Amex Bluebird manufactured spend loads are being shut down by Amex

[rickandcindy23]

So far our Bluebird cards are not shutdown (knock on wood), but many are getting the notices over the last two days that they are no longer able to load anything at all to the Bluebird Amex.

Bluebird was our method of building miles and maxing out our Chase Ink Bold and Ink Plus cards for 5X office supplies. We bought Visa debit cards through Staples and loaded them to Bluebird via the ATM. We used the electronic checking to pay income taxes, property taxes, house payments, car payments, utilities, and some timeshare fees that require a fee for using a credit card.

I just checked Flyer Talk and saw many people reporting their activity shut down, but Amex said they can still use the funds in their accounts and when the funds reach zero, the account will be closed.

We have about $5,600 left to load this month and hope it still works today and tomorrow.

It was fun while it lasted.

 

[isisdave]

I use mine rarely. On January 6 I got a notice that effective immediately funds could not be withdrawn from ATMs outside the US.

Isn't what you're doing technically "money laundering", using funds of unknown origin to buy perfectly ordinary things for cash, running the cash through two or more accounts, and paying for something else? You're just doing it for the points, but I'll bet they've discovered that others are doing it for more obscure reasons.

 

[rickandcindy23]

I bought Visa debit cards from Staples at 5X UR Points and loaded via Bluebird for about 3 years.

All you can load to Bluebird now is cash. That seems a lot more like money laundering to me.

Federal regulations require all marijuana sales to be cash only, even in Colorado, because you cannot use any other means to buy it here, since it's still illegal nationally. So these people in the business can still load cash into the Bluebird. Or their own private checking accounts (or business checking accounts).

That seems more illegal to me, but I am no lawyer, nor am I a cop, and one cop I talked to said Bluebird is set up to be a great way for criminals to look legit with cash.

However, I feel that there certainly is a paper trail with my spend at Staples and my loads of BB and my payments of mortgage, utilities, income taxes, property taxes, etc., into that account.

But Amex saw it differently, which is okay because we built at least 1,000,000 points over the three years.

 

[dominidude]

I use mine rarely. On January 6 I got a notice that effective immediately funds could not be withdrawn from ATMs outside the US.

Isn't what you're doing technically "money laundering", using funds of unknown origin to buy perfectly ordinary things for cash, running the cash through two or more accounts, and paying for something else? You're just doing it for the points, but I'll bet they've discovered that others are doing it for more obscure reasons.

With due respect, it doesnt seem like monery laundering using your own logic.

The funds are not of "unknown origin". The origin of the funds are the credit cards themselves. The whole thing seems to function like this:
credit card ==> staples gift card
Staples gift card==> bluebird amex
Bluebird Amex==>credit card

I cannot see anything illegal with that.

That being said, my guess is that Amex was not making enough money in that scheme, and decided to shut it down.

Nothing wrong with that either.

 

[rickandcindy23]

Yep. We have figured out a new way to build points, so we are still doing what we hoped to be able to do.

 

[Ty1on]

With due respect, it doesnt seem like monery laundering using your own logic.

The funds are not of "unknown origin". The origin of the funds are the credit cards themselves. The whole thing seems to function like this:
credit card ==> staples gift card
Staples gift card==> bluebird amex
Bluebird Amex==>credit card

I cannot see anything illegal with that.

That being said, my guess is that Amex was not making enough money in that scheme, and decided to shut it down.

Nothing wrong with that either.

Could you have used Bluebird to pay a credit card? Your scenario would amount to kiting, and I know the CC companies aren't keen on supporting that.

I don't have any credit cards that would accept a credit card as a payment method.

 

[rickandcindy23]

Could you have used Bluebird to pay a credit card? Your scenario would amount to kiting, and I know the CC companies aren't keen on supporting that.

I don't have any credit cards that would accept a credit card as a payment method.

Kiting is writing a check to pay a bill without having money in there. Like you get paid on the 15th, and you have a payment due on the 16th, so you mail the check on the 12th, hoping it will get there after the deposit on the 15th.

Bluebird was electronic checking and I even had checks. The money was always in there before I could use it. There was a limit of $5K in and $5K out per month. Bluebird wasn't a credit card at all. I think you could use it as a debit card, but as a person building points, I wouldn't use it that way because no points forthcoming from Bluebird.

