Why CC doesn't simply forbid Gift Card purchasing?

[drkaje]

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@Open123 wrote:

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@drkaje wrote:

If that's truly a sore spot, tread lightly or avoid credit forums altogether, LOL! 

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Agreed!  I just try to offer my views without appearing "judgmental," which isn't always possible.  

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It takes all kinds.

Even if it were okay to point out behavior as destructive, no one would really be helped so there really isn't a point.

We see people heading for more drama pretty often here. Suggesting gardening is about as far as anyone goes.

[laboi_22]

I've purchased gift cards on my credit card for gifts not even thinking about that being considered "manufactured" spending. I was purchasing a mall (AMEX) gift card for a friend's birthday and didn't have cash. Thank goodness they accepted credit cards, or I would have been out of luck since I don't typically carry cash, and I never carry debit cards.

Not that I would ever spend money on all the fees, and risk getting my accounts closed down, but Vanilla Reloads, as far as I've seen it, knew that the product would be used in this way by advid credit card point collectors. When used with AMEX Blue Bird, VR can be worthwhile. Why do you think AMEX designed the BlueBird to be compatable with VR cards? Why should they care? Pre paid reloadable cards is a billion dollar business. Their website [VR cards] explains that the reload is a cash only transaction, but there are many retail locations that allow the use of credit cards.

There are many cases of abuse regarding the use of these cards, but ask yourself this: why do these retail stores sell these cards, and why do they allow the purchase to be completed with a credit card? The answer is money! It's a business. They can care less about how many points Chase just wasted. In the real world business is brutal. Some might even venture to guess that AMEX is laughing at Chase for designing this brilliant scheme since AMEX would FR you in a minute if you purchased too many VR cards. Not making excuses, but do you really think Chase is as honest as some of us. We feel a tinge of guilt when loading up on VR cards while gaining massive amounts of points, but do you think Chase feels bad for charging you interest fees, or over the limit fess, or foreign transaction fees? It goes both ways. I can bet that some might feel OK "sticking it" to the big banks in this way. After all, they did dabble in subprime arenas and use tax payer dollars to be bailed out. What's worse?

The only thing I participate in regarding something that might be considered manufactured is Amazon payments. I use it only as intended. Mostly people send me money using their credit cards for payments due to me (rent etc). I then transfer to my checking account. From time to time though, I use my Chase card and AP to send money when I need to as well--all the while getting points. They wouldn't allow it if they didn't want you to use it.

Bottom line abuse comes in all forms. You can abuse Amazon Payments. You can abuse VR cards. You can abuse food stamp cards even. I do think VR cards are the worst kind of abuse you involve yourself in since that product is marketed for people who are unbankable, which if you have multiple point earning credit cards, you don't typically fall into this category. Amazon payments on the other is designed for people like you and me. Whatever the case though, money is being made from your use or abuse and even though credit cards might be loosing out to some extent, someone somewhere is making a ton of money!

[longtimelurker]

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laboi_22 wrote:

I've purchased gift cards on my credit card for gifts not even thinking about that being considered "manufactured" spending. I was purchasing a mall (AMEX) gift card for a friend's birthday and didn't have cash. Thank goodness they accepted credit cards, or I would have been out of luck since I don't typically carry cash, and I never carry debit cards.

Not that I would ever spend money on all the fees, and risk getting my accounts closed down, but Vanilla Reloads, as far as I've seen it, knew that the product would be used in this way by advid credit card point collectors. When used with AMEX Blue Bird, VR can be worthwhile. Why do you think AMEX designed the BlueBird to be compatable with VR cards? Why should they care? Pre paid reloadable cards is a billion dollar business. Their website [VR cards] explains that the reload is a cash only transaction, but there are many retail locations that allow the use of credit cards.

