem as many gas points as you can earn during a single week’s promotion.

Take for example a typical promotion offering 3 fuel points per dollar spend on Visa gift cards at Giant. The first $500 Visa gift card you buy earns you $1.50 per gallon off your next tank of gas, worth $15 on a 10-gallon tank of gas, or $30 on a 20-gallon tank of gas. That’s a good deal, better even than the fixed cash or grocery discounts discussed above.

The trouble is, unlike cash or groceries (at least the canned, paper, and cleaning goods I typically buy), gas points both expire and are worth less, the more of them you earn. Filling up a 20-gallon tank twice in a month might be reasonable. Filling it up 4 times in a month is possible if your commute is long enough and your fuel efficiency low enough. But at that point you’ve only accounted for four $500 prepaid debit cards, $2,000 in spend, and perhaps $60 in credit card rewards. That lack of scalability is why I consider gas promotions to be the lowest-value grocery store promotions.

Office Supply Stores

Like grocery store manufactured spend, office supply store manufactured spend has the feature of being worthwhile all the time on cards that bonus office supply store spend, but much more broadly profitable during periodic promotions.

Without promotions, someone with a Chase ink Plus, Bold, or Cash card can simply buy $300 Visa gift cards from Staples.com, paying an $8.95 shipping fee and earning 1,545 Ultimate Rewards points per card. At 1.25 cents per point this is again a minimum discount of “about” 50% off paid travel booked through the Ultimate Rewards portal, with an even higher discount if you also carry the Chase Sapphire Reserve and redeem points for 1.5 cents each.

But during promotions, even unbonused office supply store spend may be worthwhile. When Staples waives activation fees on Visa or MasterCard gift cards, your only cost is your time and liquidation fees. Earning 300 Ultimate Rewards points with a Chase Freedom Unlimited while paying $1 in liquidation fees sounds to me like a good deal. At that point, the question simply comes down to whether or not you can scale the deal.

Likewise, when Office Depot and OfficeMax offer $15 off $300 in gift cards, as they did in December, it doesn’t really matter what credit card you use to earn rewards, since you’re virtually guaranteed to come out ahead no matter what.

Conclusion: promoted, unpromoted, or unbonused?

There are, of course, unbonused manufactured spend opportunities available year-round, like the Vanilla prepaid debit cards available at many drug stores, the Metabank cards available at Simon Mall locations, or the lower-denomination fixed-value cards available at stores like Bed Bath & Beyond.

The interesting question is: what is going to make you spring into action? if you’re grinding it out, manufacturing spend all day every day, then any given promotion on any given day is just icing on the cake, perhaps encouraging you to free up some credit limit headroom to maximize it on your most valuable credit cards, but nothing more.

On the other hand, even if your time is too valuable to justify manufacturing spend on a day-to-day basis, there may be promotions that come around every month, quarter, or year that motivate you to wring every last dollar, roll of toilet paper, or tank of gas out of them.

The calculation is up to you, but hopefully the suggestions above help get you on the right track.

Travel hacking in weak periods of manufactured spend

Sometimes it feels like the travel hacking community only has two speeds: greed and panic. It’s always either the golden age of manufactured spend or its funeral. Worse yet, it’s people who have been playing the game the longest that are most prone to these mood swings, even though they should have enough experience to know better!

The unfortunate fact is, if you aren’t able to stay involved in the community through periods of weak opportunity, you’re not going to be around when periods of peak opportunity return. With that in mind, I thought I’d give a little pep talk and share some strategies for surviving through the lean times.

Clean up your credit card portfolio

This is always good advice, but it’s especially good advice in periods of limited opportunity. American Express recently announced they were breaking their Delta Platinum co-branded credits cards by increasing the annual fee to $250 and ending the bonus redeemable miles earned when you meet the $25,000 and $50,000 spend thresholds. In periods of peak opportunity, those changes might be negligible, while in periods of weak opportunity they have turned the card into a $250 companion ticket that doesn’t even include their entire route network, so I’ll be cancelling when my next annual fee is due.

Pivot to signup bonuses and annual benefits

If manufactured spend is going to play a smaller role in your travel hacking strategy, then logically signup bonuses and recurring benefits should take on a larger role.

