Out of curiosity, I was looking through PayPal's and eBay's websites. I just wonder if anyone has had the nerve to post a fake auction for $5,000 that offers Anything Points (which can be converted into miles using Points.com), and "purchase it" using another eBay/PayPal Premier account and pay with it with a credit card (earn more miles for that). Would it even be worth it to do part or all of this?

How soon would they catch you and would they close your accounts?

I've recently took a look at the PayPal website more closely. PayPal certainly now looks like a bank. One can keep money in PayPal in five different currencies, and use the service to transfer money between banks, and it is even possible to transfer money between banks in different countries, although you might need two different personal PayPal accounts to do it, with the other needing to be registered to a "user" in the other country. It looks like the service could be used for money laundering.

But my interest here is could it be used for earning miles, or would I just end up being thrown off their service and/or eBay?

You will get your account flagged in a minute and the money will be "held" by PayPal for 6 months before they release it.

PayPal is NOT registered as a bank. Their customer service is absolutely terrible if you do not have an account manager. Then it is bearable.

Sellers have to pay $.01 per point, so in theory it should work. I think it falls apart when you figure in the paypal fees (2.2% for a cc) and the ebay fees (about 1.75% for a $5,000 transaction).

That jumps the cost of 10,000 points (5000 anything and 5000 from your CC) to about $250 [$50 for the anything points, $89 for the ebay fee (including listing), and about $111 for paypal (including the initial $.30 fee)]

If you did it with cash, 5000 points would cost about $140

Not that great.

A better deal is to make priceline bids for rooms you don't intend to use. You can bid a 1* hotel in Orlando for $20 ($28 with all fees included). A successful bid gets you 1500 anything points. So, 3 bids would net 4500 anything points, and would cost $84. The upside is that you woudn't have to worry about the paypal screwing you over.

If you have never sold on eBay before and never used PayPal and suddenly there is lets say $10K transaction you bet that the transaction will get flagged.

You can always "recover" the eBay fees by mutually cancelling the transaction. You will always have to pay the PayPal fees of 2% to 3% + the eBay Anything Points fee. I don't believe that this would be a good way to get miles IF you have to pay the PayPal fees.

I'd bet that you'd lose the points if the transaction is cancelled.

There may be some ways to get around some of the eBay limitations. Last time I checked, they had a flat fee for certain transactions (Real Estate and Autos, I think). These would tend to be higher ticket items also. The 2.2% Paypal percentage is for high volume customers. Normal customers are closer to 3%.

You can get a paypal debit card and it cuts your paypal fees in half as the seller, if that helps.

You also can drop e-bay out of it totally and just paypal it and not have any e-bay fees, I can send you a paypal invoice for say $5,000, you pay it. I can then use the PayPal Debit card to buy a Walmart Gift card (to get half my paypal fees back). I send you the Walmart card, and you can search any of the seven million threads here to find out which store you can take it to and get cash.

You can't get the Anything points if you cut ebay out.

For what you're suggesting, why not just go down to walmart and buy the giftcard?

The fees hurt. And, additionally, Anythingpoints aren't worth very much. When Points.com was offering double points plus a 25% bonus for transfers to AA, for instance, that was a good deal. Without that, eBay points are worthless, IMO.

(edited to add) I guess this month points.com is doing a double miles promo with US. I wouldn't want to put any miles into my US account. . . however.

There is a massive thread (hours of reading) in the AA forum titled "$0.01 per mile" that shows how a couple of people got lots o miles from buying Anything points. The description is in the first 10 pages of the thread.

Paypal caught on, and it appears that it is specifically prohibited.

eBay Anything Point is worth exactly 1 cent when you buy something on eBay and use your PayPal account to pay. Not worthless, IMO.

I meant in terms of turning them into miles, as the thread title suggested.

The standard eBay -> airline transfer ratio is 1 point = 0.4xx miles.

Ebay Anythingpoints are currently worth about 1.125 Asia Miles each. It was 1.5 miles per point during the recently expired double promo, but the standard exchange rate has been increased since then. I've never collected Asia Miles, but they are reported on the FT CX forum to be quite valuable and can be used for upgrades on Oneworld partners.