This past weekend people from all over the world came to the Saverocity Westcoast DO. I had the pleasure of meeting many of you there this weekend. I’m a bit of an introvert, so the weekend DO was a good way to get my feet wet and meet and greet some of you.
Today’s post is a recap of the Question and Answer panel time. For those of you at the DO I’ll do my best to add some new information. For those of you who missed it there were great questions and even better answers by a panel which consisted of:
I took detailed notes during the panel discussion, mostly because I like to document these things, but also to allow me to write up this post with the questions that were asked. I’ll go through them one by one here. (I removed a few questions which I thought were very personal ones).
Q1: I’m unable to get Simon Mall Gift Cards to work on Evolve
A: They don’t work with Evolve.
Longer Answer: I don’t actually buy from a Simon mall, my local mall is a Macerich, and I don’t use Evolve Money much nowadays. Good news is that Evolve seems to be moving in a positive direction for people who do have good uses for it.
This question spurred discussion of the way in which POS terminals and online CC processors block specific cards. The main way that cards are blocked is by their BIN, or Bank Identifier Number. This number is the first 6 digits of a card, and identifies the bank and type of card. More often then not when card doesn’t work with a specific service it is being blocked by its BIN.
I would suggest you keep track of BINs, and use one of the many online searches for BIN lookups. BINs are not set in stone, and as card issuers run out of numbers they have to increment their BIN. These changes in BINs can mean services which typically block your cards now work for those same cards.
Be on the lookout for BIN resets, and when they happen go back to the places your cards didn’t work at before and see if they do work now. If the new BINs work try to see if you can figure out a way to only buy the new BIN cards, filtering by either expiration date or asking the mall outright if you can have “newer cards.”
Q2: What is your opinion of the future of 2%/5%/6% cards?
A: Marathon Man nailed this one; Uncapped 5% rewards cards will never last. They’re money losers for the issuing bank, and cannot be sustainable in the long term. Capped rewards at this level are sustainable, but aren’t usually lucrative enough for churning.
2% Cards offer a good balance between small profitability for the issuing bank and for us as well. With swipe fees somewhere near 2.5% there’s a small spread on these cards, but enough to hopefully keep them around forever. If you’re looking for a great 2% card, look no further than the best cash back card on Earth. Or, if you like to buy flights, try the best travel cashback card.
Longer Answer: I don’t have much to add here: except this. In private discussion with a few readers after the sessions broke for happy hour I mentioned that there is going to be a herd moving in one direction: Towards the Wells Fargo 5x card. Because of this influx of post-Amex Blue users I think you’ll see some tightening of this card. Previous data points might no longer be valid on this card. Think about it this way; the heaviest hitters who were shut down from Amex are now swimming with everyone else in the Wells Fargo pool. This will certainly cause a spike in the cost to Wells Fargo for this card, and could lead to more scrutiny by Wells.
That said, I really enjoyed my 6 months with the WF product, and will be looking to get my wife a card during her Winter CCC applications.
Q3: What did you do Before PIN-able Gift Cards?
A: This was a great walk down memory lane, the Mint, Citibank checking accounts, and debit cards we’ve loved and lost. More nostalgia than informative, but still a good question nonetheless.
Longer Answer: Again, in a discussion with a few readers I recounted the following: Nothing lasts forever. If you look at the two single best opportunities for earning miles in the past 5+ years they both have a common thread:
The US Government
The US Government can be our best friend. I couldn’t work this idea into any of the questions asked during the panel, but I want to elaborate on it here. Only the US government can create a program or a situation which we can then exploit far beyond what a company would allow us to. Examples are the mint, but also GiftCards + PIN. Pins exist on these cards because the Federal reserve says they must, not for any other reason.
In addition when things go bad it is the CFPB and the FDIC who we can use to get our money back.
No one, not google, not Amazon, nor Apple or Amex have pockets deep enough to handle the flood of churners forever. (Un)fortunately, the government doesn’t play by the rules of business profitablity, and as such can be our best friend.
Q4: What does a post Wal-Mart world look like
A: Tashir handled this one really well, imploring everyone to go beyond Wal-Mart and try to find something that works for them that others aren’t doing. I’m a huge believer in this, crafting a strategy which is one step ahead of everyone else. He mentioned using other stores which sell money orders.
In talking with the people seated at my table I told them that I’d try to find something that works online more than in person since for me time spent driving around is a significant component of my cost to manufacture miles.
Longer Answer: A World without Wal-Mart would be significantly harder for some of us to manufacture in. For others thier current Wal-Mart is not helpful, and so they’re living in a post Wal-Mart world right now.
Marathon Man might be able to walk into a Wal-Mart and walk out with $30k in Money orders–but I’m not him, and you aren’t either. Don’t try to be someone you’re not, instead focus on your own churn, remove inefficiencies, and attempt to be the best you possible.