There are many cases of abuse regarding the use of these cards, but ask yourself this: why do these retail stores sell these cards, and why do they allow the purchase to be completed with a credit card? The answer is money! It's a business. They can care less about how many points Chase just wasted. In the real world business is brutal. Some might even venture to guess that AMEX is laughing at Chase for designing this brilliant scheme since AMEX would FR you in a minute if you purchased too many VR cards. Not making excuses, but do you really think Chase is as honest as some of us. We feel a tinge of guilt when loading up on VR cards while gaining massive amounts of points, but do you think Chase feels bad for charging you interest fees, or over the limit fess, or foreign transaction fees? It goes both ways. I can bet that some might feel OK "sticking it" to the big banks in this way. After all, they did dabble in subprime arenas and use tax payer dollars to be bailed out. What's worse?

The only thing I participate in regarding something that might be considered manufactured is Amazon payments. I use it only as intended. Mostly people send me money using their credit cards for payments due to me (rent etc). I then transfer to my checking account. From time to time though, I use my Chase card and AP to send money when I need to as well--all the while getting points. They wouldn't allow it if they didn't want you to use it.

Bottom line abuse comes in all forms. You can abuse Amazon Payments. You can abuse VR cards. You can abuse food stamp cards even. I do think VR cards are the worst kind of abuse you involve yourself in since that product is marketed for people who are unbankable, which if you have multiple point earning credit cards, you don't typically fall into this category. Amazon payments on the other is designed for people like you and me. Whatever the case though, money is being made from your use or abuse and even though credit cards might be loosing out to some extent, someone somewhere is making a ton of money!

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It's not all that clear who is losing the money.  Chase went "wrong" with the Ink card offering 5x at office supply stores, which until recently sold VR and high-value ($500) gift cards, making these a profitable item to buy with these cards.   However, the office supply stores stopped selling them, so presumably it wasn't profitable for some reason (maybe fraud).

Citi's problem is with, among other things, the 5x groceries (gift cards) and especially 5x drug stores, where some CVS stores sell VRs.   CVS seems to have restricted sale to $1000 per transaction with credit card, but certainly continue to sell, here it is Citi that is shutting down people.

Clearly the Vanilla Reload people are fine, they are getting more $3.95 per reload than they might have expected!

Not quite sure what you mean by: I do think VR cards are the worst kind of abuse you involve yourself in since that product is marketed for people who are unbankable

Worst morally or worst because it is easily detected or something else?

[laboi_22]

Simply meaning that if you feel guilty as most normal humans do, using the product as it was not intended would in my mind anyway, create more guilt than lets say the use of Amazon Payments. VRs are used by many people as an easy and inexpensive way of reloading their prepaid debit card accounts. Usually the folks who use VRs for that reason only, they don't carry around AMEX cards. They use cash. If they could get an AMEX or other high end credit card products, chances are they would not be trying to purchase VR for their prepaid accounts. Using the product as it was not intended to manufacturer spending on credit cards, although not unethical in my opinion, would be the worse kind of spending for me and my guilty conscience. 

Amazon payments does allow me to earn points, but I don't abuse it. I use it as intended.

[longtimelurker]

OK, thanks.   I don't feel too guilty unless the extra purchases raised the price of VRs (already high for the unbanked) which it doesn't seem to do, or decreased availability, which might well have happened in many areas.  But there are still lots of retailers with them that don't allow purchase with a CC (Walgreens) and the "abusers" haven't emptied that stock!

[laboi_22]

Well that is true! I've yet to try the VR thing. I hear it's big in the point world. Wasn't sure how I felt about it. Since I don't really frequent Walmart to load BB or CVS to purchase the VR cards, I don't think it would make much sense to me. I wouldn't mind however getting extra points to pay things like my mortgage and such!!

[b_seeker]

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@longtimelurker wrote:

OK, thanks.   I don't feel too guilty unless the extra purchases raised the price of VRs (already high for the unbanked) which it doesn't seem to do, or decreased availability, which might well have happened in many areas.  But there are still lots of retailers with them that don't allow purchase with a CC (Walgreens) and the "abusers" haven't emptied that stock!

