All of these scenarios describe loopholes that were allowed within a system. No one taking advantage of any of these did so knowing full well that they were violating the terms of a store's merchant agreement and own policy re: the sale of an item.

And, FWIW, my purchase of any of these three was limited, in that out of all of them, I only bought renewals for three magazines that I subscribed to anyway. That doesn't mean that I won't avail myself of a fare error when it shows up - but I think that the two are not comparable because a published fare, generally available to the public, is not the same as a scheme that forces one party to break a rule to do so.

:rolleyes: I can't force you to stop what you're doing. But if you need to justify your behavior in front of us, go right ahead.

How about no and no. As I've stated before, the issue is the fact that this behavior is predicated upon the notion that the transaction should not be allowed under the merchant's rules. It doesn't matter to be if the store is Meijer or a party store in East Lansing, Michigan.

The fact of the matter is that people know that it's against the rules, yet they persist on doing it. And that's what galls me.

:rolleyes: I think this proves my point about you needing to justify an activity that you know is wrong.

Mike

He IS David Spade and this IS a Capitol One commercial! I knew I liked that card! they have it right and we have one amoung us. Argahgghhg

1) it is allowed, whether it should be or not. Terms say use the card, so we DO! They change their rules on us, we just wanna use the card and use the card. What we get out of it is NOT wrong. Whether that be a porn video rental or a bunch of flowers for the wife. How is knowingly getting miles any different?

2) did you know they call it LANSING because if you look of the shape of the city on the map, it actually LOOKS like the resulting splatter of what happens when you LANSE a boil?

why? Why do you care what WE do?
Besides, nearly everything that's done in the world of faltering FF progams is breaking a rule somewhere. And don't go telling me you have NEVER broken ANY rules! I aint buying it, nor would I like ya very much if you were such a goodie two shoes!

;)MM

So if I go into a store and ask to buy a money order and pay for it on my credit card, why is it my job to think about whether the store is making a good business decision? By that logic, why ever pay for something at a store with a credit card, since the owners lose up to 4% or potentially more on the transaction?

For whatever reason, some stores and merchants have decided that incurring credit card fees as part of the cost of doing business is, in fact, good for business overall. A business pays roughly the same percentage of the purchase to the CC company whether I'm buying milk, money orders, or gasoline and has decided that the cost to them for doing so is worth the profit that they are earning on the transaction overall. The profit earned on a money order sale is the fee they charge you for using that service. They may also decide that taking a loss on the money order sales is worth it to get that customer in the store to buy other stuff for all you know. It's a common enough practice.

It is ultimately up to the business to determine if they can make money accepting credit cards as payment for their products or not. If you feel that your local mom-n-pop shop has overlooked this and want to help them out, then you should explain this in detail to them, by all means.

I don't think that Mike's post above is wrongly 'holier-than-thou' or whatever others are insinuating, but I do not think that it is particularly informed. I think it's good to have this debate, but in the end, it is up to the merchant to seek what is best for the merchant and the customer to seek what is best for the customer.

Q: Is buying a money order with a credit card an illegal transaction? If so, where?

peace,
~Ben~

As someone who formerly worked in retail (in a store that sold money orders, mind you) and who currently owns a small business on the side, I don't think I'd call myself misinformed on this subject. Nor do I think it's particularly polite to call someone misinformed simply because you do not agree with them.

It is, however, significantly better than the flaming I've otherwise withstood in this thread and other threads on similar subjects, so I will digress.

I never have disputed the fact (nor will I dispute the fact) that credit card merchant fees are a cost of doing business. A certain percentage of any transaction is built into the cost of the good, anticipating that it will cover the credit card merchant fee.

Where your analogy falls, though, is that the sale of money orders by a third-party merchant is not the same as simply buying a gallon of milk or a loaf of bread. When a person buys a money order (say, for $100), that $100 gets passed onto the issuer of the money order. The extra fee (which is often set by the issuing bank) is all the profit that the merchant will see off of the transaction. They do not get a percentage of the money order - only the 50 cents or a dollar flat fee (or whatever) that is charged for the purchase.

A store selling $10,000 worth of milk makes a percentage on each gallon of milk, because they derive revenue from the entire price of the milk. A store selling $10,000 worth of money orders, however, will only make as much money as the number of money orders they sold. If the fee is $1, they'll make $1 if that came in the form of 1 money order, and they'll make $100 if they sell 100 money orders.

