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.

The return of free+ groceries at Giant/Stop & Shop/Martin's

/

One of the most lucrative, most annoying grocery store promotions returns this week, just in time for folks who have been waiting to max out their Freedom second quarter bonus spend: receive $15 off $15 or more in groceries when you buy $250 or more in Visa gift cards at Giant, Stop & Shop, or Martin’s grocery stores.

Here’s how it works.

Load the digital coupon to each of your accounts right away

This promotion has taken a few different forms over the years, but the current version is a single-use digital coupon that has to be activated online before you can use it. The digital coupon expires July 6, 2019, but this is slightly misleading, and has tripped me up in the past.

Once you’ve loaded the coupon, you have until July 6 to use it, but the coupon will not be available to load that long. In past versions it’s only been available during the period covered by the current week’s circular, so I suspect it will disappear on June 27 if you haven’t loaded it by then.

Here’s the digital coupon you’re looking for:

You can have an unlimited number of loyalty accounts, but they do need to be created with unique e-mail addresses (for login and coupon loading) and phone numbers (for in-store lookup). There’s no verification of either, so you can be creative, but I recommend using a password manager like 1Password or LastPass so you can easily reuse your duplicate accounts during future promotions.

Select $15 in groceries before taxes and after coupons are applied

The terms of the offer state that it “will be applied to your grocery order before taxes and after all other coupons and savings are applied.” I’m not sure if this was made deliberately confusing in order to encourage people to buy more “just in case” their order doesn’t reach $15, but in practice it has not mattered for me. I simply keep a running mental total of the display prices of my groceries until I get to a little over $15, and if I end up a little short due to a coupon or unadvertised discount I just grab a box of Altoids off the candy rack to get me over the top.

I’ve had trouble replicating it but it seems that certain coupons or discounts can even reduce your grocery total below $15 while still triggering the credit, meaning you may be able to buy groceries at a negative cost (or get a discount on your gift card activation fee).

Add a $500 Visa gift card

Note that unlike in earlier versions of this promotion where you received a paper coupon you could use for later grocery purchases, the Visa gift card has to be purchased in the same transaction as your groceries. That means having to deal with ordinary cashiers who may not be familiar with the procedure, which requires a supervisor’s “key turn.” Hopefully over the course of the next two weeks you’ll give them enough practice to get comfortable.

So far so good.

But what do you buy?

I do a lot of grocery store manufactured spend already, and I love free groceries, so naturally I love it when this promotion comes around. The flip side of that is it turns grocery shopping into a part-time job two weeks at a time. I’m well aware that most travel hackers enjoy considerably more residential storage space than I do, but the fact is still that I live in a one-bedroom apartment and there’s only so much room to stockpile groceries. Even things that I use a comparatively large amount of I don’t buy months of in advance because there’s nowhere to put it.

That being said, here are my friendly suggestions for what to think about loading up on during the promotion. I typically devote a day to a single item or category so I don’t have to think about mixing and matching each day.

  • Paper goods. Paper towels and toilet paper. You know you’ll use them eventually, and they never go bad, so load up and stuff them in the back of the closet if you have to. Just don’t forget they’re there!

  • Toothpaste. This is a favorite of mine since it also lasts forever (I hope?), is relatively expensive, and takes up relatively little room. This also goes for things like electric toothbrush heads which take up almost no space and are almost as expensive as printer cartridges.

  • Feminine hygiene products. Expensive and non-perishable: not everybody needs them, but if you do, you know you’ll use them eventually so this is a good chance to stock up.

  • Dried, canned, and non-perishable groceries. The problem with actual groceries is they’re not very expensive so $15 represents 7 or 8 boxes of pasta, 4 or 5 jars of pasta sauce, etc. But I usually devote a day or two to each, since I know I’ll get through it eventually. If you’re a bean guy, buy 15 cans of beans. If you’re a soup gal, but 15 cans of soup. Canning is miraculous technology.

Think about stuff you can give away

I always throw this option in because travel hacking in many respects is a case of what my mom always calls “the rich getting richer.” Virtually every midsize or larger city will have a resource center that can put you in touch with local diaper banks, homeless and domestic violence shelters, transitional housing, etc. and they’ll typically have a long list of things their clients need. You shouldn’t claim a tax deduction for donating stuff you got for free, but Giant’s corporate shareholders will no doubt receive some leniency in heaven for their generosity towards the needy.

