Hi,
I’m new here and I was just wondering if anyone has set up his or her own CC terminal to get FF miles. It seems easy enough to set up an online terminal. They charge about 2.3% just looked on line real quick. I imagine you could get cheaper if you shop around. (2.3cpm if using a mileage CC). Is this a good price for trouble free miles?

The way I see it I could get an online terminal and a few 0% interest for 12 months credit cards. Charge $20,000 to my self. Pay the 2.3% Then take that 20k and invest it in CDs in a new Fidelity and ameritrade account. CD would get about 5.5%. I would get 30k FF miles for opening the accounts for 6 months. So I would get 3.2% or $320 on the CC companies free money +30,000 FF miles. So I could get a free ticket and some cash to spend a weekend somewhere fun for a few hours work.

Just wondering if anyone else has thought about something like this. Or do I just have too much time on my hands?

I think it violates the merchant account terms to do what you describe. If you had enough sales from other people they might not notice.

I wish I could just buy the miles in bulk from the airline at a decent price. I'd be willing to pay .015 per mile.

Yes.

But, welcome to FlyerTalk.

What you are describing could get you in trouble with both your credit card issuer and your credit card merchant bank. Potentially big trouble.

You need someone else to do it for you. A buys from B and B buys from A.

There are so many people on this forum looking to buy miles in one way or the other. I wish we could just purchase them directly. Maybe in larger size through a buying collective.

It would not be in the airlines best interest to sell to individuals at a good price. Most of those miles would end up diverting revenue away from longhaul tickets in J and C.

Traveler

It's still not allowed.
I suppose you are less likely to get caught, but still...not worth the risk!

Sure you can do it. But a few things you should be aware of:
1. The rate for swiped or keyed affinity cards is much higher than 2.3%.
2. The card company will hold the transaction and after sending you a notice void it. (Been there done that, AX knows and caught this each and every time)
3. There is a limit to how much you can run each transaction for based on your credit on your merchant account.
4. There is a limit to how much you can process on your merchant account each month.
5. Exceed these limits and the transactions are held and NOT deposited to your account.
6. It violates your cardmember agreement.
7. It violates your merchant agreement.
8. They will cancel both your credit card and your merchant account.
9. They can put you on a TMF, doesn't matter if you never want to open a business.

Money Laundering sound familiar to the OP, I hope?

Sanosuke!

Not necessarily. Sometimes there is only a slightly higher discount rate for affinity/rewards cards.
I agree with everything else--stay away from the Terminated Merchant File!

good point..it could violate banking regulations as well.
Plus, the IRS might be interested in knowing why you aren't claiming income for all of those transactions you are processing...

You can find percentages lower than 2.3%, but generally you have to be a good merchant and run larger amounts (usually 10-20k per month), to get below 2%.

Generally running cards for someone else that isn't a real transaction is against all the rules. I think it's called factoring.

Instead of trying to do things against the rules, I'd keep my eyes open for things on Flyertalk that will give you the same thing, for less.

For instance: DL had a promotion a couple of months ago, where you got miles and 2500 bonus miles for every 1800flowers purchase. If you bought the cheapest item for about $20, and bought a lot of them, you could easily get your CPM below one cent.

You can also donate the items received, and get a tax write off too. This deal wasn't quite as good as Pudding Guy, but still had some quite nice rewards if you don't mind entering in 200 orders.

Affinity cards go through and show up on your merchant statement as non qualified transactions at a higher rate. Although I have used my terminal to run personal things like my $25 transaction a month for Discover to keep my
.09% transfer rate, I would never run through a huge amount even though the fees would be deductible through the business. It is still coming out of my pocket, and would leave a big paper trail.

Like mentioned above, the mileage bonuses like the current Delta one for up to 25K, the flower bonuses, the card opening bonuses and Chase account opening bonuses are better deals, even coke caps work out well.

Just my 2 cents
JudyJFLA

Not to mention the tax ramifications...
I mean all of these "sales" will have to count as income to the merchant.

Also, I don't wanna come across as one of those "'use the search function' Nazis" but there are TONS of threads about this very subject... look around, you will find about a gazillion (give or take 2 or 3) theories, scenarion and hair-brained schemes.

Have fun and welcome.

Google Checkout is a flat 2% + a few cents, but like all other services, use will be audited and a company tax ID is required.

Honestly everybody... it simply cant be done... look around at some of the posts here. People go to some AMAZING lengths for points/status here. If it were that easy, everybody would be doing it, and years ago.