Right, it's not hurting the FFP any since the miles are awarded in exchange for a given $$ of spending - and someone is still spending cash in exchange for the points here. No different from picking up the tab on your miles earning CC when out to dinner with friends, and the other folks giving you cash for their portion later. Or any number of scenarios.

The retail loyalty card is a good analogy in many cases, as some establishments provide not just cents-off instant coupons but other rewards. Kroger gives money off gas purchases at its own gas stations (and participating Shell stations); CVS gives dolar-off coupons after a certain amount of spending; KMart has something similar. Cashiers often scan either a dummy loyalty card or their own if a customer doesn't have one. Several times I've been behind a customer at Kroger without a card, and just handed mine to the cashier so the customer could get a discount. The cashier never threw a fit that I was ripping off Kroger or violating some mysterious law against "points laundering"

The only possible issue here is that the cashier's employer could consider him to be using his position of employment for personal gain. Whether the employer cares or not, who knows. But I'm sure 3 months from now this thread will still be alive debating the matter!