If the store has a 20 percent margin on milk, they'll have $2,000 in profit, which is more than enough money to cover any fees. Were the store to accept credit cards for money orders, however, they'd be paying 2 or 3 percent of the $10,000 in money orders - not just the fee. In a good-case scenario, the store that made $100 off of fees will only lose, perhaps, a hundred bucks in merchant fees. Someone wanting to buy thousands worth at one time, however, will buy them at $1000 intervals, not $100 intervals. Therefore, the loss that is incurred is much greater - 10 $1000 money orders will only net $10 in fees, at a loss of $200 or $300 in merchant fees.

I am also fully aware of the concept of the loss leader - bringing in people and selling them a low-cost item with the hopes that they'll buy more and more merchandise. However, this is not a loss leader that they can avail themselves of, contrary to this statement you made:

It is not up to the business to decide whether they should take credit cards for money orders, because they are not generally supposed to be doing it.(See below.)

The transaction is not illegal. It is, however, a violation of the merchant agreement of nearly every single money order issuer in the United States. (Those that explicitly do accept credit cards, such as BidPay, pass along the percentage fee to the purchaser). This is for a couple of reasons:

1) It's an easy target for fraud. A stolen credit card (which is fairly traceable) can be easily converted to a more untraceable form, with no real means for recovery of the goods.

2) It easily allows for the circumvention of cash advance policies set forth by credit cards.

I tend to believe (especially given the BidPay example) that the disincentive of credit card fees is part of the reason as well. Money order companies want their merchants to make money off of the transaction - if the merchant doesn't make money, there is no real incentive for them to sell them, and they'll move on to something else. And the fewer merchants that are selling the money orders, the less that the money order company makes.

(That is purely speculative on my part - but I do believe it may play some part in the decision.)

For the final time in this thread (because I'm sick and tired of being attacked for having a contrary opinion), my issue with any scheme that comes up on FT has to do with whether any rules were broken to get to that point. I don't have a problem with loopholes or deals that work within the rules and the framework of a program or a business.

For that matter, I don't have issue with the fare errors that come up here. Mistakes happen, and people need to be responsible for them. If I screw up the pricing on one of my items, I'll honor the price. This is not only the right thing to do from a legal standpoint, but I think it's the right thing to do from an ethical standpoint. In other words, I screwed up, and I'll make it right.

This one, however, is predicated on the fact that the consumer must violate a policy - to go outside of the rules - in order to gain benefit. As a small business owner, I have no sympathy for schemes - deliberately designed to flaunt the rules or policies - that ultimately cause businesses to lose. And, to that end, the consumer will lose as well, since businesses will generally raise their prices on all goods to correct the inefficiency elsewhere.

Mike

Can we just close this thread and you people can open another one on the ethics of FT in general. Then people will have a chance to not read it. :_)

Nako,

I think you are way off here. If the merchant allows it, then its fair game. Thats what happens in a capitalistic envinro.

As for the people who claim its OK to go after WalMart or some other big company because it is faceless but not OK for a smaller store? I dont understand your logic. Wrong would be wrong no matter how large the company. So it would be wrong to do it to everyone or OK to do it to everyone. Size of Corp should have no bearing on your standards.

I happen to feel, if they allow it, then its OK.

As for earning miles. Its not illegal to buy a MO or cash instrument with your CC. However, they dont want to allow you to earn miles or points with those purchases. And they would like to collect a cash advance fee. Same with their cash advance checks ( most dont allow for mile earning, unless you pay that 3% fee).

Ken in Phx

Some very good points overall. I disagree with a few and stand by my earlier reasoning. I never 'flamed' or personally attacked you in what I thought was a thoughtful and reasonable response that I wrote. I hope you don't take my continued disagreement as a personal offense.

Look - I agree that if I were running a business I wouldn't do it either. My point was that if the business is offering a product/service and I offer credit card as a form of payment and they accept it, then why am I the bad guy that is doing something inexcusable? It'd be one thing if I did something nefarious like deceived a clerk into doing it, but if the money order place says they accept credit cards and I decide to pay with one, how is that unethical on my part? Businesses make offers on their products and services all the time that are undervalued, but have myriad reasons for doing so such as attracting new customers, maintaining current ones, generating more sales, good publicity, etc.

Your post goes on at length and lays out good reasons why a merchant shouldn't sell money orders for CC payment, but it seems to me that in your scenarios, it would be the merchant selling the money order that is the one going outside the rules you noted -- not me, the consumer who is offering in good faith a form of payment that is accepted. So yeah - a horrible decision on the part of the merchant (and maybe unethical of them), but unethical and inexcusable on the part of the consumer? No way.