Chase World of Hyatt credit cards aren’t very useful for manufactured spend (unless you’re spending your way to Globalist status), but offer a free Category 1–4 Hyatt night each year, which is almost certain to cover the card’s $95 annual fee, and currently give up to 50,000 bonus points on $6,000 in spend.

Likewise the Bank of America Alaska Airlines credit cards aren’t very attractive in periods of unlimited manufactured spend, but their annual companion tickets are extremely valuable; why not pick one or more up while times are slow?

Focus on one or two goals

When opportunities are plentiful, just about everything becomes worthwhile: hotel points, airline miles, cashback, chasing status, mileage running, reselling. When times are lean, you can focus on a few concrete goals.

A 5-night award stay at a top-tier Hilton property costs 380,000 Hilton Honors points, or roughly $64,000 in grocery store spending on an American Express Surpass card. If your liquidation options are limited, that may be all the manufactured spend you can do in a year — but you still get a 5-night award stay at a top-tier Hilton property! A quick glance at winter holiday rates at the Grand Wailea, A Waldorf Astoria Resort, suggests a cash price of about $11,000. I’m not going to pay that much for a 5-night stay — but $64,000 in manufactured spend is well within the realm of possibility.

I don’t fly Southwest, but it’s easy to imagine those who do finding it worthwhile to spend $120,000 per year on their co-branded credit cards in order to earn a companion pass. That works out to $10,000 per month, or roughly $1,000 every 3 days. In times of peak opportunity, that might be a rounding error, but even when times are lean it’s easily manageable if it’s your only goal.

Get creative

Everybody has opportunities they know about but don’t pursue because during fat years, the juice doesn’t seem worth the squeeze. There’s nothing wrong with that: most people pursue the techniques that are most interesting and rewarding for them. You may not like buying and depositing money orders, but love tracking gift cards in a spreadsheet for resale. We’re different, and that’s great.

But when your favorite liquidation avenues close, you may find that you have the time (and need) to at least explore those other options. Maybe gift card reselling isn’t at much work as you think it is. Maybe your office supply stores are better stocked than you thought. Maybe specialized gift cards are easier to liquidate than you expected.

Conclusion

In my experience, most people get into travel hacking through one big discovery. For me, it was finding out that Kiva loans triggered the “charitable contribution” bonus on the US Bank Flexperks Travel Rewards card., which meant I was earning up to 6% in travel rewards on short-term loans.

And likewise, most people fall out of travel hacking when their one big discovery ends, as all deals eventually do. If you cut your teeth buying coins, then money orders seem like a pale imitation. If you started with Tio payments, then it’s hard to get excited about Plastiq payments. And if you flew around the world with Plastiq payments, the next deal isn’t going to seem very exciting.

There’s nothing wrong with that, and nobody is obliged to keep travel hacking after the hobby loses their interest. But let’s not pretend it’s travel hacking that quit; it was you.

Microhacking fixed-value prepaid debit cards: when is it worth it?

Long-time readers know that for many years my main method of prepaid debit card liquidation was through Walmart money orders, which typically allowed me to liquidate $2,000 in debit cards per trip, and if the cashier was in the right mood, potentially even more than that. The game is always changing, and that avenue has lost most of its interest for me in the last few months: having a blocked ID meant making smaller transactions, if I was able to liquidate anything at all. What makes sense at one success rate and volume makes less sense under different conditions, and that’s fine (if regrettable).

The key advantage of Walmart money orders was volume. Even total costs as high as a penny per point might conceivably be worth paying if you can buy enough miles and points at that rate: $1,600 for a round-trip flight to Europe or Asia in business class is a pretty good deal, after all (with economy even cheaper).

With that liquidation opportunity in my past, I naturally got to thinking about other opportunities, and when and whether they’re worth pursuing.