American Express retreats from Priority Pass restaurants and resort credits

/

In the last few weeks a couple pieces of news have come out from American Express:

While the former change in principle affects more cardholders, I think the latter change gives a better clue to what’s going on here.

Very few American Express cards offer Priority Pass membership

To the best of my knowledge (leave a comment if I missed any) the only American Express cards currently available which offer Priority Pass Select memberships are:

  • Platinum business and personal charge cards (unlimited visits)

  • Centurion charge cards (unlimited visits)

  • Marriott Bonvoy Brilliant credit cards (unlimited visits)

  • Hilton Honors Aspire credit cards (unlimited visits)

  • Hilton Honors Ascend credit cards (10 free visits per calendar year)

  • Hilton Honors Business credit cards (10 free visits per calendar year)

The first 4 cards have annual fees of $450-$595; by comparison the Hilton Honors Ascend and Business cards are a steal at $95 per year.

Priority Pass restaurant credits should be a win-win situation

There are a few moving pieces it’s important to understand about the economics of a Priority Pass restaurant relationship:

  • breakage: restaurants get a flat fee for a maximum value. In May, 2018, for example, Priority Pass reimbursed Timberline Steaks & Grill at Denver International Airport $23 per check-in. Of course, customers with unlimited Priority Pass memberships and unlimited guests may not use their entire $28 per person credit if they’re just popping by for a drink or an appetizer.

  • overage: on the other hand, a cardholder and guests who order more than $28 each, after tax, doesn’t receive a discount on the overage. So while an 18% discount ($5 off $28) may sound like a lot if you order exactly $25.85 before tax, you get a 0% discount on every dollar you spend over that amount.

The labor squeeze

If you have ever looked at the description of a Priority Pass restaurant, you’ll have noticed that they emphatically, entirely, and comprehensively do not include gratuities in the value you’re able to redeem during a restaurant visit. In jurisdictions with a “tipped minimum wage,” i.e. places where employers are not required to pay their employees the minimum wage, the restaurant gets to keep the entire value of the Priority Pass redemption while the tipped staff’s income is reduced by the amount Priority Pass customers tip less than paying customers.

On the margin, this should modestly increase the value of Priority Pass redemptions to restaurants since the increased value of the sales accrue to the restaurant’s management while the increased intensity of the work is paid for through customers’ tips.

Priority Pass restaurants (and lounges) can and do throttle access

The flip side of that is during periods of high demand, when lounges and restaurants in the Priority Pass network simply refuse to accommodate Priority Pass customers, collecting the full value of their sales without passing along a discount. This issue first came to my attention through the Alaska Boardroom lounges, where Priority Pass customers were routinely turned away during peak periods, but it has since spread and lots of people are familiar with the ubiquitous signs telling Priority Pass cardholders to get lost.

Most people don’t visit Hilton resorts most years — and American Express wants to keep it that way

Once you start to think in terms of breakage and overage, the restriction on prepaid advance purchase rates for Aspire resort credits makes perfect sense: some share of Aspire cardholders books stays at eligible Hilton resort properties each cardmember year. Perhaps it’s as high as 70%, leaving a hypothetical 30% breakage rate on the $250 resort credit. But if 90% of Aspire cardholders stay at an eligible Hilton property every 2 years, then the calculation potentially changes: those cardmembers will be able to redeem their resort credit every year: once when they make an advanced purchase rate reservation before their cardmember anniversary, and once when they arrive for their stay after their cardmember anniversary.

That reduced breakage rate has the potential to radically increase the product’s cost to American Express, just as the miscalibration between Hilton annual fees and Priority Pass reimbursements caused their current panic. But at the end of the day, it’s also not sustainable to offer high-cost, low-value credit cards in a competitive market.

My guess: Priority Pass restaurants will be back in the next year or two

It’s hard to make predictions — especially about the future. But given the short notice American Express gave for cutting off Priority Pass’s expanding network of restaurant locations, it seems like an obvious timing problem: Priority Pass has already entered into contracts with its participating locations, so it couldn’t afford to give American Express a discount. American Express takes years to adjust its annual membership fees. That meant the only place American Express had the option of stopping the bleeding was to cut off restaurants completely.

