Whoa. Can some please tell me if I have a reading comprehension problem here.

Admittedly, Marathon Man's posts, are, well, marathon in length and I may have missed something.

What I think he is saying is:

1) If the stores policy if to give back cash for small items, or partial items, returned bu purchased on credit.

2) -and- you participate in this transaction as part of your day-to-day activities. i.e. the transaction wasn't entered into only to earn miles.

then there is no problem. ???

I say "let your conscience be your guide". If you have to rationalize what your doing then maybe its not a good idea.

My question, after thinking about some of this is, has anyone actually enrolled in a college on a credit card, just for the purpose of dropping-out before classes start, to get a cash refund and the miles? Which college was this that offered 100% refunds in cash?

In California, here are my thoughts for public colleges. All might give cash refunds for at least part of your fees, if only because they process so many partial refunds, many months after the initial charge. It's probably just easier administratively to do that.:

University of California: Highest costs, but forget it. A very competitive university system to get in and stay in. I couldn't imagine a student doing this to get miles and then later thrown-out for making no progress toward a degree in a timely manner.

California State University: Medium costs (where I graduated from). Some campuses are harder to get into than others, but more relaxed requirements than the Univerisity of California. More tolerant to students who drop-out of classes and keep returning, but in my CSUN catalog, it does explain they can put you on probation, or eventually disqualify you, if you keep doing this. One could also enroll via university extension, but Extended Learning departments are run more like a business, so they might be more likely to submit refunds back through the credit card company.

California Community Colleges: Only $11 a unit, plus maybe $30 in student fees. These fees are sure to go up next semester, because of California's budget woes. But even if you registered for 20 units each semester (a huge load of courses) and dropped-out before the term started, the most this transaction would come to is about $250. Hardly worth it, even if you could get all your money back in cash. And it is true signing up for classes you don't plan take, may prevent another needy student from getting in, since you've taken up a slot. Even if you did enroll in the least popular courses, still there are easier ways to earn miles, than waste a college's resources doing this nonsense.

[This message has been edited by burgerwars (edited 02-05-2003).]

Well Marathon Man, you would have really loved the old days of Home Depot $100 Gift Cards, purchased with whatever rewards credit (not debit) card you choose which gave cash back after any small purchase, instead of the residual value remaining on the card. I read about this on Flyertalk, and don't recall too many being upset about the ethics (or maybe I missed it). This process had the same effect of earning miles at full or double credit, giving cash back, and didn't require the whole convoluted return scheme, and in effect caused the same loss on the card transaction fee for the merchant. Of course Home Depot stopped this, though it's effect would have still given them a benefit of a small sale that may have gone elsewhere and a more loyal customer.

Does anyone see the end result to the merchant as having a similar ethical concern? With debit cards aren't there much lower merchant fees anyways... so less loss in this method to merchant and less gain to buyer(returner).

Just reading Home Depot and cash back brought this to mind. I don't have a mileage earning debit card and won't be looking for one myself.


[This message has been edited by ddavis (edited 02-05-2003).]

To quote Marathon Man:

"people should do what they think they must in cases like these. I am beating a dead horse here so I think I am done now."

I am glad you've stopped being "unglued" - I was beginning to feel like I was around a rendering factory while reading your posts.

I managed to convince a buddy that he should return this hideous shirt lest the fashion police come arrest him! Really people, it was that bad. But I can understand the draw: it was originally $135 and is now 80% off (-20% with coupon). Well he used his debit card (MAC/Star) at Macy's to buy the shirt.

When the clerk rang up the transaction, she asked him for his card. Now I thought that Macy's like Target, Home Depot etc kept your card number in their system so that when you return something, it automatically goes back to that account--no card needed. Well it turns out that he used his MAC/Star only card! No Visa or MC logo! Wel the clerk didn't know what to do about this! The clerk called the area manager, the AM called the floor manager and they all called upstairs only to find out: "Give him cash!"

It turns out that Macy's will let you use debit or credit cards but unlike HD they don't give cash for a debit card return, they credit it to the Visa/MC portion of the card! Well they didn't know how to do that on a card without the Visa/MC logo!!! Of course at least 2 of the store employees grilled him as to why he doesn't have a full-fleged debit card...

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[This message has been edited by RS (edited 02-06-2003).]

Huh, been there, done that.
I�ll throw in my monkey, too, here�s the story:
A few years ago I�ve bought an expensive piece of jewelry ($5K) intended as a gift and, naturally, I charged it to mine DL Amex.
It turned out that I would never use this gift, but when I came to return the item four months later, my DL was long gone � canceled after 1 free year. I did not even remember which card I used, so when clerk tried to auto-refund it � transaction got rejected. For the moment we stayed stunned � clerk did not know how to react, and I realized that I hit THE loophole. The clerk was still mumbling something about not being able to refund cash, when I was handling him my Business Amex (no miles, no MR) and telling him that my account # been changed. Boy, did it make him happy. Later I transferred in my -$5K balance (free for Bus Amex).

I guess I did step on the Dark Side when I repeated this tran last summer � but my 9-month old DL Amex was offering double miles, and I could not resist.

So, like our messenger running back to Athens, I do believe there�s something between black and white. Will I do it again ?...