Look to others for inspiration, and to push you to continue to go bigger–but there’s far too many variables in play, including your personal ability to pay off your credit cards if you become stuck, also known around here as the Float Rule.
Q5: Does anyone have experience with a T-mobile Prepaid Card?
A: A few of us, myself included had used and abused this card, and moved on. I don’t believe anyone else commented on their volume, I was around $10k worth of loads and bill payments before my account was temporarily frozen; I called to have it unlocked and did not push onward, instead hoping to preserve my good name with Bancorp.
Longer Answer: Milenomic Ivan mentioned from the audience that he likes to leave money sitting in these types of prepaid cards instead of loading/unloading very fast. I’m too impatient to do that, as I’d rather keep my money moving and earning, but it is a strategy which some have claimed success in with this Tmobile card.
Bottom line, keep in mind that these products make money when you use them as intended; as day to day credit cards. Swipe fees for small credit card purchases are what these companies make the most money on. Large PIN based Debit transactions and online bill payment generate no real revenue for the card. And considering that T-Mobile refunds load fees they’re actually losing money on someone who abuses this card.
Q6: Could You Put a Cashier’s Job in Jeopardy by Buying Giftcards with a Credit Card
A: This was a good question to get discussion flowing by the panel members, though none of us could possibly have known the final answer to it.
My perspective on it is that if a store allows CC purchases we’re the least of the store’s worries. We certainly aren’t profitable customers, but the ones who really hurt a store are those who come in with a stolen credit card and cause the store to lose thousands. One of the panel members mentioned a store who was taken for 6 figures in a stolen CC scam.
As we were discussing this fraud and the risk it poses to stores I had visions that somewhere on the Eastern Seaboard a #EastcoastDO being held in a small room, with drug dealers, money launders, and CC skimmers going over their favorite ways to steal and launder funds with prepaid cards. The tricks we use are the same they do… 🙁
Q7: How Do You Avoid Account Shutdowns When Depositing Money Orders?
A: We all had our own tips here, and I’m sure I’m forgetting some of them. ATM deposits, business banking accounts, and remote branches were all options discussed. Since this is Milenomics I’ll detail my response here:
My system is simple: In person deposits with the branch closest to my MOPO, and telling the branch and branch manager exactly what I’m doing. Coming up with a story about where these MO are coming from that is anything less than the truth isn’t a good idea. I stressed, and continue to stress that honesty is the best policy. The phrase “I am buying these money orders to earn Frequent Flyer Miles,” also known as the Truth is the one I use with all my banks.
Longer Answer: I want you all to consider your Financial Firewall, and only use a bank you can afford to lose. At some point, at some volume, every bank will eventually shut you down.
Myself, Marathon Man and Tashir all told audience members to not try to avoid paperwork filings through breaking up of deposits, or structuring. There seems to be a lot of worry online about the paperwork that is filed about MO purchases. Banks are going to be suspicious of tons of Money orders because they’re trained to do that. When you start trying to avoid scrutiny you’re heading down a slippery slope, and possibly an illegal one. (IANAL, don’t consider this legal advice, etc.)
Q8: Do closed cards hurt your credit? Specifically will the Amex Blue hurt your credit?
A: Closed cards can hurt your credit because you’ve lost a chunk of your available credit. Banks consider your used vs. available credit as a ratio when determining your credit score. If a large portion of your available credit was tied up on your Amex Blue Cash then you could indeed see a hit to your score from losing that card.
The Westcoast DO was a lot of fun, and a really, really well organized event. Kudos to Matt and everyone who worked on putting it together. Let’s use this post as a virtual panel of sorts, go ahead and throw some questions around about anything, especially booking related questions.
And if Matt and the Saverocity gang do another DO make sure you’re there. You know how your friends and family are sick of hearing you talk on and on about miles? Imagine a room full of people just as into it as you are all talking and sharing. That’s what a Saverocity DO is all about.
great recap write up my friend!
There were many questions to things and some needed more personal one to one communication, which is what these events can allow for, but sadly there was so little time, what, with all the fun and beer to go around. I am available to help anyone with whatever I can offer but I would like to say that I thought most everyone there–speakers and panelists as well as most of the audience, were very experienced and helpful people. I was glad to be included among you all!
Thanks Marathon. Too much fun and not enough time is a good problem to have. Wish we could have had some time to talk together as well, but you were always surrounded by tons of people. Again, a good problem to have, lol.
I really enjoyed how audience members helped answer questions during panel time. Also great to see everyone be so positive and helpful towards each other.
Thank you for your summary and recap, Sam. It’s great to have a chance to meet and talk to you. Really hope you would find time to write more posts!
Thanks Sherman. I was talking to another reader and told her that when I started the blog I took a huge piece of posterboard, and brainstormed all the ideas for what became Milenomics. Doing that again might help shake out some new posts.