But there’s no reason to believe that’s true in the long term: airport restaurants will always have high fixed costs and low marginal costs. American Express will have to keep competing against premium products offered by Chase and Citi. Priority Pass’s network of relationships with airport restaurants is a valuable and unique asset (those handheld devices aren’t cheap).

All of which is to say, the American Express Priority Pass relationship may not, and probably won’t, take its current form, but I’d bet American Express premium cardholders will have access to Priority Pass restaurants in one form or another by the end of 2020.

Gary Leff is right that a ban on usury will make his scam harder to run. But should you care?

/

There was an interesting scrum this week as New York Congresswoman Alexandria Ocasio-Cortez and Vermont Senator Bernie Sanders introduced bills to place a cap on the interest rates charged by revolving credit facilities like credit cards and short-term “payday” loans.

Long-time reader and blog subscriber JC asked me to respond to Gary Leff’s take on the possible implications of such a law for travel hackers, and I’m happy to take the chance to revise and expand my response to him here.

Three channels a federal interest rate cap would operate through

If the federal government banned consumer interest rates above 15%, you’d see a few direct and indirect effects immediately:

  • Interest rates would be capped at 15%. Economists and pundits are eager to rush to second- and third-order effects, but I prefer to linger on first-order effects: a law banning interest rates above 15% will eliminate interest rates above 15%. The law might be well-drafted to create sufficient enforcement and penalties, or it might be poorly-drafted and allow loopholes and exceptions, and of course it might be shredded entirely once our amateur judiciary gets done with it, but there’s no obvious reason to believe a law capping interest rates at 15% wouldn’t succeed in capping interest rates at 15%.

  • Access to credit would be limited. It’s worth looking at this process in detail. The simplistic version would be that everyone who currently has an interest rate below 15% would be left alone, since the lender’s credit algorithm has determined that a sub-15% interest rate is appropriate for their risk profile, while everyone with an interest rate above 15% would be cut off completely. But this isn’t right: credit scores and credit profiles just aren’t accurate enough to make sure every single borrower has “exactly the right interest rate.” Instead, lenders know that some 14.5% borrowers are “really” 15.5% borrowers, and some 15.5% borrowers are “really” 14.5% borrowers. When you can’t overcharge good credit risks, but have to continue undercharging bad credit risks, your overall willingness to extend credit will fall. In some cases that will mean cutting borrowers off entirely, and in other cases simply reducing their credit lines to amounts the lender can live with under conditions of uncertainty.

  • The rewards ecosystem would be completely changed. Today, high interest rates and easy access to credit (which go hand-in-hand) have created an enormous pool of profits that banks and loyalty programs fight over good-naturedly. Sometimes a bank will bail an airline out of bankruptcy by buying a billion miles up front, and sometimes an airline will twist a bank’s arm to squeeze out a slightly higher revenue-sharing rate, but at the end of the day, there’s plenty of profits to go around. A smaller (reduced access to credit), less profitable (lower interest rates) industry would by definition have less money to fight over. That would likely mean consolidated credit card portfolios (one or two Marriott Bonvoy cards instead of 9), reduced signup bonuses, closer scrutiny of manufactured spend, and of course lower referral and affiliate payouts.

A transformed credit card industry would definitely hurt Gary Leff. What about you?

A consumer lending industry that had been “right-sized” (no doubt through several years of painful adjustments) around a 15% interest rate cap would almost certainly make it hard for Gary to make as much money as he does today selling credit cards to gullible newbies, for the mechanical reason that he’s paid for credit card approvals. Even if affiliate payouts remained the same on a per-approval basis, a 25% drop in credit card approvals due to tougher underwriting would represent a 25% drop in revenue. If affiliate payouts also dropped due to the industry’s lower profitability, he’d be slammed twice, with lower approval rates and lower payouts per approval.

But how would a transformed credit card industry affect you? It’s a very different question. Personally, in the last 5 years I’ve migrated almost entirely into fixed-value currencies like US Bank Flexpoints and Chase Ultimate Rewards to book my flights because of the difficulty finding award space. High revenue passenger loads account for part of that problem, but I assume flooding the world with cheap miles accounts for part of it as well. A world with a permanently lower rate of miles being awarded each year seems naturally like a world with more award availability and less pressure on airlines to inflate away the value of their miles.

Won’t somebody think of the poor?

It’s naturally a tad revolting to respond to a libertarian maniac like Gary’s “concern for the poor” because it’s being made in such obviously bad faith, but I don’t want anyone to walk away from his post concluding there are “good arguments on both sides.”