I never paid the credit cards with the Bluebird account. That circular expenditure of money would probably get flagged by the credit card I am using. I eventually won't have as much to pay in bills as I do now. I even paid MF's with it. That was ideal because I could pay those fees and get 5X instead of 2X. If Staples stops selling the gift cards, I could be out of the game completely because I loved transferring to Southwest and Hyatt from the UR account.

 

[sjsharkie]

Kiting is writing a check to pay a bill without having money in there. Like you get paid on the 15th, and you have a payment due on the 16th, so you mail the check on the 12th, hoping it will get there after the deposit on the 15th.

Bluebird was electronic checking and I even had checks. The money was always in there before I could use it. There was a limit of $5K in and $5K out per month. Bluebird wasn't a credit card at all. I think you could use it as a debit card, but as a person building points, I wouldn't use it that way because no points forthcoming from Bluebird.

I never paid the credit cards with the Bluebird account. That circular expenditure of money would probably get flagged by the credit card I am using. I eventually won't have as much to pay in bills as I do now. I even paid MF's with it. That was ideal because I could pay those fees and get 5X instead of 2X. If Staples stops selling the gift cards, I could be out of the game completely because I loved transferring to Southwest and Hyatt from the UR account.

As you have pointed out, there is nothing illegal about this. It is legal manufactured spend, and as long as done within program rules, you are fine.

I used to do Bluebird Manufactured Spend as well for a time. There also used to be a US Mint program where you could purchase free dollar coins from the US Mint and then take them to your bank, then purchase coins again -- round and round. It is certainly not kiting.

But as with the US Mint program, manufactured spend is not the goal of these programs and ends up costing the companies money in the long run. As such, there have been more and more Bluebird restrictions in the past year that are likely going to make the manufactured spend less and less valuable.

-ryan

 

[Pat H]

It's not money laundering, it's not check kiting and it's not illegal. Check kiting involves at least 2 checking accounts. You write a check for $1000 from bank A and deposit it in bank B. At the same time you write a check on bank B and deposit it into bank A. Neither account has $1000. You take money out of both banks while continuing to make deposits of NSF checks taking advantage of the float time. I've seen as many as 4 banks used in the scheme. It works for awhile but eventually collapses. It's much harder to do today than it was years ago.

 

[Ty1on]

Kiting is writing a check to pay a bill without having money in there. Like you get paid on the 15th, and you have a payment due on the 16th, so you mail the check on the 12th, hoping it will get there after the deposit on the 15th.

Bluebird was electronic checking and I even had checks. The money was always in there before I could use it. There was a limit of $5K in and $5K out per month. Bluebird wasn't a credit card at all. I think you could use it as a debit card, but as a person building points, I wouldn't use it that way because no points forthcoming from Bluebird.

I never paid the credit cards with the Bluebird account. That circular expenditure of money would probably get flagged by the credit card I am using. I eventually won't have as much to pay in bills as I do now. I even paid MF's with it. That was ideal because I could pay those fees and get 5X instead of 2X. If Staples stops selling the gift cards, I could be out of the game completely because I loved transferring to Southwest and Hyatt from the UR account.

Kiting is writing a check from one account to deposit in another account to cover a check written on that account, running a shell game to create money that you don't have by using the time it takes the banks to clear the checks.

Writing a check to pay a bill when you don't have money in there is overdrafting. My mother was an expert on overdrafting LOL

 

[Ty1on]

It's much harder to do today than it was years ago.

For two major reasons: A) float time has decreased, and B) banks typically place holds on deposited checks during float time.

 

[rickandcindy23]

So it seems a person can now take those same debit cards [I get 5X Points for buying] and buy money orders to deposit into a regular checking account.

Of course, 1) the grocery store could stop taking debit cards for money orders. And/or, 2) the credit card could get tired of seeing the same Staples credit card charges on our account and close our account. And/ or, 3) Staples could stop selling the cards. No other office supply store seems to have Visa debit cards for us to buy. It's all pretty fragile.

 

[isisdave]

And I didn't mean to imply that there was anything wrong with the activity described, just that Amex probably found that they didn't make enough money on it.

 

[dioxide45]

So it seems a person can now take those same debit cards [I get 5X Points for buying] and buy money orders to deposit into a regular checking account.