What the crux of all of this arguing seems to be missing is that people are talking about two different beasts here - a miles-earning credit card, and a miles-earning debit card. With a credit card, your returns should always be put back on the card - that is part of the merchant agreement banks set forth to places who wish to accept credit cards.

With a debit card, though, it's a different manner. A lot of places cannot process a debit return - their systems just won't allow it. And since a debit card transaction is technically equivalent to cash, people will tend to get upset when they are told that to process their debit card refund by credit card, it will take the standard credit time - usually 5-7 business days - for the refund to post.

Hence, at places such as Home Depot or Wal-Mart, you will generally get a cash refund on a debit transaction, because in their eyes, you paid cash in the first place.

This is not to say that I condone the massive purchasing of items via debit, only to get a cash refund and miles. There is still a merchant fee to be lost by the retailer (albeit a smaller one using a debit system). And ultimately, it will get paid for in higher prices.

Mike

Yes Nako, (and others asking); one of the horses is dead but there's always more to agrevate...

The debit card is like cash in these purchasing instances and thus, the store has already been (instantly) paid. So when you do a return, if they have to put it somewhere, they offer to put cash in your hands. It is what you gave them, after all. Tell the sales clerk you eraned FF miles for it and they will look at you as if you have three heads because many there have no care for miles anyway, I find.

If there is an issue, it would be the policies of banks and stores. Even if we all decided to be ethically perfect 101% in everything we ever do in our entire lives and we all WANTED these miles to be put back on the card when returning our items, I do not know how we or the banks would let this occur. The only solution (to appease the self-righteous ones) would be if someone in here were to tell banks with miles-earning debit cards to no longer offer miles on those debit cards. I am not going to be this person as I happen to enjoy my bank card's added benefit. Does anyone else? Good.

Now, I may not purposely go lugging hundreds of tiles back into HD (although this might add to some of my weight training also necessary when you train for marathons to and from Athens or in other cities) but such return-actions could in fact work and I merely pointed this out in here. I had to almost 'fight' about my findings in here though, and THAT is the only reason why much of this thread about it all still goes on today.

Now, with that one more or less solved, consider this (to further agrevate some):

As for the college-enroll thing (miles or no), I find that some ski areas give you the seasons pass for up to 1/3 less if you are a student. Some people I've known have enrolled in school to 'be a student' at the time they purchase this seasonal ski pass (which can be a savings of over $700) and then they unenroll days later. Technically speaking (all ethics aside) they WERE in fact students and that is what the ski area knows as well. You may get less miles when ordering your pass but who cares in this case? Go tell most post college grads who pull in $19k/year (like Joe Millionare supposedly does) to NOT consider this kind of thing...

MM is having fun but is also prepared to run from the police! (ha ha -- only kidding.)

Honestly I have never returned anything purchased with a credit card and been given cash. I agree that buying something just to return it and screw the merchant out of the miles is unethical. Another reason to be weary of running up "phony" tabs on credit cards just for miles is that often suspicious activity on credit cards is monitored and can affect credit ratings or arouse suspicions of much more illicit activity then just trying to fatten a frequent flyer account.

I found the same loophole. My wife bought something at JCPenney's and later decided that she did not like it anymore. I bought it with my CO Visa. At return time, the CO Visa had been cancelled and I was thankfully able to return it on a different Visa. I could have cared less about miles but was happy to be able to return it.

I guess it would be possible to buy things and return them on different cards to make miles, but I would not do it. Aside from ethical issues, I hate to return things and find it embarrasing. Not only that, but if it were to be done enough to get any real value out of it, the credit card company and/or merchant would probably pick up on it and take some action, possibly affecting your credit rating. It may even be that the airline could get involved and close a frequent flyer account if pressured by the credit card company. I don't know if it would get to this, but I do know that the airlines are the "gods" of their programs, and have carefully reserved the right to do virtually as they wish with their programs and the accounts.

My advice is to stick to earning miles the ethical way. If you find a loophole like the pudding guy who realized that the miles were worth more than the pudding, that is fine, but buying things to intentionally return to get miles is not something that the merchant, credit card, or airline would tolerate if they were alerted of this activity.

I heard about that one. My question is this, ethics aside, was it really worth it? You buy a gift cert for $100, that gives you 100 (or 200 if doubled with DL Amex), that are worth somewhere between $1 and $4 depending on the number of miles and who you ask. Then you have to stand in line again to buy something small to get most of your money back. So even at the double miles, you would have to buy 125 gift certificates, and then stand in line 125 times to buy 125 small items (I hope you can use the items) just to get a 25k domestic award. I would rather buy the miles from the airline for $625 than stand in line like that - I have better things to do with my time.

Well I never did it nearly 125 times, but you could buy an unlimited number of gift cards in a single purchase. I think people liked this as much for the free credit card cash advance feature as for the mileage bonus, not necessarily looking for a free ticket.
Since it is no longer available, I was just comparing the ethical questions which I don't recall being brought up regarding the old offer. The 'buy/return' idea seems quite unethical and yet costs the merchant less and yields less value with the credit vs. debit cards.

Good thing it wasn't Lowe's!!! My SO had to return something she bought 3 weeks ago. A week later, her credit union issued a whole new set of cards to every member. So when the Lowe's clerk saw that the last 4 digits on the new/replacement card didn't match, she wouldn't do the transaction. The only thing she would do was issue a store credit!