The poor need money, not credit. High interest rates reduce the amount of money the poor have. Easy access to high-interest debt reduces the amount of money the poor have. Emergency medical bills reduce the amount of money the poor have. No-cause eviction reduces the amount of money the poor have. Universal health insurance, affordable housing, free public transit, paid family and medical leave, universal pre-kindergarten, tuition-free higher education, and generous universal public pensions are how you help the poor, if you’re so inclined (I am not aware of any evidence Gary is so inclined).

If you want to help the poor, you need to increase the amount of money they have, not the amount of debt they have.

But Gary Leff is obviously paid to see it otherwise.

Quick hit: Ultimate Rewards points transfers are available instantly when you add an authorized user

/

This isn’t exactly news, but since I encountered it for the first time the other day, I wanted to pass it along to anyone else who might find themselves in the same situation I was in.

Expiring points are a constant nuisance if you have a lot of loyalty accounts

In general there’s no rhyme or reason to points expiration policies, with some being based on periods of inactivity, some being based on calendar years, some on program years, and some points coded to expire a fixed number of months or years after being earned. There are services that promise to track your expiring points, AwardWallet being the most prominent because they offer an affiliate program, but at the end of the day you’re responsible for your own points.

My biggest expiring-point mishap was with my HawaiianMiles account, where I had earned a sizable balance during a short-lived period when a mainland grocery store was both selling high-denomination prepaid Visa debit cards and participating in HawaiianMiles in-store mileage earning. After the grocery store withdrew from the program and stopped selling high-denomination cards, I lost interest and eventually forfeited almost 25,000 HawaiianMiles simply through years of inattention.

Ultimate Rewards transfers reset inactivity periods

If you see an expiration coming a long way off, there are plenty of ways to trigger activity. Buying a $1 Wall Street Journal subscription through a shopping portal would be enough to save your points, as long as you did it far enough in advance.

If you put it off, or don’t notice an upcoming expiration until it’s close at hand, you’ve got a different problem. Points purchases and transfers will usually reset expiration dates, but they’re preposterously expensive. For example, buying United Mileage Plus miles costs a minimum of $70, plus tax, for 2,000 miles, and transferring miles is almost as expensive.

Fortunately, transfers from Ultimate Rewards to their travel partners are free and instantaneous, starting at 1,000 points, and those transfers also reset expiration due to inactivity.

Ultimate Rewards transfers are available immediately after adding an authorized user

There’s a catch, however: you can only transfer Ultimate Rewards points to the travel partner loyalty account of an authorized user on your own flexible Ultimate Rewards-earning account, whether that’s a Sapphire Preferred, Sapphire Reserve, Ink Preferred, Ink Plus, or Ink Bold.

With my partner’s Mileage Plus balance expiring in just a few days, that got me worried. Would she be added as an eligible recipient in time for the transfer to go through before her balance expired?

Fortunately, after just a few clicks adding her as an authorized user on my Ink Plus account, she immediately appeared in the list of eligible transfer recipients, and I was able to instantly transfer 1,000 Ultimate Rewards points into her Mileage Plus account, pushing the expiration of her miles back another few years.

Conclusion

As I said up top, this won’t be news to heads of household that diligently manage their entire family’s travel finances. But if your family members maintain separate loyalty accounts and don’t carefully follow each other’s expiration dates, it’s good to know that Ultimate Rewards can serve as a quick and easy solution for some soon-to-expire miles and points.

Four possible deals spotted in the first three weeks of Daily Getaways

/

As predictably as the tides, summer approaches and the US Travel Association launches their “Daily Getaways” in an attempt to promote travel within the United States. And just like clockwork, the offers mostly generate a yawn from the travel hacking community. As usual, this year USTA is mostly just selling points and discounted theme park tickets. However, I did glance through the Las Vegas vacation packages and spotted a few offers that struck me as potentially good deals.

May 7: 4 nights at the Luxor for $500

The Luxor has a reputation as one of the more run-down properties on the Strip, and I’m sure that’s true, so ignore the value of the room itself: this package comes with a $400 food and beverage credit, and the credit can be used however you wish, while other Daily Getaway packages offer, for example, a $150 credit for a single meal. That reduces the chance of breakage (not using the full value of the credit) and overages (ordering a meal that exceeds the value of the credit), which means it should be worth very close to face value, assuming you value food at the Luxor at face value. Note that according to the terms and conditions the credit can’t be used at Diablo's Cantina or Public House, I assume because they’re owned by a third party, but can be used at Luxor’s TENDER Steakhouse, where entrees start at around $42, so a party of two should be able to get at least two or three meals from a $400 credit.