The only issue is that it the purchase of money orders usually has a fee. The fee might be enough to wipe out the value of the points you earn for their purchase?

 

[rickandcindy23]

The only issue is that it the purchase of money orders usually has a fee. The fee might be enough to wipe out the value of the points you earn for their purchase?

It's .59 for a money order up to $1,000. This is a piddly amount of money for the money order at the grocery store, when we go there anyway, and we can get two of them per trip. That's 10K in Southwest points: 5X for the Chase Ink Bold purchases at Staples, then about $69.50 in gift card costs + $1.18.

 

[am1]

I have a thing going where the 5x miles at Staples is just the icing on the cake.

It is amazing companies come up with things where the CEO gets a bonus and it costs the company a lot of money. I found my in by the company trying to take advantage of me. Just flipped it on them. All legal.

 

[Jimster]

mfg spend

Let's be candid here. The purpose of the bluebird accounts was not to provide people with 5X reward per dollar. If it were, there would be a big sign that says: "Don't be a sucker, get 5x points per dollar for ordinary spend" Hence the words "manufactured spend" apply which is just another way of saying I am going to take advantage of an unintended loophole. Since it is not illegal, it should be called a sharp practice and that term does not connotate sharp being smart but rather sharp being of borderline legality and ethically questionnable.

I am not going to sit in judgement of anyone since i play the point accumulation game as well as anyone but I am also not going to shed a tear for those people who have used this approach. Likewise, I did not shed a tear for those who played the mint purchases approach (which incidently cost everyone else who was a taxpayer a ton of money to pay for the shipping charges). I think the point is you can rationalize anything you do if your concern is only for your own greed and are indifferent to the needs of others.

 

[chalucky]

Let's be candid here. The purpose of the bluebird accounts was not to provide people with 5X reward per dollar. If it were, there would be a big sign that says: "Don't be a sucker, get 5x points per dollar for ordinary spend" Hence the words "manufactured spend" apply which is just another way of saying I am going to take advantage of an unintended loophole. Since it is not illegal, it should be called a sharp practice and that term does not connotate sharp being smart but rather sharp being of borderline legality and ethically questionnable.

I am not going to sit in judgement of anyone since i play the point accumulation game as well as anyone but I am also not going to shed a tear for those people who have used this approach. Likewise, I did not shed a tear for those who played the mint purchases approach (which incidently cost everyone else who was a taxpayer a ton of money to pay for the shipping charges). I think the point is you can rationalize anything you do if your concern is only for your own greed and are indifferent to the needs of others.

Hear, hear!!
Well said Jimster

 

[sjsharkie]

Since it is not illegal, it should be called a sharp practice and that term does not connotate sharp being smart but rather sharp being of borderline legality and ethically questionnable.

I am not going to sit in judgement of anyone since i play the point accumulation game as well as anyone but I am also not going to shed a tear for those people who have used this approach. Likewise, I did not shed a tear for those who played the mint purchases approach (which incidently cost everyone else who was a taxpayer a ton of money to pay for the shipping charges). I think the point is you can rationalize anything you do if your concern is only for your own greed and are indifferent to the needs of others.

Yes, let's be candid.

You say you aren't going to sit in judgement of anyone, yet you judge the practice as "being of borderline legality and ethically questionnable [sic]"?

I don't do manufactured spend anymore because it's not worth my time. However, it is not borderline legal nor do I consider it remotely questionable from an ethics perspective.

I find your post contradictory and inflammatory. I think the OP was just warning others that the Bluebird loophole may be ending. If you truly do believe that those who do it are only concerned about their "own greed and are indifferent to the needs of others", then just ignore the post. Yeesh.

 

[rickandcindy23]

Thanks for the defense, sjsharkie.

Bluebird doesn't give 5X, it's our Chase Ink Bold that gives 5X for office supplies, and they sell Visa Debit Cards online and mail them to us. That could change at any time. I am not naïve.

I think it's okay to take advantage of whatever way I can to build miles. But I don't do it to the extent some do. One guy on flyertalk.com does 100K some months. Holy cow! But it's legal. As long as the grocery store will take credit cards or gift cards for payment, it's all good.

Things could get shut down again, absolutely, and I will pout for a day or two, if indeed it happens.

