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Nov
Buying coins with credit cards and depositng those coins to pay of the credit card is a technique which many have used to earn hundreds of thousands of miles.
The US government pays the credit card merchant fees on the charge, and covers the cost of shipping, and the consumer gets the rewards.
It appears that some heavy coin churners are receiving a letter as follows:
Dear Circulating $1 Coin Direct Ship Customer:
The Circulating $1 Coin Direct Ship Program was developed to make $1 coins readily available to the American public at no additional cost. Indeed, the United States Mint is the only place to obtain Native American $1 Coins at this time. The intent of the program is to encourage use of the $1 coins in oridnary day-to-day cash transactions. Increased usage of $1 coins in commerce saves the nation money due to the coin’s 100% recyclability and durability – it lasts for decades.
However, it has come to our attention that some customers are not using the program as intended. For example, a small number of customers are repeatedly ordering large quantities of $1 coins to accure points on credit card plans, then turning the coins in to their banks. This type of activity is not in the spirit of the Circulaing $1 Coin Direct Ship Program and is costing the government money in processing, handling, and postage for these orders.
Please note that the United States Mint is monitoring Direct Ship transactions. If an abusive ordering pattern exists, we will no longer fulfill future orders.
We are pleased that the Circulating $1 Coin Direct Ship Program has been a great success, with over 100 million $1 coins issued to date. We hope that all future purchases will honor the intent of the program to encourage robust circulation of $1 coins.
If you have questions about the program, please contact the UNited States Mint’s Office of $1 Coin Programs at (202) 354-7603.
Sincerely,
The United States Mint
So they’re saying they may stop shipping to people playing this game. Of course they may not. And in the same breath that they are complaining about large volume purchasers, they tout the large volume of coins shipped as a success! (“We are pleased that the Circulating $1 Coin Direct Ship Program has been a great success, with over 100 million $1 coins issued to date”)
We’ll see how long the merry-go-round ride lasts.
Lisa said,
This is exactly why I am uncomfortable about this Mint idea. I also don’t like to take advantage of ridiculously low airline mistake fares and then insist on my right to get them when the company tries to not honor it. Good people know when they are taking advantage of others and, bottom line–it is not an excuse to say, “Well it is just the government” or “it’s just a big company”. I just think it is sort of sleasy and it dosen’t make me feel good about myself so I avoid it.
jumpdogjump said,
Well Stated, Lisa – for some reason, however, I have no problem churning Citibank credit cards.
Yeechang Lee said,
The last time Gary mentioned the US Mint’s presidential coins, me and Oliver, another poster, got some abuse from other commenters (and from Frugal Travel Guy) for daring to criticizing the idea of repeatedly churning thousands of dollars’ worth of coins. I’m glad, and very unsurprised, to see the mint finally crack down on the exploiters.
Lisa, I’m with you about super-low prices (whether airlines tickets or anything else); if it’s obviously a mistake (and I will be the first to acknowledge that “obviously” here is a gray area), I have no right or reason to be upset if the prices aren’t honored. That’s not to say that the companies wouldn’t be better off from a public relations-goodwill standpoint from honoring the prices; they likely would, and of course many do honor them precisely for this reason. But I shouldn’t get angry if I don’t end up being able to fly to London for $10 instead of $1000.
(Wandering Aramean’s situation, which Gary has also recently discussed, is different; I think WA makes a good case for why a lawsuit is justifiable in that circumstance.)
Gary, I don’t see the contradiction that you do. The vast majority of the 100 million $1 coins circulated through this program have, presumably, done so through legitimate means. The mint wants this figure to grow, but not when it “cost[s] the government money in processing, handling, and postage for these orders” purely to subsidize airline miles, with those coins almost certainly coming right back to the mint undistributed.
Jumpingdog, churning credit cards is very different from the $1-coin scam (and I feel safe in calling it a scam now). There are no meaningful shipping and processing fees involved; the airline benefits via the bank’s payments to it, and by making a loyal passenger happy; the bank retains you as a customer; and you take the real risk of too many hard pulls impacting your credit score, anyway.
Will Buying Miles from the Mint Save Us All? Obama’s Debt Ceiling Plan B Came From Frequent Flyers - View from the Wing said,
[...] in the press, the Mint took some heat for letting the practice continue. And they started to scold some people for doing it in some pretty extreme ways. But the deal continued on, it wasn’t actually [...]
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