Then again, the OP never wrote exactly what their modus operandi is for this, so we can't really debate the ethics of what is actually going on in detail.

peace,
~Ben~

I agree. Let's drop it and figure out how to make this baby work for us.

peace,
~Ben~

Its Time to Close the Thread
 

It's turned into an ethical debate and no longer has anything to do with FF Miles. We are serving no further purpose by continuing.

the money order thread would have been better suited for the credit card forum where a certain visabuxx thread in that forum has similar debates woven throughout.

Anyway, Nako, I have to say I do agree with much of what you say and the way you put it. BUT I think you need to know that many of us are not trying to trash you just because you have a different opinion. You just need to understand that, like email, a forum text is often not fully communicating the writer's full intent (icones or symbols or emphasis on words or phrases we speak in here are not always communicated or known how best to communicate in text format by all persons writing them)

SO some of what you said is agreeable to me, but I do have to say that in the world of miles, I have to cheat to win. And I admit this openly!

Is it wrong? maybe. But look at the one-sided obtuse ways of the airlines who market their false, and value-less product that hardly works for all people who get suckered into getting the mile product!

So yeah, I find tricky ways but it aint fraud. I cheat but I do not steal. Many of us do. I dont want to put someone out of business (except a scammer, or maybe points.com because they are one) but I also do not want to lose and I, as a consumer, have increasingly found it harder to NOT lose unless I amso tenacious that one would perceive me as someone who would want to put the other side out of business even when I don't!

Does that make sense?

We have to fight for ways to live!
And it is no more so true than in miles land! We have to fight--to keep up with changing rules, upping of award level requirements, and everything involving redemption. We have to fight to get half of what we want, and we fight a lot harder than some lazy store clerk who doesnt even know why he still sells money orders anyway! So, by gosh I will be seeking out and exploiting ANY WAY I CAN to get those darn miles and if money orders is one way, then I will use it til it dies!

At work, you show up and get paid and do your job and hopefully it puts money on the table. There are advocacies and resources to help maintain that theory of life's necessity. But with miles, we really only have each other to rely on for ways to get what we need to live. That being said, this thread's debate of what is right or wrong IS about miles, and the whole money order issue is one way to get them, so I WILL get them and this forum will hear about it!!

I will scratch and claw at every way I can to get them, in fact, and so will all of the people reading this, Nako included.

You (Nako) said two things that can be disputed that relate to this:


The transaction is not illegal. It is, however,
a violation of the merchant agreement of nearly
every single money order issuer in the United
States. This is for a couple of reasons:

1) It's an easy target for fraud. A stolen
credit card (which is fairly traceable) can be
easily converted to a more untraceable form, with no
real means for recovery of the goods.

2) It easily allows for the circumvention of
cash advance policies set forth by credit cards.

my reponse to #1 is this:
We are NOT trying to do fraud and we can prove it to CC companies that say we fall into that same category just because we churn gift cards and money orders. All we have to do is continue to tell them that we are more than willing to disclose our entire lives and that all we want is miles (not that I will, of course). For example, a CC company has alllll my info. When you sign up for a money order or gift card, you have to show ID or give alllll your info. Why then, does anyone think I am frauding? Why, because it LOOKS that way to some unknowing person who sees all my money order transactions? What if they just DID THEIR JOB MORE THOROUGLY and separted us and our transactions from the REAL fraudsters. We have to pay for what we do and we are more than willing to do so, and we tenaciously find ways to get deals, but they call it near-fraud. Why? Because we are good at it? Is that right? No.

We are BUYING money orders WITH our legal tender--be it cash or gift cards or debit cards or credit cards! How is that fraud? If they think it looks like fraud, that is wrong and we should be mad at them for accusing or assuming that is what we are.

banks love to use this excuse--and they are duping all of us by doing so--because that's their easy way out of a deal they know the F**K'd up on! they should instead FIRE their marketer and serve the economy by giving a better person the freakin job! There are some dummies with jobs out there and as a recruiter for martketing professionals, I know of a few great candidates who SHOULD be working who are not! that's because dummies run thinsg some times. I mean, look at the US itself! (ha ha)

My response to #2:
Yup, that's right. But you said it: we circumvent the policies... We aint breaking them as they are written. We ciurumvent them! It IS a loophole, which you also said something about in your post. It just lasts longer than a one-off fare mistake, that's all. Still, NOT WRONG on our part to take some of this pie while it's there!

Lastly, why do stores like these even offer money orders? Maybe they should not. But i am glad--as I'm sure Ingy is--that they do! (And it's not Ingy's fault this is a big debate. it IS a good thread! thanks OP!