Sure, let's just let Bluebird Amex users load with cash and use that drug money to do it. I don't care. That is true money laundering.

Some people do think it's not worth it, and I understand it. Our very good friend asked about my MS technique, and I outlined it in detail. He emailed me back and said, "Sounds way too hard." I get it. I do.

 

[Jimster]

mfg spend

Believe me I understand exactly how it is done. Until recently you could have also used the Target Red Card or Serve. But what happened to them? Oh they were shut down too because they were being abused. You could also have gone to your local Staples or Rite Aid or other store and bought your debit cards except most places wouldn't let you buy those cards with a credit card. You can slice and cice it any way you want it is not the intended use of those cards. It is a sharp practice. I find the more politically correct term "manufactured spend" a nice way of disguising the sharp practice.

No it is not illegal which is why very few corporate mortgage lenders didn't get indicted for the housing crisis. What they did was not illegal either but they were doing a sharp practice too- using inflated appraisals and other mechanisms to get loans approved that shouldn't have been. They probably called it "manufactured loans". That is why we now have the Dodd-Frank legislation which does make it illegal.

I was at the Chicago Seminars when "Mr. Pickles" said he had 72 accounts with the government to avail himself of the Mint purchases. I am glad we were able to help him pay for all that shipping.

All that being said, it is clearly up to each individual to decide what they want to do. My comment was and is "I won't shed a tear" because the accounts are being shut down.

 

[sjsharkie]

Thanks for the defense, sjsharkie.

Bluebird doesn't give 5X, it's our Chase Ink Bold that gives 5X for office supplies, and they sell Visa Debit Cards online and mail them to us. That could change at any time. I am not naïve.

I think it's okay to take advantage of whatever way I can to build miles. But I don't do it to the extent some do. One guy on flyertalk.com does 100K some months. Holy cow! But it's legal. As long as the grocery store will take credit cards or gift cards for payment, it's all good.

Things could get shut down again, absolutely, and I will pout for a day or two, if indeed it happens.

Sure, let's just let Bluebird Amex users load with cash and use that drug money to do it. I don't care. That is true money laundering.

Some people do think it's not worth it, and I understand it. Our very good friend asked about my MS technique, and I outlined it in detail. He emailed me back and said, "Sounds way too hard." I get it. I do.

No need for the thanks. It was a good warning post for those that do Bluebird. The whole response likening it to some shady, unethical practice was absurd -- I see now he is trying to draw the line between this and the housing crisis. .

It has been widely touted and spread by the frequent flyer boards as well as pointsguy, millionmilesecrets, etc. as a legitimate way of building up points. IMHO nothing remotely unethical about it.

Thanks for all your great posts.

-ryan

 

[rickandcindy23]

The people on Flyertalk.com make me feel like a rookie! Some of those people buy tens of thousands of $$$ of gift cards at Simon Mall. Don't know how they liquidate them, and maybe with the shutdown of Serve and Redbird and Bluebird, they just do money orders.

My Ink card (and Rick's, too) allows up to a $50K spend on office store purchases. I haven't ever maxed it out, and neither has Rick, because we don't need to exploit it. The $50K max on our timeshare MF's (hotel spend) has been maxed out on my card a few times at 2X points. I spend that legitimately on timeshare MF's and hotel bills.

When anyone questions any of the major players on Flyertalk.com, calling them out on their point-building methods, a bunch of people jump on the accusers and call them trolls. It's quite a harsh bunch over there. I just mind my own business and learn from those guys. They are the experts.

Flyertalk has some people who say, "That doesn't work," because they are not wanting to encourage others (it might shut their method down).

For me, it's a fun game right now. There are so many aspects of it, something could leave us hanging somewhere.

 

[sjsharkie]

The people on Flyertalk.com make me feel like a rookie! Some of those people buy tens of thousands of $$$ of gift cards at Simon Mall. Don't know how they liquidate them, and maybe with the shutdown of Serve and Redbird and Bluebird, they just do money orders.

Agreed. I am a 2MM on AA in no small part to Flyertalk -- I made it before they changed the rules from earned miles to BIS (butt in seat) miles.

I used to follow religiously, but now I've got too many miles to use as it is. However, the board does come in handy for advice and strategy on elite qualification as well as award travel so I do visit from time to time. I agree it can get vicious...

-ryan