DavidAL

Even though it's being coded as a "cash advance", to withdraw the $$ from the visa cards, I'm assuming your boss still has to pay a CC processing fee. What's the advantage of him letting you do this?

84fiero

So this works if you either run a business and have a POS machine that you can run these through yourself (eating the swipe fees) or like the OP, work somewhere that your boss allows you to do it. Must have the most generous boss in the world as that's a lot of fees he's swallowing for you. Great that it works for the OP but doesn't really seem expandable to 99.9% of us.

PaulMSN

So this just amounts to bragging. OK.

jrsjerky

I don't think this is just about bragging. I think the OP is providing some valuable insight into an area that could prove fruitful to others in special situations, such as business owners who accept credit cards.

AA_EXP09

I asked the boss about this.
He actually told me that since it's coded as a cash advance, the transactions look like this.
DATE TIME CARD AMOUNT MDR
01/15 14:22:38 xxxxxxxxxxxx9155 50.00 0.00
That's why on paypal, cash advances incur no fees.

spankytoes

OP, help me figure this out...

Let's say that you have $5,000.00 worth of Visa Gift Cards at $50.00 a pop. (100 cards) You run each of these through at a "POS" to get the cash back. Per the vendor agreement, your boss is charged 2% per Visa transaction. ($1.00 per card) So for you to receive $5,000.00 in cash, it will cost your boss $100.00 in fees.

You said that you processed $32,000 worth of cards. That cost your boss roughly $650.00 in fees.

Finally, I have NEVER seen a Visa Gift Card that allows you to receive cash back for it. In fact, they have explicit instructions telling the merchant to process the transaction as "credit". What you're doing is against both the TOS for the gift card and the merchant agreement for your boss. As someone astutely pointed out earlier, these provisions are put there to avoid money laundering. You are sending up red flags all over the place for your boss to be targeted for tax evasion.

I'd polish my resume...

84fiero

What does the "MDR" stand for?

jrsjerky

I don't see how the process of giving out a cash advance on a gift card through a POS would cause any tax problems for a business owner. No sales are being recorded. The business is simply charging to one type of tender and refunding another form of tender. If I was the OPs boss, I would not muddy the water by refunding through a paycheck. However, simply returning cash by charging a cash advance to a gift card shouldn't throw up red flags unless taken to extremes (which the OP may be doing.) Cash advances on credit cards are done all the time at many retail stores. The option usually comes up on the credit card terminal every time I use a Discover card.

jrsjerky

MDR =Merchant Discount Rate, or fee that the merchant is charged for the transaction. The OP is showing that the company he works for is not being charged a fee because the transaction is being coded as a cash advance.

MJLouise

Where do you live? I've never seen this as an option. I assume the usual cc cash advance fees apply?

jrsjerky

I live in Texas. I know that Discover cards do not charge the cardholder any fees or interest to take a cash advance from a retailer if you pay your balance in full. I know because I have done it. However, you do not receive any points/cash back on cash advances. I am not sure if any extra fees/interest are charged if you do not pay off your balance in full when due.

While I said in my previous post that many retailers allow the cash advances, I meant with Discover cards, maybe not with V,MC or AMEX.

spankytoes

You don't see how 100 gift cards at $50.00 each run in succession of each other wouldn't raise flags with Visa? You don't see how this would worsen as it is done on a weekly basis by the OP and his boss?

The IRS would disagree with you.

Astrophsx

????

I feel that your scheme is lacking some major details. I don't think you are being totally upfront... as I find it very hard to believe that a store stocks the quantity of cards needed to allow one person to purchase $32,000 worth of cards. That's 640 gift cards... how many stores would one have to visit to purchase that many cards? 20-25 stores?

Not even going to talk about the whole cash advance using a POS and having the money put into one's pay check.. but don't you find that there could be a huge risk if your boss decides one day not to allow you to do this? Or say for some reason you are no longer able to cash out 100+ $50 gift cards?

Sounds time consuming with a lot of risk. Not to mention you are bringing this into your workplace...

jrsjerky

I didn't address the issue with VISA. I do think it would raise flags with the businesses credit card processor if taken to extremes. That is why if I was doing something like this it would be slow and steady. If you had a business that did tens of thousands of credit card transactions a year, these transactions would never cause any IRS issues.

I am still unsure that the OPs scheme is legit. However, I have been doing something very similar through a business I own and his post has opened my eyes to something I need to research concerning the operation of my POS.

AA_EXP09

Do you think I'm buying 640 cards all at once?
No.
The $32K was processed over all of December!
And in December, I not only used Safeway, but I also, used Petro Canada to get Petro Points.