Discover Home Improvement Q 2 Question regarding gift card purchases

[JKSIMMONS]

I'm taking a guess here and assuming the Q2 home improvement catagory has something to do with Lowe's or Home Depot purchases. If that's the case, what is stopping someone from buying a bunch of gift cards to restaraunts, retail stores etc from their gift card kiosk thingy that every store has now? Would that be subject to the 5% cash back? I don't see how they would know.

I know you can do it with an amex at a grocery store if you have the BCE or BCP and it counts. Just wondering if anyone has some perspective.

[enharu]

Yes you can do that. It will count towards the 5%. Depending on the merchant's POS systems, the lenders are sometimes able to see what purchases were made. If the merchant is using those traditional card readers, then they won't be able see what you bought.

[chwebb1]

I didn't know that Lowes/Home Depot had gift cards for other stores. I'll keep that in mind for Q2.

[JKSIMMONS]

This got me thinking...what is stopping someone from getting a bunch of visa prepaid cards from lowe's or homedepot and paying their ATT cell phone/tv bill? Or any other bill for that matter? This is true for AMEX as well. You can get prepaid cards at the grocery. Anyone do this?

[chwebb1]

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@hwturner17 wrote:

This got me thinking...what is stopping someone from getting a bunch of visa prepaid cards from lowe's or homedepot and paying their ATT cell phone/tv bill? Or any other bill for that matter? This is true for AMEX as well. You can get prepaid cards at the grocery. Anyone do this?

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I have done this a few times. I have a Bluebird account too, so I can just load these prepaid cards onto Bluebird and pay bills that way.

[JKSIMMONS]

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@chwebb1 wrote:

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@hwturner17 wrote:

This got me thinking...what is stopping someone from getting a bunch of visa prepaid cards from lowe's or homedepot and paying their ATT cell phone/tv bill? Or any other bill for that matter? This is true for AMEX as well. You can get prepaid cards at the grocery. Anyone do this?

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I have done this a few times. I have a Bluebird account too, so I can just load these prepaid cards onto Bluebird and pay bills that way.

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How do you like that bluebird account? I'm really not familiar with it. Just did a quick google search. Is there a reason people use this over their regular bank debit card?

[phillyguy12]

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@enharu wrote:
Yes you can do that. It will count towards the 5%. Depending on the merchant's POS systems, the lenders are sometimes able to see what purchases were made. If the merchant is using those traditional card readers, then they won't be able see what you bought.

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this is part true, the hardware/ reader type has no impact and is no indication if the lender sees what the customer purchased, it comes down to the merchants POS software, lenders only see what the transaction consists of if the merchant's software supposts Level 3 processing.

level 1 processing is the most basic it typically just includes

 merchant name, total transaction amount and date

level 2 processing adds some more info

like merchant zip and state, it also breaks out the tax amt on total transaction

level 3 processing is basically a mini invoice copy of the transaction, it gives line level detail of the transaction, to item# item desc, u/m, price, tax per item, shipping per item ect

there is some incentive for the merchant to process at level 2 and 3 in way of reduced fees, but level 3 is more common in b2b and business dealing with govt transactions

only way to know for sure is to test the waters, if the software supports it i dont know if its nescessarily sent on every transaction, i think the discount for the merchant only came into play if the individual card called for the additional info other wise the info was ignored,

consumers may think the various fees they are charged are ridicilous but ive seen the fees merchants pay it can be insane and i dont know how a merchant can really know what it will cost to process a transaction, merchs get charged for auths, batches, settlement, charge backs, business cards, personal cards, rewards cards ect all can clear at a differnt rate,

[Anonymous]

Do you think discount furniture stores will count?

[Anonymous]

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@hwturner17 wrote:

This got me thinking...what is stopping someone from getting a bunch of visa prepaid cards from lowe's or homedepot and paying their ATT cell phone/tv bill? Or any other bill for that matter? This is true for AMEX as well. You can get prepaid cards at the grocery. Anyone do this?

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This is one of the basic ways of manufactured spending.   Discover and Amex BCP/BCE aren't particularly useful because of the low caps, but for other cards it works well.  With upcapped cards, you buy Visa gift cards, and either load them on to Bluebird (or similar card) or buy money orders with them, and pay the credit cards with the resultant cash, and repeat as often as you like, or until your credit card issuer complains.

Retail gift cards are much less of a good deal.   Check out gift card sites, such as giftcardgranny or http://www.thegiftcardfans.com/ (both search engines to find the best discount) and you will often find cards at a bigger discount than you would get buying the with a BCP.

[gdale6]

Home improvement is not limited to Lowes/Home Depot, your local hardware & home improvement store(s) should also be good to go for 5%