!MM:)

I fully recognize that most people are not doing that. At least one person, however, chose to do so, simply because my opinion didn't agree with theirs.

As many other people have pointed out, this debate is reaching a point where very little new can be said. The people who think that this is fine will not agree with the people who don't. I do want to take issue with things that you posted here, though:

Whether you like it or not, credit cards are not money. The Federal Reserve Bank's definitions of money - M1, M2, and M3 - do not include credit cards in them. To call a credit card (or, for that matter, a gift card) "legal tender" on par with convertible forms such as cash or a debit card (which are both M1 money) is a specious argument at best, because they are not one and the same.

Also, note that I never said that people who were trying to earn miles were engaging in fraud. I merely mentioned fraud as a reason why money orders generally cannot be purchased with a credit card. Any person with a stolen credit card could, in one fell swoop, empty the limit of the credit card and convert it into a form that is significantly less traceable than the credit card - and much, much easier to spend without being caught.

Again, this is trying to use a non-comparable situation to justify something completely different. Fare errors are not predicated on the fact that someone must break a rule. Using credit cards to buy money orders are against the rule of the money order supplier. To do so, therefore, breaks a rule. If a money order seller is not allowed to take credit cards to sell a money order, then by extension, you are not allowed to use one to buy a money order, either. The rule doesn't just apply to one party. It applies to both.

It doesn't circumvent a rule or take advantage of some sort of loophole. It flat-out violates the rule. And it saddens me that people have so little regard for rules that they think it's just like taking advantage of pie while it's there because someone knows they're not supposed to be doing something, but they do it anyway because they can get away with it, even though they know that someone is losing hundreds of dollars or more because of it. In my opinion, it's no different than walking into the store and stealing the pie.

That said, if the moderators are going to lock this thread, they should also delete it. To merely leave it locked stifles other people from engaging in a debate that is, I believe, important regarding the legitimacy of schemes such as these.

I'm now officially done with this thread.

Mike

well Mike your arguements are well put so I can at least say that.
Dont be done with the thread because it may upset you (and if it does, I am sorry it does) but rather, let's go back to the original issue at hand.

the original issue was this:

Poster found a place to buy MOs with a CC.
We all wanted to know more.
It spun into a debate as to whether that action should even be allowable and some who are new to the entire concept began a debate about it. Some who are savvy to it, responded and some just chimed in not knowing what to do about it.

BUT the original issue is still there: you can do it at some places. Illegal or not, breaking policy or not, it can be done. And I guess I have to side with the camp who believes that if the store is waving its flag begging me to come in and buy milk for a $1 and then grab a Money order in the same CC purchase, I guess I'm goin in.

Nuf said.
Again, i have found none in my area.
I live off Rte 128 in the North Shore of MA now, and I work in Charlestown, right next to the city of Boston. I have not looked everywhere but if I find it I will do it.
:)MM

IMO opinon Fraud would be if you know the worker and get them to put it thru on a CC which they arent suppose to. the fact that a place will accept it even at a loss, well if it is a small biz owner then they will be hands on and would see if they check everything that its costing them $$ instead of making $$. I had a small biz, single retail store many yrs ago and believe me I knew which vendor would cost me the least amount for each item and ordered accordingly. Sometimes if I had no choice the one who charged more got it cause I needed the item.

So even if the OP is using a Small Biz, as long as hes not doing anything other than walking in and requesting MOs and gives his CC, theres nothing wrong with it,IMO. Its not up to me to alert the store owner/s that they are charging less for an item then everyone else even if I know that they usually charge alot more per item than everyone else. Maybe they have someone who prices things but if they dont have a system of checks and balances (as I had) then they dont belong in Biz. AGAIN Im not talking about where you have a friend that although the item is marked $X rings it up for less or even worse doesnt ring it up at all and just places it into our bag. Im saying its up to the Biz owner to be on top of things and if they arent thats their problem.

I dont believe its Illegal to go in and try to buy an MO with a CC, as alot of posts have stated where it was once possible most stores policy is Cash or Debit, if there are stores that will sell a MO via a CC thats not my problem.

I have never done any of these Gift Card or MO runs ever. I didnt want to put the time in, sometimes having to wait at a post office can take upwards of an hour bet finding parking to waiting on line.So I felt it wasnt worth it time wise for me. BUT if the OP is doing it legit or anyone else then keep doing so till it no longer works for you.

Its a good method of fishing for PMs relating successes at various stores and their locales.

never mind things changed