We had a customer buy $2000 of Visa gift cards, then use them to buy four $500 money orders, and apparently he did the same thing yesterday. Told me he'd cash the money orders at his bank and do the same thing tomorrow, something about getting free airline points?
Anyone heard of this before, or know if it's against policy? Sounds a bit sketchy, but I dunno...
Yup, that have been an ongoing way to "earn" rewards with Credit Cards (Amex Blue used to give 5-6% cash back on grocery purchases). Its called "Manufactured Spend" at one point POS was updated to stop Visa/Mastercard/Amex Gift/Debit Cards from being able to purchase Money Orders (but blocked ALL Debt Cards by mistake). The Company did establish a policy of only Personalized Debit Cards are allowed for Money Order purchases (meaning your name needs to be physically printed on the card). You will know the customer is up to something when they "hide" their Gift/Debit Card and put it away real fast. Customers doing transactions like this will also purchase Money Orders for $999.21, $499.21 (.79 Fee), so its more obvious. It's slightly considered "Money Laundering" because your using a Credit Card to pay for Gift/Debit Card, your then using Gift/Debit Card to purchase a Money Order, then using the Money Order to make a deposit or cash (a few days later).
Yea, cash back deals and what not. My Discover hits 5% for Grocery Stores next year. So the three months I have that next year, I'll buy a bunch of gift cards at work because that 5% is greater than the 2% I'd normally get, so for example if I have to go spend money at Home Depot instead of going to Home Depot and getting 2% I'll buy the gift card at work for 5% and then use the gift card at home depot. Those dollars add up.
