Nothing illegal. Yes, bank 2 is out of $30, but bank 1 gained $30, that's why visa and MC rule require merchant to refund to the original card to prevent this type of problem. However, there is a loophole here since you can buy the item, pay off bank 1 and cancel the card, then return the item, since the original card no longer exist any more, the merchant have no choice but to refund to a different card.

I recall getting a refund to a different card at Lowe's, although it was a year or two ago. I wasn't trying to do anything on purpose, just had switched everyday cards as I recall and didn't have the original purchase card with me anymore. I actually mentioned this to the clerk, she said "Well, let's try it", and it went through fine. The amount was small, though. And as it was a bit of time ago, it's possible they've tightened things up in the meantime.

I think the biggest issue in trying this (apart from any moral issue) is that of an unconnected large refund. I have to think that would trigger some kind of alert somewhere.

The problem of getting a negative balance refunded is also true, although you can mitigate this by using a debit card for the refund. A signature-based transaction on a Visa/MC debit card should be the same as one on a credit card. That refund would go right into your bank account, from which you could pay the original charge.

Another problem would be with trying to do this on an ongoing basis. If you become a frequent returner, some stores will cut off your return privileges. In some cases, as I recall, such info can be shared with other stores. So you can't necessarily just go around returning forever with impunity.

In general, it's probably more trouble than it's worth, which is yet another reason why this practice isn't widespread.

As a former federal prosecutor for 6½ years, I can confirm that this is correct.

See 18 U.S.C. § 1956 (money laundering) (requiring transaction to represent the proceeds of a specified unlawful activity).

amex
 

the thing is working with amex.

you can pay for example a 10K item.
the points will be credited to your MR account after a 3days.

you can transfer them out and than cancel the item you bought.

you will get a - xxx amount of MR Points.

i dont know if amex lets you cancel your cards if you have a negative MR balance :)

dp

The answer to the above question is "it depends." I have encountered three types of returns:

1. Refund to original card: no card needed (receipt was scanned)
2. Refund to orginal card: orginal card required and refund receipt created
3. Refund to any card: no card needed if refund going to original card. Card needed if refund to different card.

I believe situation No. 1 is becoming more popular because if your spouse bought something and you returned it, you're stuck if you don't have your spouse's card.

Most responses here have addressed the legal/moral issues, but not the practical. Are you going to spend time every month finding large-dollar retailers that allow refunds to different cards?

Someone told me that they bought and returned like crazy at an REI store because they didn't really know what they need and because the sales people encouraged them to do so. After a while, they got a letter from REI telling them that may be they need assistance from sales people. Then a customer service rep at the store gave them a dirty look and said the store will soon not let them return anymore. Needless to say they stopped buying and returning and feel very much like a criminal.

My question is about the fllagging thing. Are they being flagged as a criminal or something less than that? Why? And will the store ever lift the flag? Or it's with attached to their account forever even after they only buy and not return?

Someone told me that they bought and returned like crazy at an REI store because they didn't really know what they need and because the sales people encouraged them to do so. After a while, they got a letter from REI telling them that may be they need assistance from sales people. Then a customer service rep at the store gave them a dirty look and said the store will soon not let them return anymore. Needless to say they stopped buying and returning and feel very much like a criminal.

My question is about the fllagging thing. Are they being flagged as a criminal or something less than that? Why? And will the store ever lift the flag? Or it's with attached to their account forever even after they only buy and not return?

There was a discussion on a NJ Radio station a while back how Target is not letting "Frequent Buyers and Returners" keep returning things. They are asking for DLs and if you are profiled you cannot return any more.

They also will only put the money back on the charge card it was charged against. SO you in efffect could not charge up a storm on a mileage earning cc and then return it on another cc.

Cheers

NO< every retailer that I know of will only refund on original card

[QUOTE=sany2]IT IS FRAUD!

Yes, we do and we freeze the merchants account immediately. Sometimes they no longer get money transferred to them for any transaction for up to 6 months.

Refer to the federal bankcard fraud statute.

I remember when VI & MC were above 5% for everyone.

Here is the American Dictionary definition:
fraud (frôd)

NOUN:

A deception deliberately practiced in order to secure unfair or unlawful gain.
A piece of trickery; a trick.

One that defrauds; a cheat.
One who assumes a false pose; an impostor.

I'm sorry to the lawyer that thinks "fraud" is only a legal term, it is not. It is as stated above. You will be deliberately practicing a deception in order to secure UNFAIR gain. And as such would be a "CHEAT". You are costing the business a percentage of the transaction and a transaction fee when you make the purchase. You are costing the business another transaction fee when you return it. You are costing the bank a percentage to one of the credit card associations. If you do this, and they let you, the employee just violated the T&C of the credit card agreement. You just violated your T&C of your credit card agreement. Just because you could be killed and ground up in a meat grinder, cremated, and your ashes sprinkled in the south pacific and the perpertrator never gets caught does not make him innocent!