Office supply stores

Office Depot/OfficeMax and Staples both regularly run promotions on Visa and MasterCard prepaid debit cards. The OD/OM promotions typically offer $10 or $15 off $300 or more in gift card purchases, and the Staples promotions usually waive the activation fee, which amounts to the same thing within a dollar or two. If you have a legacy Chase Ink Plus/Bold or Ink Cash card, these promotions are always worth emptying out the shelves of your local stores for: 5 Ultimate Rewards points per dollar are worth at least 5% cash back and potentially much more than that if transferred to a high-value travel partner.

The current promotion is for $15 off $300 in Visa purchases, though the only store in my area was wiped out on the first day.

Grocery store fixed-value cards

For the last week I’ve been taking advantage of Safeway’s promotion for $10 off fixed-value prepaid MasterCard debit cards, which brings the total price of a $100 gift card down to $95.95 (after the $5.95 activation fee). This is a good opportunity to illustrate the value of volume:

• purchasing a $100 prepaid card for $95.95 using a credit card that earns 3% in rewards at grocery stores yields a profit of $6.93 before liquidation.

• purchasing a $1000 prepaid card for $1003.95 using a credit card that earns 2% in rewards yields a profit of $16.13 before liquidation.

Mechanically, paying full price for a higher value card yields more profit than paying a discounted price for a lower value card.

In general, I don’t try to put a value on the time I spend manufacturing spend. After all, I like getting out of the house and going for walks, so it would seem strange to “bill” myself for the time I spend doing something I enjoy.

It’s equally true that if the same time can be spent doing something more profitable, rather than less profitable, it would be more profitable to do that instead! That brings us to another interesting question.

Grocery store variable-value cards

Grocery stores also sometimes offer discounts on variable-value cards, and when they do it’s almost always worth maximizing the value of those promotions, whether it takes the form of gas points or grocery discounts.

The interesting thing is that depending on your liquidation costs, it may still be more profitable to buy unbonused variable-value cards than discounted fixed-value cards. Using the same logic as above:

• purchasing a $100 prepaid card for $95.95 using a credit card that earns 3% in rewards at grocery stores yields a profit of $6.93 before liquidation.

• purchasing a $500 prepaid card for $505.95 using the same credit card yields a profit of $9.23 before liquidation.

Consequently, if your liquidation costs are low and fixed for each card, you’re better off buying the more expensive, high value card. If your liquidation costs are high and variable, the discounted, lower-value card may be more profitable.

Conclusion

These three examples aren’t meant to be comprehensive, but rather to spell out the logic I use when deciding which opportunities are worth pursuing. Travel hacking is not just intensely localized, it’s also intensely personalized: the opportunities I have available aren’t the same ones you do, not just because we live in different regions of the country, but because we have different abilities and responsibilities. A person with limited mobility may need to do as much volume as possible in as few trips as possible, while a traveling salesman may have the opportunity to visit dozens of different stores per day.

And to me, that’s not just fine, it’s great! If we didn’t know different things, we wouldn’t have anything to learn from each other.

Two current and upcoming bonused manufactured spend opportunities

Today I want to flag a couple manufactured spend opportunities to make sure readers are aware of them.

$15 off $300 in Office Depot/OfficeMax MasterCard gift cards

Through August 24, 2019, automatically receive $15 off purchases of $300 or more in MasterCard gift cards at OfficeDepot and OfficeMax store locations. $200 fixed-value MasterCard gift cards have an activation fee of $6.95, so the purchase of two $200 cards comes to a total of $398.90. I’ve seen reports that the credit is only applied once per transaction, so your best bet is to either visit multiple locations or hope that your cashier will allow you to ring cards up in multiple, separate transactions.

Using a legacy Chase Ink Plus or Bold card, or a Chase Ink Cash, you’ll earn 5 Ultimate Rewards points per dollar, for a total of 1,995 negative-cost points (depending on the liquidation methods you have available).

$15 in free groceries after $150 or more in Visa or MasterCard gift card purchases at Giant/Stop & Shop/Martin’s, plus cheap or free gas

Via Doctor of Credit, the East Coast Giant/Stop & Shop/Martin’s grocery store chain is offering a version of their periodic promotion for free groceries when you purchase prepaid debit cards. These promotions have taken several forms over the years, but this is one of the most generous versions I’ve seen:

• it applies to purchases of both Visa and MasterCard gift cards. Some people find it cheaper or more convenient to liquidate one type of card rather than the other, and this promotion gives them a choice.

