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If you follow miles & points blogs or other outlets such as Flyertalk, then there is no doubt that you are constantly bombarded with information about manufactured spend. I have also written about manufactured spend quite often because it is something that is of great interest to me.
I probably spend more time than I should researching and learning about new methods. All of this time invested makes me wonder from time to time whether it is all worth it.
The Death Of One Method
This past Tuesday I made a normal run to my local CVS and picked up some One Vanilla cards. I then went to Walmart and loaded $2,000 of them, with the rest to be done the next day. Of course, as many of you know, the next morning either Walmart or InComm (the company who issues Vanilla cards) blocked pin transactions on Vanilla cards from working for either money orders or to load Bluebird.
Essentially at that moment I was stuck with $3,000 in gift cards. The number one rule of manufactured spend is never have more money “floating” out there than you can afford. I truly believe in this rule and follow it religiously. While this isn’t a major setback since I am aware of a half dozen ways to liquidate these cards, I can’t imagine being sick because I needed the money sitting on them.
This whole situation got me thinking about how much hassle this must be for more casual “spenders”. It is widely assumed that the death of Vanilla Reloads was brought on by it going mainstream. It wouldn’t surprise me if the Vanilla gift card Walmart blockage was caused by the same thing.
Manufactured Spend Is Unprofitable
While we aren’t doing anything wrong, often times this practice can be unprofitable for companies. For example, Walmart is paying swipe fees every time we liquidate cards onto Bluebird. They expect to make the money back when you use Bluebird to pay for transactions, but if all you do is billpay, then they lose.
On the flip side, InComm is expecting to make money when you swipe the debit gift card to purchase items. If you only swipe once to empty the card, then their profit is hurt. In other words, too many people doing this starts to hurt the bottom line and then a big change comes.
Is The Hassle Worth It
So now it is time to answer the question posed in the title. I am of the belief that a lot of people who manufacture spend do it casually. They aren’t spending $40-$50k per month on credit cards, but instead use casual techniques such as OneVanilla & Bluebird to load a few thousand dollars per month in order to hit their minimum spending requirements on credit cards.
A few months ago I advocated a simple MS strategy that I believe works for most people. It involves using a cash back credit card with 5x category spend, Amazon payments and whatever credit card you need to hit minimum spend on. With this approach you could easily manufacture spend without any cost and with minimal effort. (I am aware the old posts refer to Vanilla Reloads, but the strategy remains the same with the use of gift cards instead.)
This simple type of MS is definitely worth it in my opinion and what I recommend for most people. With that said, it can still be beneficial to take some time to research and learn different methods so you will be prepared the next time an easy strategy goes mainstream and gets killed by the masses.
For me, the world of manufactured spend is a fascinating and ever changing one. I follow almost all of the latest methods and tricks and try to keep up with some of the amazing people out there on the front lines. I don’t advocate that most people do that though.
What makes it worth it for most people is not having to take too much time. Find a simple strategy that works for you and learn about a few backups for when it dies.
It Is All About The Memories
While I do write about manufactured spend along with so many other topics, this website reflects my personal belief that it is all about the experiences gained. Miles To Memories is a fusion of topics relating to award travel and the stories of the memories created with our miles & points.
The real deciding factor as to whether or not it is worth it comes on the memories side. For me, the answer is always yes, because I LOVE to travel. I have personally been able to visit over 60 countries including 50 with my wife and son. No change to debit gift card policy can take those memories away from me.
Please let me know below what you think about manufactured spend, whether or not it is worth it and how complicated of a strategy you employ. Have a great Sunday!
Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.