No apology necessary, for I never stated that it is only a legal term -- just that it is a legal term. I was specifically responding to these posts:

[QUOTE=psyflyer]Both of these posts use the term fraud in its legal sense.

I actually had the inquiry done for my business because the purchase from the night before had not been posted when the request for credit came in the next morning. The amount was under $200. The customer placed the order about 5:30 and changed his mind the next morning. Since the machine had "batched" the previous days sales, I had to do the refund as a Credit rather than a Void. It set off alarms at the CC company and I had to explain what happened.

---

FWIW, though I rarely return anything, that has also been my experience.

Mark

Why not spend the time you did to dream up this scam doing something productive like volunteering your time to charity or if that doesn't fit your lifestyle, work a little harder on an honest venture that will net you the money or miles you crave. People that scam their way through life eventually end up in bad places.

Since the retailer pays a cost to the CC issuer they are loosing money on this. For customer service it is allowed but if you did it too often it would probably not work out for you. But I suppose 1 or 2 a year like this would probably not be a huge deal.

So how about buying $1000 worth of gambling chips at an online casino, having a few spins of roulette, and then cashing out your money into your bank account. Would this work? Would cc companies let you do this?

From the little bit of experience I have had with online casinos, it is highly unlikely that you would be able to do this. Most credit card companies will not accept the charge in the first place. If they do, there is most likely a service fee (through a third party provider).

In fact, many retailers now don't even ask for the card when you make a return. They scan the receipt, pull up the original sale, and credit the original card. If you don't have a receipt, you can usually only get a store credit.

Nordstroms has gone so far as to put a scan sticker on the tag of every item at the time of sale. My wife was able to return something without the receipt and still have it credited back to the original card without presenting the card again.

AMAZING! i get crucified and talked to like a little kid for even asking about how i can sell an award ticket on NW airlines because i cannot find a ticket from my home city.......but this obvious scam of stealing miles is condoned by so many in this thread

or good places. see "Catch Me if You Can" ;)

Cheers

Glass Houses
 

WOW! Thanks for all the thoughtful replies.

As for as the moral issues, I find little difference in my “scenario” and the seemingly “approved” practice of opening a new CC account, making a single purchase and then closing the account to reap the miles. Or likewise the “approved” practice of doing balance transfers at zero interest for the sole purpose of gaining miles AND drawing interest on the transferred balance.

People who live in glass houses shouldn’t throw stones, right?

Pecking on others is just part of human nature (and that of many other animals as well). Try not to let it get to you.

For me, there is a significant difference is these situations. The retailer is trying to do right by the customer, so it might have a lenient return policy to give you the benefit of the doubt. In its efforts to keep you happy it might fail to properly match up the charging card with the one to which it will credit. That oversight might end up costing the retailer some money.

The cc companies, however, are essentially saying "try this card out and we'll give you a bonus". They know full well that many will just take the miles, pay the annual fee and close the account. They're just hoping that enough people who keep the account going will more than offset those who close it early. Also, keep in mind that the annual fee you pay probably comes pretty close to the cc company's cost of the miles.

So, the difference is one business is fully aware of what you might do with respect to miles, but it rolls the dice. The other has no idea what you're doing with respect to miles, but it's trying to keep you happy. Personally, I think it's abusive (morally, not legally) to take advantage of the retailer here.

Anybody with a generous promotional offer who doesn't require any "attached strings" or what is otherwise known as fine print is asking for what they're getting.

One problem here being that you could then, having received a refund to a second card, then dispute the charge with the first. As a merchant, I've seen this scheme a bit too many times...

Now that this thread has resurfaced with the above comment, it brings up another question. If the merchant has the signed credit card form and imprint or scan of the card with the original purchase, how can a customer get away with a dispute of the charge? My only guess is that the merchant can't trace the credit back to the second card even though the customer claims he returned the goods? But a check of the credit card activity by the merchant around the supposed return date should find the credit to a different card. Maybe I am missing something.

I know "someone" who used to do this years ago. The reason he started was because he had been a loyal AA casual flyer for years and had accumulated about 60,000 miles towards his goal of two RT tickets to Oz, when AA changed the rules of the program (circa 1989). With only a couple of months notice and a Citibank AA Visa, he went to an upscale department store and bought jewelry (high price but fits in the pocket, as opposed to furniture which bulges in the pocket) and returned same with another card--all in an effort to get to his mileage goal. His rationale was that 1) Hey, they changed the rules in the middle so screw "them" and B) It appeared to be a victimless act.

After giving it much thought all he could come up with in terms of "victims" were the banks. One got fees and the other paid them out upon issuing a credit. His heart was not bleeding for the banks.

Then, one day, while returning a tennis bracelet a (not so bright?) clerk said to him "Oh, you're the guy! There was a memo circulated about you buying and returning jewelry." Apparently they were perplexed because their focus was on someone potentially switching stones or something. In any case, he had reached his 100K goal and felt that, given his notoriety, it was time to cool it.

