Wal-Mart, Amex take on banks with Bluebird debit card
Jan 4, 2013, 5:41 am
#5071
Join Date: Jan 2003
Location: Fairfield County, CT USA
Programs: AA PLT+2MM / DL DM+1MM / A3 *G / Fairmont LT Plat / Ritz Gold / SPG Gold
Posts: 4,077
To answer your question, yes. CVS does not lose money selling these things.
Remember that CVS is not charged by your credit card company to process credit card payment; the merchant's acquiring bank handles that, and passes that down, along with interchange fees, to the merchant. Thus, fees vary merchant to merchant, depending on the deal struck with their bank. However, CVS is likely paying less than 1.7% in total credit card processing fees. I mention this only to demonstrate that the fees to process the transaction are not that high.
CVS is given the "loading fee" + at least 1% of card value. Thus, they always come out ahead when you buy these cards, but they naturally do not want them to be bought with credit cards for the simple fact that it cuts into their profits (and the less obvious problems of their shadier uses).
Remember that CVS is not charged by your credit card company to process credit card payment; the merchant's acquiring bank handles that, and passes that down, along with interchange fees, to the merchant. Thus, fees vary merchant to merchant, depending on the deal struck with their bank. However, CVS is likely paying less than 1.7% in total credit card processing fees. I mention this only to demonstrate that the fees to process the transaction are not that high.
CVS is given the "loading fee" + at least 1% of card value. Thus, they always come out ahead when you buy these cards, but they naturally do not want them to be bought with credit cards for the simple fact that it cuts into their profits (and the less obvious problems of their shadier uses).
The party losing in the equation is some combination of Vanilla or Amex (Amex in the case of BB users who do not use their card for purchases). Vanilla is willing to sell cash at a discount to the likes of CVS because for many customers (not FT'ers), Vanilla can collect rather absurd fees.
The unanswered question is what proportion of VRs are used in the FT way, versus the way Vanilla hopes. From reading the market commentary on the growth of prepaid cards, I'm optimistic we have some room to run.
Jan 4, 2013, 5:45 am
#5072
Join Date: Jan 2003
Location: Fairfield County, CT USA
Programs: AA PLT+2MM / DL DM+1MM / A3 *G / Fairmont LT Plat / Ritz Gold / SPG Gold
Posts: 4,077
The Greeks, on the other hand...
Jan 4, 2013, 6:17 am
#5073
Formerly known as cagalindo
Join Date: Sep 2010
Location: MCO TPA
Programs: Citi AA/HH/TYP Amex SPG/HH & Chase SP/PC
Posts: 1,335
I haven't checked my stash in months. I hope cardinal fang hasn't confiscated them yet.
Jan 4, 2013, 8:25 am
#5074
Join Date: Nov 2012
Location: NYC
Posts: 398
how long did it take for BlueBird to come in the mail? been a little more than a week now...i've got student loans to funnel thru BB!!!!
Jan 4, 2013, 8:38 am
#5076
Join Date: Nov 2011
Posts: 17
For those paying student loans I think it is important to know if your loan provider is giving you an interest rate incentive for auto-debit (most federal loans have a 0.5% deduction in interest rate if you use auto-debit). Depending on your loan balance and monthly payment using bluebird may or may not make sense for you (that is an individualized decision). As an example if I have 90K in loans and monthly payment is around $500 a month, the 0.5% lower interest rate saves $450 a year (at least the first year, this number would go down yearly based on loan balance) if you use auto-debit. If you use bluebird and are able to get 5x points, the best you could hope for would be 30000 points or miles ($6000 in loan payments a year x5) + fees of a little under $50 for 12 vanilla reloads. So if 30K points/miles +$50 is not worth $450 to you then paying student loans with bluebird doesn't make sense.
Jan 4, 2013, 8:42 am
#5077
FlyerTalk Evangelist
Join Date: Nov 2002
Location: BOS, MHT
Programs: AA ltg, B6, DL, UA, AS, SPG/Marriott Plt, HH, Hyatt
Posts: 10,052
it so totally is! and I am Kramer from Seinfeld - or George
but I think I am Jerry
Maybe some here think Sarah must be Asian too!
[QUOTE=NYBanker;19973011]
I was thinking more along these lines, Dr....
20120215132131_74325 by ltlizard0902, on Flickr
PP = prepaid vehicle
M/P/S = miles/points/status
FR/F = Financial review or Fraud team (potential occurrences signified by dotted line in artwork)
R/L/R = rinse/lather/repeat
but I think I am Jerry
[QUOTE=NYBanker;19973011]
I was thinking more along these lines, Dr....