Maybe next time for fun (and for real needs) we should have one of those ticket things from a deli counter. Everyone can pull a ticket and get a chance to talk one on one with someone haha.
Anyway, a little data point I had to add somewhere in MS land so here may as well be the first place:
While my wife (and later I) was shut down by AX Blue for heavy use for MS, they just emailed her saying they were increasing her credit line on another card she has–the Hilton Amex. This card is something we have historically used for 99% MS use. While much less than the blue, it appears that the way Amex may swing it is a product cancellation for some users, and not some big bad mark on your Amex or credit world.
Just thought I had to make that known.
Thanks for the summary. Great to meet you on Saturday.
You too Maria. 🙂 Good to put faces to the names of everyone I met.
Let me throw my $.02
1) Evolve is small time unless you really go big. IMO. 2x at any overhead cost is just a waste of time as long as there are free and 5x around. Just why?
2) That being said, 2x could be the future as more and more very large bluebirds pop up and apps. But I agree with Marathon Man, but that doesn’t mean that banks won’t continually try it out. It will always exist.
3) I would buy the Amex GC at 5% rebate and then have different numbers to buy $1 coins with. The good ole days.
4) I’m in the post walmart world. And it involves no pants. Digitals where it’s at.
Helps when you’re never near a walmart. Or if you don’t have pants. 😀
Anyways… Matt, when/where’s the next one?!
Drew, thanks for the cooment. There is value in a 2% card–but only if you really know how to control your costs. It is far too easy to end up spending more than $.02/$1k in time and money earning/liquidating with a 2% card. With the ability to push a Fidelity card up to 2.8% or so on flight purchases and the fixed costs of mall cards approaching $0 at the right time the numbers are moving in the right directions for me.
There’s no doubt 2x can be profitable, I’m just too lazy for doing in store 2x. Fidelity would help with that, but the only 2x I have is arrival, which is still 2.2-something for me. And I’d being lying if I said I didn’t max it out multiple times a month. However, seems like it’s the main thing for a lot of people, instore 2x… which blows my mind. But if you don’t mind it, you don’t mind it.
I have to say Matt’s concept of an all MS do is pretty interesting (is that his idea?). So I’ll see if I can swing one of the next ones.
I’d be interested in hearing how you like it over all. Although I know most probably go for networking.
Drew: I don’t know if the DO was planned to be that way or if it organically moved in that direction. I think there are/were some issues with the subject matter being so MS heavy:
There were people at the DO who don’t do any funny business–they earn their miles from BIS. I met a few of them at the DO, and would assume there were more that I didn’t get to meet. I can only imagine that it was terribly boring for them to sit through talks about a subject they didn’t really care to know more about. In addition because some topics and questions were really, really specific there were times when only the person who asked the question could have been interested in the answer.
At the end of the day the talks were great–but I felt that there wasn’t enough time to connect with people. Talks which are going to be recaped on blogs anyway aren’t why people came to PHX to get together. The time spent at tables and in small groups was the best part of the weekend. I didn’t know any of my table-mates prior to the weekend and I don’t think they knew me. We shared tips and tricks with each other, from car rentals, travel tips, and even auto insurance–not necessarially related to MS at all.
Lastly, Very very few people, myself included, are going to stand up and spill a secret that hasn’t been blogged about ever in front of 150+ people, and I have to think that some of the people who went to the DO were expecting something like that. Again, it wasn’t marketed as a MS DO, but if you do market something as such I could see people being upset when they leave with more questions than answers.
On a personal note: Did you get my email?
I got the WF 5x card around this time last year, and put it to good use before vanilla reloads and vanilla one gift cards died. I was also able to make use of the phone protection, which is every bit as good as it seems.
My question though, is that the guy who recommended this card to me (WF employee at the time) told me recently that he still has the card, and that all WF employees and former employees get 5x rewards on all purchases, with no expiration. Has anyone heard this or have any insight?
Brenton, I have not heard that…but would consider a job at Wells Fargo if that is indeed true 😉 I wonder if you work there for exactly one day would you still be considered a former employee.
Phone protection is why I’m keeping the card as well, it has allowed me to buy a used phone, saving huge money.
Apparently I missed meeting you! I regret not being able to make it but def next time. Also thanks for the link 🙂
Giddy: Yes, I came out of hiding for this event, cannot guarantee when/where that will happen next, but hope we can meet. Always glad to help a fellow F2B’r out.
Excellent recap for those who could not attend.
Really nice recap Sam, although you’ve managed to increase my already large amount of envy!
Great wrap-up! I’ve enjoyed your blog and tweets for sometime now. It was great to meet you at lunch during the WestCoastDo. Thanks for the continuing insightful information you so graciously share with the rest of us.