Manufacturing transactions is harder than you think

There are countless methods of manufacturing credit card spend, but the basic principles are simple: generate a credit card purchase (usually at some cost), liquidate the purchase back to cash (usually at some cost), and use the cash (plus any costs paid) to pay off the credit card balance. If you generate more in credit card rewards than you pay in costs, the technique is profitable.

In some cases these techniques are still profitable to the banks and merchants, and in others they’re unprofitable but travel hackers are too small a share of customers to be worth completely rooting out, so only half-hearted and incomplete efforts are made to remove the very hardest hitters.

A central feature of credit card manufactured spend is that it relies on spending as much as possible: more spend equals more profit. Debit card manufactured spend is often just the opposite: the goal is to generate transactions, not spend, and this creates surprising difficulties.

Why manufacture transactions?

There are a few main reasons you might want to manufacture debit card transactions. Some accounts charge fees for inactivity, and a $0.01 debit card transaction is enough to avoid the fee.

Other accounts, like the Consumers Credit Union Rewards Checking account that I use as my petty cash account, require a certain number of debit transactions to trigger their higher interest rates. Note that there are other, higher-interest-rate options available; I find DepositAccounts.com quite reliable for tracking them.

A product that, as far as I know, never took off in the travel hacking or personal finance community is the round-up savings account. These accounts have high interest rates but can only be funded by “rounding up” your change on debit card purchases. To achieve a meaningful balance in the account, it’s necessary to make an arbitrary number of debit card transactions with a cent value as close to 1 as possible, resulting in a 99-cent deposit.

Why is manufacturing transactions so hard?

I found it a bit counter-intuitive at first that manufacturing transactions profitably is as complicated in its own way as manufacturing spend. In both cases, the issues come from the fact that we’re using tools we don’t control for purposes they aren’t designed for. Here are some of the main problems I’ve encountered.

• Per-transaction costs. While many financial services have lower fees for using debit cards than credit cards, that’s primarily by charging flat fees rather than lower percentage fees, and flat fees make manufacturing transactions more expensive.

• Transaction minimums. A lot of options require transactions of at least $1. This is an obstacle to scaling, since even if you’re recuperating 100% of your transaction value, the larger each transaction must be, the more money you need to have tied up in the system at any one time.

• Processing rules. If a service processes your transaction as "PINless debit,” instead of as a credit card, then it may not count towards monthly transaction requirements. For round-up transactions, there may be rules about how far apart transactions have to be spaced.

• Closed loops. A lot of obvious options do work, but the money goes into a closed ecosystem where it has to be spent. Your Amazon gift balance can only be spent at Amazon, payments to your electric company have to be spent on electricity, etc.

• Automation. Arbitrage opportunities are so persistent not because they’re particularly complicated. Most of them could be learned by a person of average intelligence over the course of a light lunch. The reason they last so long is that most people already have a job and don’t want another one. Automation is a solution, but researching ways to safely automate large numbers of financial transactions is yet another job.

These constraints can interact with each other as well. Your cable provider might allow you to automate payments with a minimum of $1, which looks like a tidy solution until you realize that your cable bill can only be spend on cable, which puts a soft ceiling on the number of transactions you can generate with that method each month.

Here’s a roundup of the options I’ve looked into and some thoughts on each.

Plastiq (grandfathered)

I’ve used the Plastiq bill payment service on and off for years now. It’s changed so much that instead of using it overwhelmingly to manufacture spend, I now use it primarily to manufacture transactions. Under their old pricing model, using debit cards had a low fixed fee, so I scheduled twelve $1 payments per month until sometime in mid-2026. If I fall into a coma, at least my money will still be earning 3% APY.

As far as I can tell it’s no longer possible to get access to the old pricing, but this highlights the kinds of feature you want to look for as these services continue to pop up: low per-transaction price (I pay $0.01 per transaction, so $0.12 per month), easy liquidation (the $1 “payment” gets deposited into another account a week or so later), and long-term automation.

Peer-to-peer payments

I’ve had great success manufacturing round-up savings transactions with Venmo. They have a $0.01 minimum transaction and no fees for debit cards. The $0.01 has to go somewhere, and I’m not comfortable running multiple accounts and risking losing access to the tool entirely, so I send it to another person. This does generate a lot of annoying e-mails, so you probably want to set up some filters so those e-mails don’t drove you or your teammate crazy.

Cash App works as well, but has a $1 minimum transaction, which makes it a cumbersome way to generate round-up transactions. It works well for manually generating monthly transactions, so I do use it to meet the 15-monthly-transactions requirement on my Andrews FCU Kasasa Cash Checking account to earn 6% APY on up to $25,000.

Neither option has built-in automation. There used to be a way to interact with the Cash App ecosystem by text message, which would be a convenient way to automate transactions, but I couldn’t easily find any current documentation of that feature so my guess is they retired it at some point.

Store credit

I reload my Amazon gift card balance $1 at a time to meet some of my monthly transaction requirements, and I was pleased to discover that my $7 monthly Prime membership is charged first against my gift card balance, so I don’t need to worry about storing up too much unused Amazon credit.

I say store credit instead of Amazon credit because a lot of people have several services that have this feature. If you can load your transit pass, Starbucks balance, or cell phone balance $1 or $0.01 at a time then you can meet transaction requirements without the risk of locking up money you’ll never end up spending.

Conclusion

I understand that people feel themselves at a constant shortage of time and attention, even for the things that give them great joy and satisfaction. They are not only uninterested, but often almost offended by the suggestion they’d waste those precious resources on the essentially meaningless task of pushing buttons on their phone for a few minutes a day.

Believe it or not, I don’t find it especially fun or meaningful to push buttons on my phone for a few minutes a day either. But that’s a pretty high bar to hold every minute of your day too. I don’t find it especially fun or meaningful to brush my teeth either, but I’d like to still be chewing with a few originals by the time I’m 80 so I do it anyway.

Whether it’s earning the highest interest rate possible on my liquid cash in high-yield checking accounts, or dumping as much money as possible into my best savings accounts, I just don’t mentally categorize it as something that’s supposed to be fun. You fill out your timesheet in order to get paid, not because it’s going to bring about world peace.

How much is World of Hyatt credit card spend towards Globalist status worth?

It sounds like a cliche because it is, but World of Hyatt points are virtually the only loyalty currency to have retained a large part of their value in the years since I started travel hacking. This only sounds controversial because they have, in fact, lost so much value, especially at the very highest end: the most expensive stays at the top 10 or 15 properties have increased in price from 22,000 World of Hyatt points to 45,000 points during their “peak” booking windows.

That still consistently makes Hyatt stays the most valuable redemptions almost everywhere they operate, and I rarely see redemptions worth less than 3 or 4 cents per point.

This is, however, not a ringing endorsement of putting unbonused spend on Chase’s co-branded World of Hyatt credit cards, because those cards are not the best method of earning World of Hyatt points on unbonused spend.

