Can a merchant account and credit card terminal be used to rack up points?
If you have access to a merchant account and a credit card terminal, you could theoretically process transactions to yourself and accumulate points in a cost beneficial manner. Take the current Chase BA offer. You could charge $30K on your merchant account, earn 137,500 points, a companion ticket, and come out of pocket about $700 ($600 for the credit card processing fee and $95 for the annual fee). Seems well worth it when you consider the cost of a business class flight to Europe.
And I'm sure this has been discussed before, but I wasn't successful using the search function.
True, we'd have to read up on the T&C, but even it was a violation it's almost impossible for the banks to know, particularly if they're separate banks. And the bank that manages the merchant account wouldn't care. They just want the fees.
its doable. but the 30k you put though is probably going to be considered revenue down the line and you will have to account for that come tax season. unless you get creative with your taxes
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Quote:
Originally Posted by MannyCPA
True, we'd have to read up on the T&C, but even it was a violation it's almost impossible for the banks to know, particularly if they're separate banks. And the bank that manages the merchant account wouldn't care. They just want the fees.
As a merchant services provider, I will tell you that we can easily find out. It's essentially a cash advance from your cc, against the terms & conditions, and it's a huge indicator of being a high risk client. Tread softly.
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This idea crops up and is trotted out with predictable regularity. Kind of like "Everybody Kills Hitler on their First Trip." It's an El Dorado. As others pointed out (and will doubless point out again in the future) it violates merchant agreements and makes no economic sense.
As a merchant services provider, I will tell you that we can easily find out. It's essentially a cash advance from your cc, against the terms & conditions, and it's a huge indicator of being a high risk client. Tread softly.
I highly doubt as a merchant service provider, you can easily find out. if i have an ink card, and I add a fake AU, run it through my terminal. no one is going to know.
I highly doubt as a merchant service provider, you can easily find out. if i have an ink card, and I add a fake AU, run it through my terminal. no one is going to know.
With the AU, they may not notice.
But irregardless, a single charge on a new terminal with no other activity for 30k? That would set off alarms even if said charge was legitimate.
I'd check the math on the merchant service fee though. You quote merchant service fees of $600 on 30K. That's 2.00%.
Can a small merchant (which you will be) really process a premium card for only 2.00% fee after all the fees and interchange fees? I'm guessing the total cost is closer to 2.50% or 2.75%.
Look at it from the other side: As a cardholder, my MBNA card pretty much gives me 2.00% back, which I can use as cash or near-cash. So wherever I use that card, I'm darn sure the merchants are getting charged way more than 2.00%.
This idea crops up and is trotted out with predictable regularity. Kind of like "Everybody Kills Hitler on their First Trip." It's an El Dorado. As others pointed out (and will doubless point out again in the future) it violates merchant agreements and makes no economic sense.
As a cardholder, my MBNA card pretty much gives me 2.00% back, which I can use as cash or near-cash. So wherever I use that card, I'm darn sure the merchants are getting charged way more than 2.00%.
Yes, that is a reasonable assumption. But, sometimes, businesses do irrational things. Earlier this year, my credit union gave me a car loan at 1.9 percent...... and they let me make my monthly payment by credit card.
I am pretty sure that they are losing money every month.....