• it offers $15 in free groceries, while previous versions of the promotion sometimes offered just $10.

• it offers a printed coupon to be used on a future purchase, which makes the coupon transferable and means you can ring up your gift card purchase at customer service and not hold up the ordinary checkout lanes.

• and finally, if you choose to buy MasterCard gift cards, you’ll also earn 2 gas points per dollar. For folks that spend a lot on gas, that may be a very valuable incentive to buy MasterCards over Visas.

The offer is supposed to run between August 23 and August 29, 2019, and the coupons can be redeemed for groceries through September 5, 2019.

Conclusion: Visa or MasterCard?

The manufactured spend landscape has become so fractured that there’s no one strategy that is going to work for everyone. For a long time, conventional wisdom had it that Visa prepaid debit cards were easier to liquidate due to Walmart’s almost-universal geographic footprint. But with their obnoxious new ID requirements and restrictions, that wisdom has become less conventional.

As you seek out as many cost-effective liquidation methods as possible, you’ll just need to stay even more aware of which methods might make preferring one card network or issuer or another more or less profitable and convenient given your specific circumstances.

No, you don't need to buy fixed-value gift cards for the Giant/Stop & Shop/Martin's grocery promotion

Doctor of Credit is one of my favorite resources for news about promotions (although they post so much stuff the website is almost unusable; I prefer their Twitter and RSS feeds). However, one consequence of the sheer breadth of their coverage is they aren’t specialists, which sometimes gets them tripped up when similar promotions come along from different merchants. I think that’s what happened this week when they wrote about the current Visa gift card promotion at Giant, Stop & Shop, and Martin’s store locations.

As a button on the post, William Charles wrote, “Will probably only work on a $100 fixed value card.”

The promotion: $10 off your next $10 grocery purchase when you buy $100 in Visa gift cards

This promotion may seem similar to last month’s promotion for $15 off $15 in groceries, but is actually superior in three key ways:

• the promotion is automatically triggered when you use your Giant card during a Visa gift card purchase. There’s no need to create multiple accounts, add digital coupons to each account, and keep track of multiple alternate ID’s.

• the promotion produces a coupon to use on a future shopping trip, so you don’t have to ring up your gift card and groceries together. That means you don’t have to check out with a cashier, who may be unfamiliar with the procedure for selling gift cards, and in any case requires summoning a supervisor and holding up shoppers behind you.

• the coupon can be used at self-checkout stations, which gives you breathing room to troubleshoot any problems you have using the coupon, like unadvertised discounts that might bring your grocery total below $10.

Of course, the drawback is that the discount is just $10 off $10 in groceries, rather than $15 off $15. Whether the increased simplicity outweighs the lower value is an exercise left to the reader.

The confusion: some promotions require fixed-value Visa gift cards, intentionally or not

There are two ways to get confused about what gift cards are eligible for which promotions. First, promotions may explicitly target fixed-value cards. For example, Safeway gift card promotions frequently specify that the promotion applies exclusively to $100 MasterCard gift cards. Second, promotions may not explicitly require fixed-value gift cards, but a store’s own policies mean they’re the only cards eligible. For example, during a lucrative promotion a few years back, a Office Depot stores sold both fixed-value and variable Visa gift cards, but only fixed-value cards could be purchased with credit cards. That wasn’t a restriction in the promotion (and indeed, some folks realized the promotion was worth doing even if you had to pay in cash for variable loads), but it was a restriction that applied to the promotion.

In the case of the current Giant promotion, the coupon is triggered by the purchase of $100 in Visa gift cards, not the purchase of $100 Visa gift cards; variable Visa gift cards work fine, and most (if not all) store locations will sell variable cards by credit card.

Conclusion

I don’t mean to give the DoC team a hard time for the mistake; like I said, I think they’re one of the most valuable resources in the community. I just want to make sure folks who were surprised or confused after reading their post know that this promotion is indeed available to those who find it more lucrative and convenient to purchase and liquidate variable value Visa gift cards rather than fixed-value ones at grocery stores.