Chase offers the same or higher Hyatt earning in all spending categories

The Chase World of Hyatt personal and business cards offer 2 World of Hyatt points per dollar spent on a range of categories:

• Restaurants

• Airline tickets

• Transit and commuting

• Fitness clubs and gym memberships

• Shipping

• Car rentals

• Gas stations

• Internet, cable, and phone bills

Unfortunately, Chase also offers cards that earn bonus Ultimate Rewards points in each of these categories, points that can be instantly transferred to Hyatt. In other words, no matter how highly you value World of Hyatt points, it’s extremely unlikely that one of their co-branded credit cards is worth carrying purely for the earning opportunities in any of the bonus categories.

Even on unbonused spend, the Chase Freedom Unlimited and Ink Unlimited cards earn 50% more points than the same spend put on a World of Hyatt credit card.

What is unbonused spend towards Hyatt milestones and status worth?

The World of Hyatt credit card comes with 5 qualifying night credits every year, and earns an additional 2 qualifying nights for each $5,000 spent on the card (regardless of category), and those qualifying nights count towards “Milestone Rewards.” Here’s a simplified breakdown of the results of your spending at different levels on the personal card (the business card has a slightly more generous status earning structure but does not offer the 5 free qualifying nights):

• $40,000 (20 qualifying nights): 2,000 bonus points

• $65,000 (30 nights): Category 1-4 award (up to 18,000 points) and 2,000 bonus points

• $90,000 (40 nights): 5,000 bonus points

• $115,000 (50 nights): 5,000 bonus points

• $140,000 (60 nights): Category 1-7 award (up to 35,000 points)

• $165,000 (70 nights): 10,000 bonus points

• $190,000 (80 nights): 10,000 bonus points

• $215,000 (90 nights): 10,000 bonus points

• $240,000 (100 nights): Category 1-7 award and 10,000 bonus points

As you can see, there are basically only 2 relevant “hinge points" (in addition to the Category 1-4 award granted at $15,000 in annual spend): at $65,000 in spend you get a boost of up to 18,000 points, and at $140,000 in spend you get an additional boost of up to 35,000 points. Combined with the earlier milestone awards, at exactly $140,000 in unbonused spend you will earn a total of up to 207,000 points in value, or 1.48 points per dollar.

This is, of course, virtually identical to the 210,000 Ultimate Rewards points that you’d earn putting the same spend on a Freedom Unlimited or Ink Unlimited card, which could be transferred instantly to World of Hyatt, with the added caveat that the value of the 30-night and 60-night bonuses is contingent on redeeming the awards at the most expensive eligible properties.

Note that milestone rewards continue after 60 nights, all the way up to 150 nights. At $240,000 in spend, you’ll earn up to 417,000 points in value, or 1.74 points per dollar.

How valuable is Globalist status?

Even if the marginal unbonused dollar is better spent on a card earning 1.5 Ultimate Rewards points per dollar than 1 World of Hyatt point per dollar, it would still be possible to get enough value from reaching spend thresholds on the World of Hyatt card to justify allocating the spend there instead, if you valued Globalist status highly enough and were confident enough that you’d reach it, or wanted to use the goal of Globalist status as a kind of commitment device.

Like all elite status, Globalist status is more valuable the more you stay with Hyatt, and it also requires fewer shenanigans like this the more you stay with them. If you stayed 25 nights per year with Hyatt, then the 5 free nights that come with the personal card would get you to 30-night Explorist status, and the $15,000 in spend to trigger the annual free night certificate would get you to 36 nights. After that, just $60,000 in additional spend ($75,000 in total spend) would result in Globalist status, 10,000 bonus points, and a free night certificate worth up to 35,000 points, a total of roughly 1.75 points per dollar on unbonused spend.

The most frequently cited benefits of Globalist status are free breakfast or club access and suite upgrade awards, although the latter is no longer strictly a benefit for Globalists, since you can request them instead of points at the 40-night and 50-night milestones.

I’ve had some awe-inspiring buffets at Park Hyatts and some soggy eggs at Hyatt Regencies, so for simplicity I consider your average hotel breakfast to be worth about $15-20. Over the 25 nights our hypothetical travel hacker actually spends with Hyatt, I’d call that around $400, multiplied by the number of people you usually travel with.

Suite upgrade awards can be terrific, but only if you can use them, which is notoriously difficult. Part of that is the games properties play to restrict availability, but I don’t doubt that elites really are trying to use them at the same properties at the same times. I’ve used suite upgrade awards for wonderful suites at superb properties but I would still not put a speculative value on them. My usual advice is simply to try to use them on every stay, in case you get lucky and there’s space, instead of hanging on to them for the perfect situation. If that situation does come along and you’re out of awards, you can probably just buy, borrow, or beg for somebody else’s.

In other words, Globalist status itself, excluding the awards that are easily convertible into points values, is only worth $400-$1,600 to someone spending 25 nights a year at Hyatts.

Conclusion

The reason I started by talking about bonused spend is that I don’t want to give the impression that you should begin thinking about travel hacking with unbonused spend. On the contrary, I’m fond of saying that actual purchases, many of which will inevitably be unbonused, should be a rounding error in your miles and points earning strategy.

On the other hand, large unbonused spend opportunities do come along in everyday life: some schools and coaches accept credit cards for tuition and fees, car dealers may allow you to pay for part of your down payment with a credit card, etc. When it comes to a $2 cup of coffee I couldn’t care less what card I pay with. But a $60,000 tuition bill is a valuable enough situation to take seriously as an earning opportunity.

If it can get you most or all of the way to Globalist status, the World of Hyatt credit card might be competitive with a Freedom Unlimited or 2% cash back card. I tell most people the best choice for unbonused spend is a 2.625% cash back card with Bank of America Preferred Rewards Platinum Honors status, but the fact is that combination isn’t available to very many people, either because they don’t have $100,000 in liquid assets or they have a more valuable use for it than parking it at Bank of America for three months.

Delta and American Express: break-even changes to break-even cards

If you have a Delta co-branded American Express card, then you might have gotten an e-mail or read elsewhere (Frequent Miler, Danny Deal Guru, Doctor of Credit) about increases to the annual fee and changes to some of the cards’ other benefits.

I’ve had the Platinum Business version for years now, and Delta is still my favorite domestic airline to fly, but I haven’t had any strong feelings about it since I drastically reduced my Delta flying and stopped pursuing their Medallion elite status. Since the card had a $250 annual fee, my only goal was to use the companion ticket for a flight that cost at least that much, so I wouldn’t just be throwing the money away.

Fortunately, Delta has nonstop flights from my preferred local airport to Madison, Wisconsin, and Lexington, KY, so I’m able to use the companion ticket almost every year to visit friends there.

The annual fee on the Platinum personal and business cards is going up to $350 per year, and the Reserve personal and business cards will cost $650, in both cases on your first cardmember anniversary after May 1, 2024 (the higher annual fees are already in effect for new applicants). Even taking the increased annual fee into account, the value proposition of the card after this month’s changes has actually moved slightly in my favor. Here are the major changes and my impressions of them.

Improved companion ticket

The most attention has rightly been paid to the improved companion ticket, which now can be used for flights from the continental United States to “Hawaii, Alaska, Mexico, the Caribbean, and Central America.” Platinum companion tickets can only be used for economy, while the Reserve tickets can be used to book first class (but not Delta One, the even fancier first class cabin).