20120215132131_74325 by ltlizard0902, on Flickr
PP = prepaid vehicle
M/P/S = miles/points/status
FR/F = Financial review or Fraud team (potential occurrences signified by dotted line in artwork)
R/L/R = rinse/lather/repeat
Jan 4, 2013, 8:47 am
#5078
Join Date: Sep 2012
Location: Born and raised in South Carolina, now in New York City.
Posts: 534
Jan 4, 2013, 8:51 am
#5079
Join Date: Jan 2005
Location: Dallas, TX
Programs: AA, UA, DL, SPG gold, PC Plat, CC gold
Posts: 196
Similar thing happened to me. Brought 2 VR yesterday. Cashier and store manager (he was nearby) were puzzled why 5 different people brought 2 VR each in the last 2 days. They didn't have any problem selling the VR and accepting credit card for it. Looks like VR at CVS is catching up to attract attention.
Jan 4, 2013, 9:00 am
#5080
Join Date: Nov 2012
Location: NYC
Posts: 398
For those paying student loans I think it is important to know if your loan provider is giving you an interest rate incentive for auto-debit (most federal loans have a 0.5% deduction in interest rate if you use auto-debit). Depending on your loan balance and monthly payment using bluebird may or may not make sense for you (that is an individualized decision). As an example if I have 90K in loans and monthly payment is around $500 a month, the 0.5% lower interest rate saves $450 a year (at least the first year, this number would go down yearly based on loan balance) if you use auto-debit. If you use bluebird and are able to get 5x points, the best you could hope for would be 30000 points or miles ($6000 in loan payments a year x5) + fees of a little under $50 for 12 vanilla reloads. So if 30K points/miles +$50 is not worth $450 to you then paying student loans with bluebird doesn't make sense.
Jan 4, 2013, 9:01 am
#5081
Join Date: Nov 2011
Posts: 17
I did not try it with bluebird but did previously with the amex prepaid when it first came out (tried a very small pull from chase using the routing and account number of the prepaid card) and it failed. Bluebird can push payments to other accounts but other accounts cannot pull payments.
Jan 4, 2013, 9:02 am
#5082
Join Date: Feb 2001
Location: Ann Arbor, Michigan
Programs: Airline Free Agent, Fairmont Lifetime Platinum, Hyatt Globalist, Hilton Honors Diamond
Posts: 3,041
>>>>>>>>>>>How so? You dont think Asian or ethnic groups should partake in amassing miles and points?
Happy: Yes, my wife is Asian. Someone has been emailing me to start posting pictures of her on my blog holding VR cards like some other bloggers do, lol.
Happy: Yes, my wife is Asian. Someone has been emailing me to start posting pictures of her on my blog holding VR cards like some other bloggers do, lol.
Jan 4, 2013, 9:04 am
#5083
Join Date: Jun 2011
Posts: 131
Similar thing happened to me. Brought 2 VR yesterday. Cashier and store manager (he was nearby) were puzzled why 5 different people brought 2 VR each in the last 2 days. They didn't have any problem selling the VR and accepting credit card for it. Looks like VR at CVS is catching up to attract attention.
fwiw, during my VR runs, i've witnessed a jewish man and a black woman purchasing VR @ CVS. "I think it may be getting a little, just a little out of hand?"
Jan 4, 2013, 9:09 am
#5084
Join Date: Jan 2010
Location: IAD, TPE
Posts: 465
Jan 4, 2013, 9:17 am
#5085
Join Date: Feb 2001
Location: Ann Arbor, Michigan
Programs: Airline Free Agent, Fairmont Lifetime Platinum, Hyatt Globalist, Hilton Honors Diamond
Posts: 3,041
Ok, just caught up with all posts. I can't believe an innocent observation almost became a racial "episode" here. To reiterate: Wife was told to stop at our local (neverturneddown) CVS store to buy 2 VRs. It was late at night (that store is open 24/7!!!). Only two customers in the store, both Asian ladies buying 2 VRs! I thought it was worth posting here that we aer getting nearer to the point of CVSManagement taking notice. Nothing more, nothing less.
Actually, I was shocked the person in front was not an Indian male in his 30s!
Call me Whitey.
Now when is that darn permanent myvanilladebit card going to make it to my house, come on!!!!
Actually, I was shocked the person in front was not an Indian male in his 30s!
Call me Whitey.
Now when is that darn permanent myvanilladebit card going to make it to my house, come on!!!!
Last edited by gpapadop; Jan 4, 2013 at 9:18 am Reason: typos