The Daily Getaway also includes two tickets to Blue Man Group. I know there are lots of options for discounted show tickets in Las Vegas, so it’s fair to value those tickets at perhaps $25 total.

If you get $400 in value from the dining credit, and $25 in value from the show tickets, you’ll be paying $75 total for four nights accommodation. That’s less than the resort fee you’ll pay at most Las Vegas hotels, even on a complimentary stay.

The other thing I liked about this offer is that it specifies the blackout dates in the terms and conditions, instead of simply saying “blackout dates apply” and leaving it up to the discretion of the hotel. The deal can be redeemed through January 31, 2020.

May 23: 4 nights at the Excalibur for $500

A similar deal to the Luxor, but with more restrictions: the $400 dining credit can only be used at the Camelot Steakhouse, which increases the chances of breakage and overages, but $25 per night is still lower than most Las Vegas resort fees, which means this has the opportunity to be a good deal — especially if you like steak!

May 14th: 2 nights at Harrah’s for $299

While not as good a deal as the Luxor or Excalibur, the Harrah’s offer again looks more competitive when you take the food benefit into account: it includes two “Buffet of Buffets” passes (as usual, upgrading to the Caesar’s Bachannal Buffet comes with an additional charge). If you want to try the Buffet of Buffets anyway (I did it once — it’s alright), then this deal will save you $120 plus tax, meaning you’ll pay $180 for two nights and roundtrip airport transportation.

I don’t like that the terms and conditions don’t mention the resort fee, which is $35 per night. Whenever a resort fee isn’t explicitly included, I assume it will be added, although it would be a pleasant surprise if not.

Like the Luxor deal, this offer explicitly names the blackout dates, “New Year’s weekend or Super Bowl weekend.” And finally, this deal has a much longer expiration date than some of the others, since you can book through July 1, 2020.

May 23: 3 nights at Circus Circus for $200

The Circus Circus offer is in some ways the most limited of the Daily Getaways, but also the one I’m most carefully considering buying for myself. It’s by far the cheapest, and explicitly includes the resort fee, so there’s no chance of surprise fees on checkout. The $75 Steak House credit is only good for a single visit, but is also low enough that there’s no chance of breakage. Likewise, it should be easy to get one breakfast buffet and one dinner buffet in over a 3-night stay.

The last time I stayed at Circus Circus they had a pitiful outdoor swimming pool, but it appears they’ve completely redesigned it. Since swimming is one of the funnest things you can do in Las Vegas, I’m considering this package if only to check out the reinvented waterpark.

Attractive duds

  • May 7: 2 nights at New York New York for $549+. The resort fee is explicitly added to this deal, meaning the $475 price has to be adjusted upwards by $74, plus tax. December 28 expiration date and 3 long blackout periods mean there’s virtually no chance you’ll save money buying this deal, even taking the $400 dinner for two at Gallagher’s Steakhouse into account.

  • May 14: 2 nights at Bally’s for $500. A $150 dining credit, airport transportation, and two show tickets still make this a $350 two-night stay. You can do better.

  • May 14: 2 nights at Paris for $500. Ostensibly a better deal than Bally’s, but splitting up the $150 dining credit and $150 spa credit increases the chance of breakage and overages. $200 for two nights at Paris just doesn’t add up.

Conclusion: at peak periods, these are all good deals

The fundamental problem with trying to save money in Las Vegas is that 300 or so days a year, Vegas just isn’t that expensive. Between status matches, chain hotel partnerships, and other promos and gimmicks, my airline ticket is usually my biggest travel cost when visiting.

On the other hand, during peak periods, when the biggest national conferences and events come to Vegas, the deals dry up and the hotels and resorts actually try to make a profit from room rates instead of just relying on the slot machines. If you know you’ll visit Vegas during one of those peak periods, and are confident you’re not going to be locked out by limited availability and blackout dates, then jumping on a room rate of $25 or even $100 per night may end up saving you a lot of money.

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:

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.