As I mentioned, I’m not inclined to use a Delta companion ticket for domestic connections if a non-stop flight is available on another carrier. Since my preferred local airport doesn’t have international flights, when traveling abroad a connection or a worse airport is a given, so expanding the number of destinations makes me much more likely to successfully use the ticket each year.

Note that “success” in this case depends not just on your destination and the price of the ticket (at least $350 before taxes and fees), but on the eligible fare classes. While more destinations are eligible for the ticket, the same (L, U, T, X, and V) economy fare classes have to be available, which can deeply constrain your options, especially during more popular windows for air travel.

Rideshare credits

The updated Platinum and Reserve cards now have a $10 per calendar month rideshare credit. Ordinarily I’d consider this a distracting gimmick, but I happen to have a specific use for these credits: I have a $5 per month subscription to Lyft’s “community pass,” which gives me unlimited access to free 30-minute dockless scooter rides.

I switched my recurring payment over to my Delta Platinum card and can already confirm it triggers the rideshare credit. When I occasionally trigger small overage fees for rides over 30 minutes, the credits also pay for those, although that’s worth less than face value to me since I would be more vigilant about ending my rides on time if I didn’t have the credits to cover them.

Since this is a “real” expense I’m currently paying with cash, I consider this $60 per year to be worth a full $60 to me.

Who or what is an “eligible Resy purchase?”

Another statement credit added to the cards is a $10 (Platinum personal and business) or $20 (Reserve personal and business) monthly credit for “eligible Resy purchases.” Since I’d never heard of Resy, I hopped over to their website to see what they sold and whether I wanted any of it.

In case you’re as clueless as I was, it turns out to be a restaurant reservation management platform owned by American Express. Discovering this didn’t shed much light on the situation: I still needed to know what a “Resy purchase” was and what would make it “eligible.” Would I need to make a reservation? Is there such a thing as a prepaid restaurant reservation?

Fortunately, it turns out virtually every restaurant I could think of is on the Resy platform, so I headed to a cool café nearby to see what the deal was. They sell gift cards, so I bought $10 worth and waited. Two days later, I received an e-mail from American Express that I’d earned a Resy credit, and it has already posted to my account (the credit is backdated to the day of the purchase so I’m not sure when it actually appeared on my transaction record).

Given my experience, I believe the credit is applied by American Express based on their own record of participating Resy restaurants and not by the restaurant processing the transaction in a specifically “Resy way” (the payment terminal was “toast”-branded, a popular restaurant point-of-sale system in my city).

The gift card I bought is reloadable, so my current plan is simply to load another $10 to it on the first of each month. I don’t value the credit at a full $120 (since I have never and would never spend $10 a month at this café), but it’s certainly worth something.

Prepaid Delta Stays, large-transaction and high-spend bonuses

There are a few more odds and ends on the cards that you should be aware of but won’t be relevant to everyone.

All the Delta co-branded American Express cards cards have an annual Delta Stays credit of between $100 (Gold personal) and $250 (Reserve Business). Delta Stays is powered by Expedia and appears to have the same prices you’d find booking directly through Expedia or Hotels.com. I often use Hotels.com to book paid stays on non-chain properties, so I’m very likely to use my entire $200 credit each year.

The Platinum Business card is unique (Doctor of Credit incorrectly says that the Reserve Business has this feature as well) in offering 1.5 SkyMiles per dollar on otherwise-unbonused (i.e., excluding “transit,” “U.S. shipping,” “Delta flights,” and “hotels”) individual transactions over $5,000, on up to $100,000 in such purchases per year.

Finally, the Platinum and Reserve cards give you 2,500 Medallion Qualifying Dollars at the beginning of each year, and you can earn 1 Medallion Qualifying dollar for every $20 (Platinum) or $10 (Reserve) spent with the card.

The last two benefits create an interesting opportunity and tradeoff. The Platinum Business card alone allows you to spend $50,000 per year in transactions of $5,000 or more to earn 75,000 SkyMiles and Silver Medallion status, while the Reserve cards allow you to earn 25,000 Skymiles and Silver Medallion status with $25,000 in spend (in transactions of any size) or 75,000 SkyMiles and Gold Medallion status with $75,000 in spend.

I don’t think either of these are particularly good value propositions in a vacuum, since I don’t think either Medallion status or SkyMiles are very valuable anymore, but it’s worth mentioning if you need to top up your MQD’s to reach the next Medallion tier: doing so in $5,000 or larger transactions on the Platinum Business card improves the value by giving you 50% more redeemable SkyMiles.

Conclusion

You can see why I view these changes as modest improvements to a set of cards that were already pretty unremarkable. After deducting the $60 in cash-like rideshare credits, I’ll be paying $290 for:

• a slightly-improved economy companion ticket;

• $120 in café gift cards;

• and $200 in prepaid hotel stays.

That’s not a card I’d move to the top of my applications pile on its own, but it’s a card I’m fine keeping for another year. There are currently signup bonuses of 100,000 SkyMiles for the Platinum Business and 110,000 SkyMiles for the Reserve Business, which might make one of those worth signing up for if you already have a valuable use for the miles in mind. Since the companion ticket is only awarded after the first anniversary, you do have to hold onto the card for at least a year to even begin to get value out of your annual fee, which is not waived for the first year on any of the cards.

Venti, the too-clever-by-half subscription savings account and travel booking platform

What if I told you there was a way to earn 9% APY on up to $100,000 of liquid and federally-insured cash deposits? I hope your first response would be “tell me more,” because by the end of this post you’ll be begging me to tell you less.

Introduction

The company is called Venti (my personal referral link; we both get either $10 or $20 in “points” after you make a deposit — the site gives conflicting information on this and much else), and at first glance, the conceit is simple: pay an initiation fee of $9.99, and then select one of two paid tiers (the website lists a third intermediate tier in some places but not in others, because the company and website are hilariously amateurish):

• The “Priority” tier costs $72 per year ($8.99 the first year) and earns 5% APY on up to $15,000;

• The “First Class” tier costs $504 per year ($9.99 the first year) and earns 9% APY on up to $100,000.

Obviously, since for the first year there’s only a $1 difference in price and a 4-percentage-point difference in APY, you should sign up for First Class for your first year.

The most important catch in this program is that the “interest” you earn is not credited to your cash balance, but instead to your “points” balance, which is recorded separately. Your cash balance never changes except when you make deposits, withdrawals, or purchases. However, your points balance is included in your total balance (“spending power”) when calculating each month’s interest, so you still enjoy the benefits of compound interest.

In fact, I believe in principle your total balance should continue to compound even after it exceeds $100,000, since that’s supposedly only the maximum cash balance, not total balance, in your account, but I can’t speak to that from experience.

Using points (spending your “interest”)

Of course, money is only worth what you can spend it on, so you’re not earning any interest at all until you redeem your points.

To this end, Venti has implemented the most primitive booking website in history. You can book two things with Venti: airplane tickets and hotel stays, and each has its own portal, interface, and backend. The airfare portal is better than the hotel portal, and I haven’t had any trouble finding results that match the routes and prices available on any normal travel portal.

