You really aren't supposed to be able to buy deposit-able things with your debit card as a purchase -- it should ring up as a cash withdrawal -- so it's very gray-area, since the onus of categorizing purchases is on the merchant/card issuer (Visa/MasterCard). With that being said, I don't think your credit union will care; if it's a credit-run purchase, they'll get their transaction fee and pass along the cut to RewardsNOW. Some of your reps may even applaud your ingenuity.
Abuse is very hard to define as being something separate from simply breaking the rules. While RewardsNOW might frown upon this, and they might pull the abuse card on you, they wouldn't necessarily know that you're churning, just that you're buying a lot of deposit-able stuff (and they're still getting their cut -- it's not like they're losing money on your proposition). My guess is that the abuse thing is more like if you were to buy $20,000 on your debit card, redeem the points, then return it all, putting your rewards account into a negative balance.
Originally Posted by
Alpha
My local bank has a point program via RewardsNOW. 1 point per $2 spend on debit purchases. I believe I could find some deposit-able, negotiable instrument to purchase and churn.
My concerns are two-fold. First, it's a credit union and a small bank. I often make my deposits with exactly the same person every time I go in. I'd have to make rounds of various branches I suppose. Or deposit via ATM? Not as easy to fly under the radar.
Second is T&C rule number 3: "In the event of Cardholder fraud, abuse of the Program privileges, or violation of the Rules, RCU, in its sole discretion, reserves the right to cancel your participation in the Program."
In your personal, professional, ethical opinion, whatever- do you think churning constitutes an "abuse of the program?" If not, what is that language meant to protect against? Would that give you pause? Does anyone have any personal experience with churning a program like this?