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The increase in VR purchases have led them to be a target for fraud now. Most common in Atlanta, currently, people are lifting the security scratch off tape stuff and reapplying it after getting the numbers and scratching the last digits off. The VR company (name escapes me right now) has been pretty good at dealing with it but this can cause unfortunate problems for those that really need the cards and might not notice tampered cards. It's gotten to the point where there no visible tampering and no numbers missing on the cards but the funds are still being lifted from the card, sometimes within minutes.

While I don't believe this will be the end of VRs, it can make it much more difficult for the "unbanked". While the majority of reports are in Atlanta currently, there are reports of it happening in much smaller numbers in other areas.

[enharu]

Looks like I touched a sensitive spot for someone.

Look, anyone can decide to do manufactured spending if they want to. Heres more flamebait for you: I even thought about it, not just on my discover, but on my chase and citi.

I weighed my options, about whether I wanted to keep my account open and in good standing, or to just milk all the rewards for what's its worth, have the account shut down, and walk away without any regrets/concern. I also thought about the EASE of doing it. For discover it was the easiest. I pretty much do it from home and everything is instant and done in a few clicks. For chase I will be driving to stores returning random stuff for the lulz. For GC I will be running back and forth banks and stores, all for a measly 5% minus fees.

After thinking through it, it honestly wasn't just worth it. With that much time, effort and expenses involves, I'm pretty much better off investing few more hours at work each day. And more importantly, I still want those accounts. If the process was a alot simpler, or the financial benefits were a lot more and it was for an account that I don't really give a crap about, ie my Barclays, I would probably do it.

More importantly, if I did do it, and got my account closed, I wouldn't be crying like some baby on the forums because its part of the risk of doing things like this. So in all honesty don't cry like you are innocent. You should have expected it.

To add: there's really no right or wrong to stuff like this. There's really no need to feel wronged nor righteous about. Put it this way: you made a decision that wasn't in line with what the bank wanted.

[BlueNightStar]

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@enharu wrote:
Looks like I touched a sensitive spot for someone.

Look, anyone can decide to do manufactured spending if they want to. Heres more flamebait for you: I even thought about it, not just on my discover, but on my chase and citi.

I weighed my options, about whether I wanted to keep my account open and in good standing, or to just milk all the rewards for what's its worth, have the account shut down, and walk away without any regrets/concern. I also thought about the EASE of doing it. For discover it was the easiest. I pretty much do it from home and everything is instant and done in a few clicks. For chase I will be driving to stores returning random stuff for the lulz. For GC I will be running back and forth banks and stores, all for a measly 5% minus fees.

After thinking through it, it honestly wasn't just worth it. With that much time, effort and expenses involves, I'm pretty much better off investing few more hours at work each day. And more importantly, I still want those accounts. If the process was a alot simpler, or the financial benefits were a lot more and it was for an account that I don't really give a crap about, ie my Barclays, I would probably do it.

More importantly, if I did do it, and got my account closed, I wouldn't be crying like some baby on the forums because its part of the risk of doing things like this. So in all honesty don't cry like you are innocent. You should have expected it.

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I admire your honesty and thought all of your points in this thread were well thought out and rational. I didn't get the sense that you were judging or saying you were morally better than anyone else, just pointing out the consequences of various behaviors.

At the end of the day we all have to live with our own decisions. The important thing is to take responsbility for them.

[b_seeker]

I just read a blog post that posted the full letter that Citi is sending out regarding the changes to some of their cards. Added a nice new clause about abuse and pretty much confirming you will be blacklisted if you are closed for the abuse.

Your Card Account may be closed based on signs of fraud or abuse relating to the earning or redeeming of ThankYou Points. If your Card Account is closed for any of these reasons, you may not be approved in the future for a Citi Credit Card account.