Hotel bookings, which only became available this month, are still not working great. As far as I can tell they pulled a static list of hotel rates when the site when live, so a lot of the search “results” they return are no longer available. Presumably that will eventually get sorted out, but it’s hard to know since communications from Venti are pretty inscrutable, to the point where my guess is that English is not the first language of any of their marketing employees.

Once you find a flight or hotel you want to book, you’re given the option to pay with a combination of cash (from your cash balance) and points (from your points balance). Importantly, however, you are not given the option to pay with any combination of cash and points.

The catch

Venti limits the number of points you can redeem for reservations to a percentage of the total cost.

In some cases that percentage is almost 100%. For example, they are currently promoting that “For 2024, any hotel quote with a total order MSRP of $120 or less can be booked for under $1 with Points.” When they say “with Points” they’re trying to convey that they will allow you to spend up to $119 of your points balance, so that you’ll owe less than $1 out of your cash balance. But that $119 is your interest on your money: they’re pretending to do you a favor by letting you spend your own money!

You can click around the airline and hotel booking portals yourself to get a sense of what the maximum points component of various reservations is.

For airfares, I’ve seen maximum redemptions of 15% and 25%. Oddly, like the old US Bank Flexperks Travel Rewards card, the maximum redemption seems to be based on the price of the ticket, with 25% redemptions for flights in the lower hundreds and 15% redemptions on more expensive flights, meaning you could redeem $100 in points and $300 in cash for a $400 flight, or $150 in points and $850 in cash for a $1,000 flight.

For hotel stays, there also appear to be price bands, starting at 20% for stays under $500, and then further bands of 17.5%, 15%, and so on down to 5% for the most expensive stay I found: just $1,724 in points for a $34,472, 7-night stay at The Dominick Hotel in New York City. Note that these bands are applied to stays, not nights, so you have the option to get a higher usage rate if you stay under a band threshold by breaking longer stays into shorter, cheaper ones.

The way I think about this is that you are not “saving money” when you redeem points. Instead, you are trying to maximize the amount of interest you are spending and minimize the amount of capital you are spending, since you can withdraw your capital at any time but your interest is locked in their ecosystem and subject to their rules.

What’s really going on here?

It took me a while to figure out what was going through their minds when the Venti gang concocted this scheme, but I think I finally wrapped my head around it: Venti is selling access to commission-free rates, and taking your interest instead.

Consider a normal commissioned transaction. It could be an insurance policy instead of a hotel room, but let’s stick with travel for simplicity: a hotel is selling rooms for $100. But hotels are in the hospitality business, not the marketing business, so they announce they’ll pay $20 to anyone who sells one of their hotel rooms. Not wanting to undercut their own feeble marketing efforts, they further insist that they’ll only pay the $20 to people who sell their rooms for $100.

This gives every tout a $20 budget to spend on marketing hotel rooms, and as professionals, they can make $20 go a lot further than a harried hotel manager can. What a lot of them ended up doing was creating loyalty and rebate programs. In this stylized story, Hotels.com takes that $20 per night and gives $5 of it to their own members, or at least the ones who accumulate enough rewards to ever redeem them for anything. They give another $1 to cash back portals to drive more traffic to their site so they can collect more of those $20 bills. The cash back portals give $0.25 of their dollar to bloggers when people sign up with their affiliate links.

Consider another, parallel ecosystem in the banking industry: brokered accounts. Ordinary people, if they encounter these at all, see them in the form of mortgage brokers and those ads in the back pages of the newspaper for brokered CD’s. You can think of a brokered CD as having some “true” rate of interest the bank is willing to pay to brokers for collecting deposits, such that they’ll make the profit they expect when lending the money out. The broker can then pay depositors whatever interest rate they’re willing to accept, and collect the difference as their “commission.”

At Venti, they seem to have looked at these two ecosystems, added a weekend of cocaine and ecstasy, and finally had the audacity to ask, “why not both?”

Here’s my crude version of their business model.

• Venti’s custodian, Veridian Credit Union, has some “true” underlying rate of interest they will pay anyone who collects money for them. If I had to guess, that rate is somewhere between 4% and 6%, but there are doubtless different tiers and bonuses that affect it as well. It is, in any case, nowhere near the 9% APY Venti promotes.

• As indicated above, Venti also charges customers account initiation and annual fees.

• Finally, Venti is paid a commission for selling flights and hotels through their crude booking portals. Remember, you can book flights and hotels using only your cash balance, without using any points at all, and on those transactions you pay full price and Venti collects the merchant’s full commission. Together, I think these three sources make up virtually all the company’s hypothetical revenue.

• Next, Venti credits customers’ points balance with whatever interest rate they’ve paid for, while capping the number of points you can use at their commission rate, or a formula more or less approximating it. Since the commission is not a main or even important source of income, they can afford to be generous with these redemptions, like the $119 redemptions for $120 hotel stays. Even if $119 is slightly more than the commission they earn on the stay, they’ve still been earning interest on your money for all the months it took you to accumulate $119 in points.

We can quibble about the details later, but take as given for a moment that this is an extremely profitable business model: they are selling something that costs them nothing, while collecting interest on other people’s money. It’s a kind of charming inversion of the free money dynamic that powered the careers of so many idiots during the last decade. Now that money is expensive again, they’ve changed gears from spending to collecting as much of it as possible!

The problem with airfare

There’s an obvious reason why cashback portals don’t pay out on flight reservations: there’s no money in the commissions. Airlines aren’t like hotels or car rental agencies that are desperate to get the word out: they can afford marketing departments and they go to a lot of trouble to differentiate themselves. Whether you think airfare is or should be treated as an interchangeable commodity is beside the point: I do not believe airlines are going around paying 25% sales commissions on $500 flights.

I am sure that Venti is aware of this problem, and I am sure that they consider selling airline tickets as well as hotel rooms to be a necessary cost of doing business. No one would buy into this crazy ecosystem just to get very slightly discounted hotel rooms (eventually, maybe, if they leave their money long enough without Venti going bankrupt).

Their survival as a going concern, therefore, relies on a favorable balance between airline and hotel points redemptions: enough customers have to redeem their points for hotel stays, which cost Venti nothing, to make up for customers redeeming for flights, which Venti has to pay near-market rates for.

But Venti has no control over that ratio, and any heavy-handed attempt to push customers away from flights towards hotels will simply drive them and their money away.

And this is, indeed, the story of so many companies that blip into existence, trundle along uneventfully until travel hackers discover them, and are then wiped out in a few weeks or months of extreme usage.

Conclusion

I do not think Venti is long for this world, at least in its current form, but once you understand how it works, it does offer a pretty clear value proposition: you can earn 9% APY in value that can be redeemed for up to 25% of the cost of paid airfare.

That’s not earth-shattering, but earth-shattering is a high bar to hold a 21st century travel or finance start-up to. Notwithstanding the enthusiasm of affiliate bloggers, most of what we do isn’t earth-shattering. Venti is a way to earn above-market interest on your savings if you sometimes pay cash for airfare.