Success removing a disputed item from my Experian credit report

/

Last month I explained the process I followed to dispute a derogatory remark on my Experian credit report. Experian told me it would take a month to resolve, and sure enough, when I logged on exactly a month later, I saw two alerts, that my dispute had been “updated” and that it had been “resolved.”

Commenters had me convinced I didn’t stand a chance

I encourage readers to go back and read the comments to my earlier post, because there’s some valuable information there about best practices in pursuing a dispute. The basic idea seems to be that as easy as it is to dispute items online, it’s just as easy for creditors to certify their original submissions are accurate, leaving you right back where you started, while if you want to make a creditor actually document their claim, you need to resort to an exchange of hand-written, certified letters. One commenter even suggested using non-white paper to get a better result!

But my dispute was resolved frictionlessly

Fortunately, in my case it didn’t come to that. My assumption is that the small credit union in question either didn’t know how or didn’t care enough to respond at all, so I won the dispute by default, the two sweetest words in the English language.

The status of the dispute now simply says, “This item was removed from your credit report.” Experian also allows me to view how the derogatory item was reported before being removed, which is a nice touch.

Conclusion

Disputing derogatory items online with Experian is so easy that I think it’s probably worth doing even for disputes you think will probably be rejected, but it’s obviously worth doing for well-founded claims and those against smaller creditors that may not have the willingness or sophistication to follow through with the process.

But be aware of the two-track online and snail-mail processes, since if the first doesn’t work, you may need to resort to the other.

The current Choice Privileges promotion is so stupid I expect it to become the norm

/

I was rummaging around on my Hotel Promotions page (check it out if you have any upcoming stays; current promotions are running as late as June 4, 2019) and noticed some funny language in the terms and conditions of the current Choice Privileges promotion. Once I understood what was going on, I groaned at both the idiocy and genius of the promotion design.

The first “top-up” promotion I’ve seen

How the Choice Privileges promotion works is that you are guaranteed to receive a total of at least 8,000 points when you complete two qualifying stays (a qualifying stay being one booked through the website, app, or over the phone). Your stays should still be eligible for the promotion if you book through an online shopping portal, where Choice has quite broad participation. You’re also guaranteed to receive a minimum of 5,000 bonus points. Here’s what the terms and conditions say:

“Registered members will be awarded a minimum of 5,000 to a maximum of 8,000 bonus points after the second qualifying stay. The number of bonus points awarded depends on the number of base points earned from the two separate qualifying stays, with points varying by hotel. The total of base points plus bonus points awarded, however, will be at least 8,000 points.”

To see how this works, take a real-life example: my two-night stay at the Quality Inn Harpers Ferry in October of last year. I paid $236.55 in room charges on that stay, which as a non-elite member earned me 2,360 Choice Privileges points (I guess they’re so stingy they round down).

If I’d had a second, identical stay, I’d earn another 2,360 points, for a total of 4,720 points, leaving me 3,280 points shy of the 8,000 minimum total points. In that case, I’d earn the promotion minimum of 5,000 bonus points, for a total of 9,720 points. If I’d booked a room rate half as expensive, earning just 2,360 points on my two stays, I’d earn 5,640 bonus points, for a total of 8,000 base points plus bonus points.

As this example makes clear, the value of the promotion (as opposed to the value of the program itself) is higher the lower your room rate: 640 bonus points higher.

A promotion design this dumb has to be a sign

Once I realized what was going on, I knew immediately this won’t be an isolated promotion. After all, despite the assurances of airline executives that they’ll never lose money ever again, nothing has fundamentally changed about the airline industry: it requires enormous, up-front, long-term capital investments and finances those investments by selling individual tickets to customers that are extremely sensitive to prices and the overall condition of the economy.

In other words, when the next recession comes, airlines will lose money hand over fist, just like they have in every previous recession, and will do anything possible to get more customers on their planes. The “rationalization” of frequent flyer programs into revenue-based earning will go out the window, and airlines will start shoveling miles towards anyone willing to buy a ticket.

The “top-up” promotion model is optimized to precisely target the marginal traveler: the airline can still award you 5 miles per dollar you spend on airfare, but, for example, guarantee you’ll receive at least one redeemable mile per mile traveled. Last-minute and business travelers can be handed a nominal minimum (like the 5,000-point minimum Choice is offering), while those buying cheap tickets and without elite status can have their balance “topped up” to the promotion maximum.