AlohaDaveKennedy

No - this is not the internet, this is another trainwreck. The internet is a cool place where we keep deals alive and well and off the blogs.

josephstern

Regarding all the PayPal questions, please use our new(isn) dedicated PayPal thread:

http://www.flyertalk.com/forum/miles...er-thread.html

AlohaDaveKennedy

Mines are exploding all over the jungle and the dead accounts are piling up faster than the national debt. The jungle is dying a slow death, just like the mint deal.

bocastephen

The only thing we need to keep alive is OD - VR, BB, etc are expendable. With OD, there are other options aplenty (not to be discussed here) that keep the cycle whole.

lkar

It's different. I've posted about this before, but nobody seems to care about the point.

AP's business model is to lose money. That's the bottom line. AP loses money even when used as intended. If you use AP just like paypal -- that is, buy legitimate goods -- it's the same as using it to churn. Yes, they will shut down abusers. But AP is fundamentally different from most mileage opportunities in that most have an intended use that is not unprofitable, and then the loophole or creative use that is unprofitable. AP is unprofitable for Amazon whether you're churning or whether you're actually buying something from someone and paying them -- the very thing Amazon seeks to encourage.

The only thing the mileage hackers add to AP is volume, and they aren't afraid of volume. Amazon/AP has one goal -- to make a dent in ebay/paypal. They are, at present, willing to take a loss leader on eating fees to see if they can compete. The deal will go away when one of two things happens: (1) AP starts to make a dent in paypal and thus is comfortable enough to start to charge fees, or (2) AP decides that ebay/paypal is too strong and devotes resources elsewhere. Now, might they get that sense if the only people using the service are mileage hackers? Perhaps. If anything, I would argue to the contrary. Mileage hacking is probably inflating the reports that Amazon looks at to figure out their market share of the pay transfer services market and may actually be keeping it going a little longer.

killercut

amazon should just introduce an auction site. that would kill ebay/paypal very fast!

dogbyte

How profitable is it to buy VRs unless you are meeting a spending requirement or have a bonus category? You are only earning $2.10 per $1000 if you are only getting 1% CB. Some people might not consider that worth their time. I guess if you place additional value on earning miles, then it becomes slightly more valuable. However, it is still only a small segment of the population.

The ODs in my area have already placed limits on purchasing GCs with credit cards. I can only purchase up to $200 per GC if I am paying with a credit card. If I were to use that GC to buy a VR, I essentially come out even after the fees. I now just buy GCs at ODs and then empty them using my AP account so I won't have to pay the additional fee.

I have a bonus category in drugstore, but once that expires, I do not know how motivated I will be to continue purchasing VRs, if it is still viable by then.

killercut

good so stop buying the VRs once you meet your needs. People keep churning $1000s of dollars for chump change! Leave the cards for the people that have a much better reason to churn the VRs!

dogbyte

I have my bonus category for another year. I doubt the deal will still be available until then. And what special reason do you have? Actually, I might churn as much as possible, even on cards that only earn 1% so that it will kill the deal for people like you. The only bottleneck seems to be I only have one BB card. Hmm, let me figure out how to get around that.

mtftw

Once I hit my last minimum spend ($700 out) I'm done with VR. If it's still around once I AoR again, I'll consider it, but frankly I don't see the point in continuing this for such a small number of miles.

84fiero

I about died when I saw that! Is that an amateur hour site or what?

lkar

Two responses: (1) Even at 1:1, buying miles at .8 cents per mile is attractive to many of us -- particularly for spend that previously resisted mileage earning like mortgage payments or other vendors that do not take credit cards or charge a percentage fee for credit cards. Especially given the completely flexibility -- need 4,000 starpoints for an award this month? Done. Need Amex next month? Done. (2) Many of us hold credit cards for which we receive important perks for spend beyond sign up bonuses.

jknc09

Sent 2 checks to myself, both of which did not make it to my apartment and everything was listed correctly on both. Rep called me after voicing my displeasure when no checks arrived passed expected date. She was from the "dispute" but could at least see they did not clear. Said she would refund the checks with in 48 hours.

Anyone have issues sending checks to themselves?

kdinino

Why do people do this? How about going to a Walmart or affiliated ATM and withdrawing CASH and not waiting or raising red flags? Plus with a direct deposit set up, the ATM fees are $0.

mintcilantro

I'm curious if anybody has insight into who loses money in the VR/BB bill pay scheme. The card issuer providing miles/cash back probably loses some for higher reward level and depending on how much merchant pays for taking cards. The store earned the 3.95 fee but lost some to CC swipe fees. The 3.95 is probably split between the bean and merchant to cover distribution and printing fees. Merchant-Bean and Bean-Amex probably have a commission structure. Amex would have made more money if BB was used for swipe transactions but in the bill pay scenario they benefit from the spread between money taken out/kept in account until it is paid to receiving party (high for check payments and low for electronic payments). They just don't make as much money.

It cost a min of 0.8% to participate in this deal, while that's much lower than typical processing fee, it's still not a loss. Sounds like a lot of organizations have to do some work before realizing they are not making as much money as expected from some customers. This loss may get blended with people helping all entities make money (CC interest/place in wallet, store with higher foot traffic, Amex with processing fees & customer base expansion, the bean with commissions).

I feel that because of the ancillary benefits, every entity is making some money (but less than average).... this deal may have some hope of surviving (maybe wishful thinking). Glad to see that the LH and US News article didn't have the specifics.

Plus this is for serious miles junkies only as many won't have the interest in 1. getting the right cards 2. locating the right stores 3. using miles for the right rewards


thoughts?