If all of your travel needs are already met with points and miles, then you certainly shouldn’t lock any money into their system, but a lot of us pay cash from time to time, particularly for the cheap domestic flights where Venti lets you spend down your points balance most aggressively. Since I have a First Class membership (these were free back in December, although I still had to pay the $8.99 initiation fee), I’ll probably leave a few thousand dollars in my account earning 9% APY and clean out my points balance every few months when I book domestic travel.

Can Hyatt promo codes override seasonal cancellation policies?

Over the New Year holiday I braved the madness that is flying Southwest Airlines and took a weeklong trip down to Playa Del Carmen, Mexico. While putting the trip together, I noticed something curious as I sifted through the hundreds of hotels lining Quintana Roo’s coast: using a Hyatt promo code seemed to remove the restrictive cancellation policy at the hotel I ultimately chose. Since I didn’t need to cancel the stay, I’m not certain this is replicable or even useful, but I wanted to put the possibility on readers’ radars.

Planning my stay

Sparing the details of how I narrowed down the options, I finally settled on the Thompson Playa Del Carmen Main House, which had a nice combination of being both “in town” as opposed to the isolated beachfront resort hotels and a Hyatt property which at 15,000 points per night was an order of magnitude cheaper than any other hotel I was seriously considering.

The plan was complicated, in a good way, by the fact that I had two stackable American Express Offers, one for $60 off $300 spent at any Thompson in the world, and the second for $100 off $400 spent at any Hyatt property in Latin America. I also had over $1,000 in Hotels.com gift cards I got from Cardcash in an earlier gift card exchange.

This meant I wanted to break my weeklong stay into three pieces: paying for the most expensive nights with Hyatt points and a free night award certificate, paying for the cheapest night with my American Express card in order to trigger $160 off $400 (I used room charges to “top up” my bill to $400, since the cheapest of the 7 nights was only $379.90 after tax), and paying for the remaining nights using my Hotels.com gift card.

Cancellation policies, promo codes, and “Pay Your Way”

Since I was looking for the cheapest night to pay with my American Express card, I started on my irregularly-updated Hotel Promotions page and saw that the promo code “GOJALIN15” was offering up to 15% off paid stays. When I plugged that code into Hyatt’s “Special Offer Code” field, the rate popped right up.

This Thompson property, at least between Christmas and Epiphany (apparently a big deal in Quintana Roo), had a 30-day cancellation policy on award reservations and on all the normal paid rates I found. Inside of that 30-day window, no changes or cancellations were permitted without forfeiting the entire price of the stay.

The GOJALIN15 rate did not have that restriction. Instead, it had the standard 3-day cancellation policy you’ll find on stays if you go searching right now. This wasn’t particularly interesting on its own: I only wanted to book one night with cash, and the 30-day cancellation rate was much cheaper than the GOJALIN15 rate.

What got my attention was that when I clicked through the GOJALIN15 rate, I was offered the ability to “PAY MY WAY,” Hyatt’s booking feature that allows you to combine paid nights and award nights on a single stay. And using that option, the favorable cancellation policy passed through to the PAY MY WAY booking page.

Two observations follow from this, one actionable, the other merely interesting. The interesting point is that some (or all!) coupon codes generate PAY MY WAY-eligible rates; typically only "standard” and “member” rates are eligible for PAY MY WAY, so it’s nice to be able to identify potential future exceptions.

The more practical consideration is that if you plan to redeem points for a stay with unfavorable cancellation conditions, but can use a coupon code that applies more generous terms to the whole stay, then you might be able to “buy” a more flexible cancellation policy by paying for one night of the stay with cash.

Additional considerations

That’s the potential play, as far as it goes, but there are two more wrinkles.

First, it seems that even if you use PAY MY WAY on a coupon code with favorable cancellation terms, if you pay entirely with points or award certificates, then the stay is treated entirely as an award stay and the cancellation terms revert to the standard ones after making the reservation. In other words, you can’t change the cancellation policy on an award reservation merely by clicking the PAY MY WAY button.

I say “after” making the reservation because all through the booking process the more generous coupon code terms were shown. It was only after making my reservation and receiving the confirmation e-mail that I saw the 30-day cancellation policy on my reservation. I think this gives you a pretty airtight case for having the more favorable terms manually applied, as long as you are sure to take plenty of screenshots during the booking process.

Second, because I didn’t ultimately make a “mixed” PAY MY WAY reservation, I don’t know if the same thing would have happened in that case. If so, I still think the case for invoking the “original” more generous terms would be ironclad, but it’s never ideal to get into a position where the score is up to the ref.

Conclusion

I’m aware that what I’m describing is a fairly advanced corner case. You need to have a working coupon code that is set up with favorable cancellation terms (GOJALIN15 expires February 28, 2024), a property with unfavorable cancellation terms during your stay, and a stay with at least one paid night cheap enough to justify paying in cash to swap the cancellation policies — plus the willingness to fight for your points back if you do need to cancel the reservation in the window between the favorable and unfavorable policies.

And if you don’t ultimately cancel the reservation, then you’ll never know whether it “worked” or not!

Why do card counters sleep in their cars?

For the last few months I’ve been casually following up on my long-time interest in learning to play blackjack. I’ve now sunk about 100 hours into learning more about blackjack and casino “advantage play” in general, including listening to podcasts, reading forums, and yes, playing for real money in one of our local casinos. While it’s safe to say the casino still has a healthy advantage over me, what has struck me the most dipping my toes into the advantage play community is just how much it resembles the one I’ve been immersed in for well over a decade now: travel hacking.

Introduction to card counting

For those unfamiliar with blackjack advantage play, it consists of three largely unrelated components:

1. The ability to master “basic strategy.” For every set of blackjack rules, each hand of blackjack has a corresponding ideal move that offer the highest expected value to the player. This move does not always increase your chances of winning the hand; sometimes the move with the highest expected value is to surrender your hand and half your bet, guaranteeing your defeat! Playing perfect basic strategy reduces the house edge in most blackjack rulesets to 1% or less.

2. The ability to accurately count cards. There are a number of different card counting techniques with various advantages and disadvantages, but they all share the requirement that you update a running count as the dealer reveals each card. The ability to count cards has no effect on your odds of winning any given hand.

3. The ability to make the necessary moves to take advantage of perfect card counting. The most important of these is changing the size and number of your bets depending on your running count.

Note that these three skills are essentially unrelated. Learning basic strategy is a form of pattern recognition. While there are technically 310 different combinations of dealer and player hands that must be memorized to play perfect basic strategy, these fall into just 6-12 “patterns” (depending on how you find it easiest to memorize them). It probably took me 10-15 hours practicing with the “Blackjack101” iPhone app to be able to consistently play perfect basic strategy. If you practice using an app, note that you should find out the most common ruleset at your local casinos in order to make sure you’re getting the most practice on the ruleset you use the most. Different tables at the same casino can also have different rulesets.

Counting cards is a completely different skill, since there are no patterns in the order of cards dealt from a well-shuffled deck. The only way to learn to count cards is through hundreds or thousands of hours of practice. Depending on how you’re wired, you may find it easy or hard, relaxing or irritating, but if you cannot count cards perfectly every time then you cannot play blackjack with an advantage.