Back then, stores did not have systems in place that keep track of what card was used for a given receipt. You can tell which ones do now because they are the ones that don’t even ask for your credit card when you make a return (Best Buy and Target come to mind). For the rest is it a manual process to “notice” that a different card is being used. He still does this on opportunistic occasions but doesn’t go hunting for opportunities. For example, a few weeks ago he went to exchange something he had bought on a rebate card. It was a $100 item. Instead of using the original card he returned it on a non-rebate card and made a new purchase with the rebate card again. In affect, he got a 10% cash rebate on the item (2 x .05 x $100).

There are not effective systems in place at the bank level to tie credits to purchases. In a case like this, for a relatively small amount, like $100, it’s a simple matter to call the back and ask for a check. If you do not call, last time I checked, Regulation Z requires that a check be issued automatically on a persistent credit balance over 90 days. Automatic processes are always nice because they avoid the human scrutiny that can occur when calling a CSR, but for a $100 credit on a card with reasonable volume, they’re not going to track it to a specific purchase. It’s a needle in a haystack. On the other hand, a large automated credit check being issued will undoubtedly show up on an internal exception report and will likely come under some scrutiny.

Anyway—that’s what my friend told me.

has anyone verified if costco returns to same credit card for online purchases? if I bought something from their website and returned instore, would they credit the same card or do they have a different return process? What if I told them I lost the original card and this is my new one, as long as its still an amex? (I have 2)

I have done somethng like this many times. I will open a credit card, I always receive very high limits, such as 50k 75k. I then purchase several refundable F tickets on UA or AA (they give faster refunds), wait until the miles post on AA, Starwood, etc. Then refund the tickets and close the account leaving only a negative mileage balance with the credit card company.

I recently did it when I needed 70k additional airline points and 40 starwood points.

works like a charm!

I've looked into the fees to paypal myself 10,000 FROM my UAL card into my paypay account, then paypal puts it in my bank account, then I pay UAL card, but it ends up being way too much money, and I might as well fly somewhere and gain the real miles plus the UAL card miles

If you really want to shop get into consignments, or buying things in high qnty cheap and selling them on ebay or the likes, you may make a bit of money on the side as well as accumulating miles

Wow, nasty! I hope airlines clamp down on this activity aggressively.

If you have to ask....

Same here... no ill will intended. But I returned a big ticket item to a large local electronics store. Silly me, I forgot my card. Rather than trucking back home, the cashier allowed me to use another card for the refund, and the only other card I happened to have on me was my bank's debit card. The funds were put directly back into my checking account, and I kept the miles.

Thought about it,, but never did that again, intentionally or otherwise.

Miles for balance transfers?
 

Getting miles for a balance transfer (or cash advance, for that matter)? Which banks/cards? I'm not aware of any (at least in the US). As far as taking advantage of zero interest loans, nothing wrong with that! :D

Not sure if this is still the case, but in the past the FirstUSA/BankOne/Chase United Airlines Gold Visa awarded miles (at the rate of 1/2 mile per dollar) for using their "convenience checks". Some months they would send special convenience checks with the 3% fee waived and you could write the check to yourself, deposit it in your bank account and then immediately make an online payment the day the charge posted to your Visa account. If you timed it just right, there was no interest so the miles were effectively free. I believe that they had a 10,000 mile annual limit per card on the miles you could earn this way.

Believe me--they would if they could. They don't have the systems in place and until they are able to track items right down to the serial/item number level its impractical to expect that they will. If you buy $100 in groceries on one card and $10 on another, then return a carton of milk, who's to say (at the bank level) which purchase it came from. I'm sure they will get there someday as the brother gets bigger but they aint there now and as I said, given how they shaft the consumer at every opportunity, my heart doesn't bleed for them when I find our a few clever folks find a way around.

So, instead, they stick it back to the merchant and put the responsibility in their merchant agreement, telling them they can lose their ability to accept plastic for non-compliance. The Best Buys of the world that sell electronic gear with serial numbers can incorporate this into the POS systems and relate specific goods to a specific credit card purchase. Smaller stores or stores that sell non-serialized items (such as socks) have a harder time. It requires manual scrutiny of the receipt. Enjoy the fun while you can because when RFID ( www.spychips.com ) becomes the prevailing POS and inventory technology (sooner then you think) even socks will have a unique number.

Someone mentioned Costco. Costco uses the manual scrutiny method. It’s hit or miss as to whether or not they will notice a different account number—depends on all the usual factors (how long the line behind you at the return counter is, whether or not the phone is ringing, IQ of CSR (though Costco tends to hire bright people, unlike Wal-Mart, et al.)) What they do tend to notice is whether or not you are asking for cash vs. a credit to your card when you bought someone on your card. If you show no receipt you get a store credit card now—they used to give cash.