Finally, you must be able to adhere to a system of play that maximizes the amount of money at stake when the deck is rich with cards that benefit the player and minimizes the player’s losses when the odds are in the casino’s favor. This is not a matter of math or intellect at all: the knowledge of the correct bet flows mechanically from the method of card counting employed. But the ability to act on that knowledge is a matter of character and circumstance.

Advantage play and travel hacking

Using this framework, the parallels to travel hacking are obvious.

1. Travel hacking requires you to learn and access with relative ease the details of, if not the entire loyalty universe, then at least the programs that are or might be relevant to you. For a casual US travel hacker, that means at least 4 or 5 airline loyalty programs, one or two hotel programs, and a bank rewards program. Serious travel hackers learn much more, including about obscure and foreign loyalty programs.

2. A completely unrelated skill is learning and monitoring the current state of travel hacking techniques. Here, just as in card counting, accuracy is absolutely essential, since older techniques are constantly dying while new ones emerge. There’s no point applying for a signup bonus that expired last week, or expecting bonus grocery store rewards for a promotion that starts next Friday. Just as the skill of card counting atrophies without constant practice, returning to travel hacking after a long break requires refamiliarizing yourself with the current state of play.

3. Finally, perfect knowledge of loyalty programs and travel hacking techniques is useless without the ability to make the moves necessary to take advantage of them.

Most people cannot play blackjack with an advantage or succeed at travel hacking

A common lie, the motives behind which I’ll return to shortly, is that “anyone can win at blackjack” or that “anyone can be a travel hacker” (the latter claim normally safely couched by affiliate bloggers as “anyone can save money on travel” or something equally mealy-mouthed).

This is, of course, false.

Most people can’t play perfect basic strategy or memorize a dozen airline sweet spots because it is boring and has no meaningful connection to their everyday life.

Most people can’t count cards or decide whether a potential manufactured spend technique is worthwhile because it requires tedious and unfamiliar calculations.

Most people can’t make large bets when the deck is stacked in their favor or go big when a one-of-a-kind travel hacking opportunity presents itself because they are loss-averse, bet too low and forego lucrative plays, locking in their losses while passing up the chance to win correspondingly big.

Successful card counters and travel hackers don’t last long

What struck me most while learning about the card counting community and the available resources is that the biggest voices for card counting don’t seem to actually do it very much.

The typical progression is that someone discovers card counting, has a rough introductory period full of endearing anecdotes, then goes on a winning streak of 6-48 months (the length is immaterial). After that, they start Youtube channels, record podcasts, write books, and launch websites to sell card counting content and merchandise.

This is the same progression we see in travel hacking. Someone discovers travel hacking, has a few big scores, gets involved in the community, then they launch a blog, a podcast, a Youtube channel, and an affiliate relationship with the credit card companies.

There are two major reasons for this. First, the money is better, certainly on an hourly basis. Most travel hacking techniques require at least some time and attention to implement on an ongoing basis. Even simple online techniques require you to sit down at your computer and actually click the necessary buttons to trigger your payout each time. Writing a blog post full of credit card affiliate links, on the other hand, creates a kind of passive, semi-permanent money-generating asset as new readers discover the post and click through to your payday.

The second reason is that most people, even skilled, experienced people, don’t seem to enjoy it very much. For a lot of card counters and travel hackers, actually putting their knowledge to work seems like an unfortunate chore at worst or a dead-end job at best. “Running a business” packaging bite-sized tips on Tik Tok while burnishing your reputation as a Respected Elder must seem like bliss by comparison.

Why do card counters sleep in their cars?

One of the questions posed in the original “Freakonomics” book was “Why do drug dealers still live with their mothers?” The answer they arrive at is that despite handling enormous amounts of money, most individual drug dealers make poverty wages, so they live with their mothers, like many people who don’t make any money and are on speaking terms with their parents do.

What you realize listening to professional card counters is that they live in a kind of self-inflicted misery, driven in large part by the fear of “giving away their edge.” This often takes the ironic form of ascetisism. A common boast is that during a gambling trip a player will play for 20 hours straight every day. When they travel in teams, advantage players will bunk up in a single hotel room like a high school marching band to save on rooms. One player described sleeping in his (heated and air -conditioned) Tesla over the summer as he drove from casino to casino counting cards.

Importantly, this behavior is not driven by anything inherent to the principles of blackjack advantage play. In blackjack (if the dealer is using a “shoe,” or box of cards that are shuffled only once and then dealt out in order), each shoe is a new randomly ordered sample of cards, so the player’s result from the current shoe cannot have any effect on the probability of winning the next one. That means the player’s advantage, if any, is the same regardless of the number of shoes played. In other words, the player can stop at any time without affecting in any way the expected value of the hours they do play.

And yet, people who claim they have an expected advantage over the house of $100 per hour are willing to work for 20 hours in a row before falling asleep in their cars, all in order to save a few hundred dollars on a hotel room.

Conclusion

Lest anyone suggest I’m being snobby when suggesting most people can neither play blackjack with an advantage nor travel hack successfully, nothing could be further from the truth. Neither requires any special aptitude or gift.

Most people cannot do it because most people do not want to do it. If you try to talk to them about it, they may pay attention for a longer or shorter period of time out of politeness, and then they will lose interest and seek to change the subject to something that interests them instead of something they find tedious.

This is good and proper, not because it “preserves the opportunities for longer” or any hogwash like that, but because people should go through their lives seeking out things they find interesting and rewarding, not be lectured to by pedants about how they’re leaving money on the table by not doing whatever that particular pedant happens to believe is best for them.

The flip side is that when a nice online personality tells you something is easy, fun, and profitable, there’s a good chance that it is: for the person trying to get you to participate, against your better judgment.

Hilton gift cards trigger American Express Surpass statement credits

In October, 2023, American Expressed announced changes to the Hilton Aspire and Surpass co-branded credit cards. American Express has acquired a well-deserved reputation as a “coupon book,” and these changes were no exception. Alongside an increase in the annual fee from $95 to $150, American Express added “up to $50 in statement credits each quarter for purchases made directly with a property in the Hilton portfolio.” The only question was, how easy would it be to trigger those statement credits?

Hilton gift cards trigger Surpass statement credits

Back in December I tweeted that I’d received the $50 statement credit for the fourth quarter for purchasing a $50 Hilton gift card. Since the first quarter of 2024 was just around the corner, I decided to wait to write a blog post until I’d replicated that experience. This is that blog post.

Interestingly, the gift card purchase also triggered the Surpass’s 12 points per dollar spent on “eligible purchases made directly with hotels and resorts within the Hilton portfolio.”

Timing

I purchased my first $50 gift card on November 23, 2023, and my first statement credit posted on December 2, 9 days later. I purchased my second $50 gift card on January 1, 2024, and the second statement credit posted January 10, again 9 days later.

Having established that pattern, do not worry if your statement credit still has not posted 8 or fewer days after making your gift card purchase!

Why does it work?

All I can do here is speculate, but there are two obvious explanations.

First, it’s possible that when Hilton set up their gift card provider, they explicitly coded it as a Hilton property. If gift cards were coded as regular spend, earning just 3 Honors points per dollar, there would be a real tradeoff between putting your hotel spend directly on your card versus paying with a gift card. Coding gift cards as Hilton purchases eliminates that tradeoff.

The second possibility is that when American Express coded the $50 statement credit, they used a simple filter for the word “HILTON” in transaction descriptions. Since gift card purchases post as “HILTON GC [STRING OF NUMBERS]” they trigger the credit. This raises the interesting possibility that, for example, purchases made in Hilton Head Island, South Carolina, would trigger the credit if the merchant included the town name in their credit card description!

The cards themselves

Perhaps fittingly given the relationship between American Express and Hilton, the gift cards take the form of American Express cards, in the sense that they have 15-digit card numbers starting with 3, and can be used at any Hilton property that accepts American Express.

Whether the cards can be used at non-Hilton merchants that accept American Express is an exercise left to the reader.

Conclusion

Each $50 Hilton gift card has a $1.95 shipping and handling fee, so purchasing $200 in gift cards per year raises the total annual cost of the card (including the annual fee) to $157.80. In order to break even, you therefore need to value Hilton gift cards at about 79 cents on the dollar. Whether that’s a high value or a low value depends on how you plan on using the cards.

From my perspective, 79 cents is “a bit high” for spending the cards on food and drink at Hilton properties, since hotel prices are typically marked up by more than 25% off street prices, so I rarely spend money at hotel restaurants.

On the other hand, 79 cents is quite low if you plan on using the gift cards to “pay down” your hotel room charges, whether for your room rate on paid stays or, for example, for resort or other ancillary fees that you’d otherwise have to pay with cash. While resort fees should be waived on award stays, some resorts (like the Maldives resorts that have launched a thousand blog posts) charge hundreds of dollars in transfer fees that should be eligible for payment with Hilton gift cards. A 21% discount on those fees is likely better than anything your credit card offers, unless you’re spending towards a particularly lucrative signup bonus and have limited manufactured spend opportunities at home.

My successful experience replacing an Incomm Visa prepaid card

There is, by all accounts, an epidemic of fraud striking prepaid debit card retailers across the Western United States. I’ve had the remarkable good fortune of never encountering a tampered prepaid debit card in the wild. So when I needed an Incomm prepaid debit card replaced this month, I jumped at the opportunity to find out how the process works in practice.

Fraud has become a huge problem, but not my problem

If you visit manufactured spend forums you quickly find an ocean of complaints about gift card fraud. Not the “elder abuse” fraud that newspapers love to write about, but genuine larceny: card packaging is opened, the details of the card are swiped, then the card is repackaged so that when an unsuspecting customer activates the card, the balance is quickly drained by the fraudsters. I don’t have a representative sample but it sounds like there are at least some stores on the West Coast where almost every card seems to have been tampered with.

This was not my problem. My problem was that I messed up the magnetic stripe on a card. In other words, user error. Since the balance was still there and I had the card details, I could have liquidated the card online for a tax payment, or to reload my Amazon balance, but instead I called up Incomm to see what the process was to replace the card.

Incomm prepaid card Replacement process

When I realized my error, I first called the number on the back of my Visa prepaid card (833-322-6760). During that call, which according to my phone lasted 17 minutes, I provided the usual card information, as well as the prepaid card’s “serial number,” which is located on the bottom right quadrant of the back of the card, as well as on the card packaging. The phone representative also asked for my name and address. Finally, he asked me to send “copies” of the receipt, the front and back of the prepaid card, as well as my government ID, to “consumed@incomm.com”. I took photos of the documents using my phone on my dining room table.

I first sent the documents on Friday, December 1, 2023, and on Monday, December 4, I received an e-mail from the same address asking for copies of the front of the card and the receipt again. I immediately submitted new pictures.

On Monday, December 11, I received a new card via USPS first class mail. That card had to be activated over the phone, which according to my phone records took 1 minute. I had the option to set a PIN over the phone or use any 4 digits on the new card’s first use, like a normal Incomm prepaid debit card. The card could be and was immediately liquidated through one of my usual in-person channels.

Conclusion

Obviously I wasn’t going to freak out over holding a card for 10 days instead of my usual 90 minutes, but despite my story being anti-climactic there are some obvious lessons you may need a refresher on if you’ve gotten lazy in your manufactured spend routine:

1. Keep your cards, receipts and packaging together. You can use filing cabinets, ziplock bags (guilty) or anything else you like, but if you get a fradulent or defective card you will want to be able to pull everything out at once without having to triple check card numbers and your purchase dates and times. Any unforced errors you make are going to slow down the replacement process.

2. Act quickly. In the case of tampered cards this is more important, but even if you mess up your own card, Incomm isn’t going to replace it until you contact them. Set aside 20 minutes and pick up the phone.

3. Don’t float more than you can afford to. I got stuck with $500 in the ether for 10 days, which didn’t bother me because it was a short period and a reasonable amount. If I’d just bought $10,000 worth of cards and needed them all replaced before my next credit card bill was due, I’d have been sweating a lot harder!

Gift of Choice, the new (to me) restricted gift card product

Last week I had the opportunity to try a brand of “merchant-restricted” gift cards I hadn’t used before: the “Gift of Choice” cards sold by Safeway and “powered” by The Gift Card Shop. This gimmick, the merchant-restricted gift card, is has come around repeatedly over the years.

Five Back Visa gift cards are a way to earn a 5% rebate at certain merchants, including at Bed Bath & Beyond, a formerly-ubiquitous shopping mall staple that used to sell a variety of home goods, but also PIN-enabled Visa prepaid debit cards, leading to a negative-cost manufactured spend technique.

Happy Cards used to be physical gift cards that were (supposedly) limited to use at the merchants specified on the card. Judging by the website they seem to have mostly abandoned that model and now sell codes you exchange online for merchant gift cards.

That’s precisely the model used by Gift of Choice: you buy some flimsy cardboard packaging, scratch off some codes on the back, and redeem them for the digital gift card of your choice.

The Deal: 10 Just4U points per dollar

During the promotion last week, you would earn 10 Safeway Just4U points per dollar spent on Gift of Choice gift card codes, obviously in addition to any rewards you normally earn on grocery store purchases.

I normally value Just4U Rewards (100 points) at “about” $2.78 each (my valuation has increased since I wrote this post for a variety of reasons), so on a $500 Gift of Choice purchase (50 Rewards) I earn a rebate of about $139. I also save the $5.95 I’d pay to activate a $500 Visa prepaid debit card, while earning the same credit card rewards (minus the rewards on the $5.95 activation fee, natch).

Gift of Choice sells their redemption codes with a variety of merchants listed on the front, although I believe you can redeem the cards for any of their supported merchants regardless of the specific version you buy (I can’t check anymore because I’ve already fully redeemed all the cards I purchased, which deactivates their numbers). You can also split the value of the Gift of Choice code into multiple different merchant gift cards, and you don’t need to redeem the full value all at once, so you can spend it down over time.

The gift cards you receive after redeeming Gift of Choice codes are “real” electronic gift cards: you can check their balance online and spend the cards directly at the merchant, and gift card resellers shouldn’t have a problem with them, as long as they accept electronic gift cards.

I bought a Gift of Choice version listing Lowe’s as a redemption option, and redeemed my $500 codes for $500 Lowe’s gift cards. CardCash offers $412.50 in cash for $500 Lowe’s gift cards, or $457.88 in Hotels.com gift cards. Since I book most of my non-points stays through Hotels.com, those gift cards are worth almost the same as cash to me, and that’s how I liquidated the cards, paying $42.12 for at least 9,100 Alaska Airlines miles, or a maximum of 0.46 cents per mile.

Obviously, if you can actually use a gift card at a participating merchant, then your value proposition will look even better, and there are some moderately useful merchants in the system. If you grab fast food regularly, you can stock up on Taco Bell, Domino’s, and Subway gift cards. If you are in the market for athletic wear, Columbia, Under Armor, and Athleta are options; they sell some expensive stuff, and a 28% discount is nothing to sneeze at.

An intriguing possibility is to redeem your Gift of Choice codes for Xbox gift cards. My understanding is that these cards, in addition to games and loot crates and whatnot, can also be spent on Microsoft devices. I have no idea what the current state of the market is, but when consoles were in short supply ambitious resellers spent a lot of time buying and selling them, which may be a way to liquidate Gift of Choice cards at face value or for a profit.

The curious case of the code format

If and when this deal returns and you decide to pursue it, you’ll notice something right away I may as well mention now. I’ve been referring to Gift of Choice redemption “codes” throughout this post, because that’s how the system is supposed to work: you scratch off a little aluminum panel to reveal a series of numbers you redeem online.

But those numbers are actually formatted as a 16-digit “card number” starting with 4, a 3-digit CVV code, and a 4-digit expiration date. In other words, they’re formatted as a Visa card, and the card number satisfies the Luhn algorithm. The specific 6-digit BIN identifier (465568), according to numerous free and disreputable online services, is registered to a Swiss private bank, for whatever that’s worth.

What does this mean? I have no idea — I already explained how I liquidated my cards. But if someone is out there liquidating Gift of Choice cards online at face value as Visa cards, they’re not shouting it from the rooftops. The funniest possible case would be if they can be used as Visa cards, but only within Switzerland. Still, I have no reason to believe they can be used as Visa cards at all.

Successfully liquidating 3rd-party gift cards with CardCash

Gift card reselling is a manufactured spend technique that sees periodic surges in interest. At its base, it’s is as simple as any technique: buy gift cards at a big enough discount, or with enough of an earning bonus, and sell them at a small enough discount to make the points you walk away with worth the difference.

Players cycle in and out of this space with some regularity, and then are inevitably washed out by the inherent precarity of this line of business: a single batch of compromised gift cards can wipe out the usually-slim margins and cause an entire enterprise to tip into insolvency.

Revisiting CardCash

Checking back through my e-mail, it looks like I first used CardCash to liquidate Hewlett Packard gift cards back in 2016 when it was possible to generate unlimited points and cash by recycling them. I hadn’t used CardCash since, and while I didn’t remember having any problems with them back then, I didn’t even know if the site was still around.

Fortunately, it still is, and I was able to successfully use them to liquidate some Adidas gift cards I purchased during a recent promotion.

Bonus Safeway 4 U points on Adidas gift cards

Most weeks, the grocery stores around me run promotions for discounts or bonus points on gift card purchases. The promotions are usually for third-party gift cards, although last week Giant ran a formerly-common, now-rare promotion for bonus points on Visa prepaid debit cards.

Last week, Safeway ran a global promotion for 10 bonus Safeway for U points per dollar spent on Adidas gift cards. Since third-party gift cards usually earn one Safeway for U point per dollar, this meant you could earn 5500 points (55 Rewards) for each $500 Adidas gift card you purchased, plus any credit card rewards you earned on the purchase.

This was a nice combination of a big mainstream retailer (rather than a niche merchant like Top Golf) and a substantial bonus, so I decided to pencil out whether it made sense as a gift card reselling play.

Putting CardCash through its paces

Since it had been so long since I used CardCash, and the promotion lasted all week, I decided to run a few experiments before going all in. Fortunately, CardCash offers the same payout rate on all card denominations, so I first bought two $75 Adidas gift cards (the minimum to trigger the Safeway promotion), and submitted one to CardCash on Wednesday requesting a PayPal payout, and one on Thursday requesting an ACH payout. Both orders were immediately “confirmed” by e-mail, and both were “accepted” on Friday. I received the PayPal payment Friday afternoon and the ACH payment on Monday. The cash payout rate was identical at 80.5%, or $60.38.

With those experiments successfully completed, I was then confident enough to buy three more Adidas gift cards for $500 each.

Alternative redemption options

While CardCash will pay out cash, they also allow you to exchange third-party gift cards for other cards at a higher value. The highest redemption rate available was (and still is as of this writing) Hotels.com gift cards at $446.78, or 89.36% of face value.

I don’t have any special love for Hotels.com, but I do use them periodically when they have competitive rates or cancellation conditions for stays I don’t want to use points on. In fact, I have already booked two upcoming trips that added up to almost exactly the $1340.34 I’d get from swapping out Adidas gift cards. In my case, the Hotels.com gift cards were literally as good as cash to me.

Request for Proof of Purchase/Origin

I submitted my first two $500 cards on Friday and Sunday, and on Monday received an e-mail with the subject line “Request for Proof of Purchase/Origin” and the order number for my Friday order. The e-mail read:

“Thank you for choosing CardCash to sell your gift cards.

“To ensure secure transactions, please reply to this email with proof of purchase/origin for the gift cards you intend to sell. Please choose from the suggested examples or attach any other applicable documentation when replying to this email:

1. “Purchase receipts or invoices with transaction details.

2. “Documentation supporting their legitimacy, such as proof of employee incentives, loyalty rewards, or other valid sources.

3. “Additional details or explanations that provide clarity on how the gift cards were obtained.

“Upon receiving the requested information, our team will review it promptly.

“Providing this information is crucial in maintaining our commitment to a safe and trustworthy platform.”

I e-mail a photo of the card packaging, the back of the gift card, and the Safeway receipt showing the purchase details a little before noon and a little before 1 pm I received both a polite e-mail back and two e-mails with links to my newly-minted Hotels.com gift cards.

My third order was accepted without any additional verification.

Doing the math

I value Safeway Rewards in volume at about $2.39 each. They are only worth this much in volume, because more expensive awards also give better value. A single Reward is worth at most a dollar or two, while 7 Rewards are worth around $19.50. The 55 Rewards earned on a $500 Adidas gift card were therefore worth about $131.45 to me.

Selling Adidas gift cards for 80.5% of face value ($402.50) would still be slightly profitable, especially if you have a particularly high-value redemption in mind. But if you value Hotels.com gift cards the same as cash, as I did, then the value proposition becomes much more attractive, as I paid just $53.22 for what I conservatively value at $131.45 in Alaska Airlines miles.