Disclaimer: I was at no time arrested. Anything you read on this post is indicative of a personal experience that occurred and should not be used as advice. This is a true story and it should be read as just a story.
Background
As many of you know, I spend a lot of my time dabbling into Manufactured Spending. In a typical day, it’s not unlikely for someone to see me with upwards of $20,000 in gift cards that I buy and liquidate. Recently, I leased an apartment in Texas to continue my MS activities. For some reason or another, Texas is a great place to MS because there are a variety of grocery stores and a ton of Walmarts. While MS isn’t my full time “job”, it is a cool thing to do because all of my other businesses are more automated and this makes me feel like i’m doing something.
The Incident
Yesterday, I spent a couple hours buying and stocking up on gift cards. After gathering a good amount of cards, I went to a local Walmart near my apartment. From prior knowledge, I was led to believe that this particular Walmart allowed a very high volume of money orders to be bought with VGC’s. Usually, the Walmart customer service desk will limit people to how many money orders someone can buy based on how busy they are or some made up local store policy.
Disclaimer: When buying large amounts of money orders, I always clarify my intent to do so and ask for the Money Order Transaction Form. This form takes down my information so that Walmart can keep record of my purchase.
At first, I bought $5,500 in money orders with the approval of the assistant store manager. My friend, who was with me then proceeded to buy his money orders, which would have totaled $15,000. After the first money order was printed for him, another cashier came over to our station and loudly proclaimed “No Gift Cards Allowed” to which we simply stated that there was already an approval by the assistant manager. At this point, instead of looking for further clarification, the cashier simply stated, “Do you want me to call the police?” I responded with a one word “What?” and she immediately walked away murmuring something. At this point, I didn’t think much about it and just stood there waiting for someone to come and tell us what was going on. Eventually, Walmart Asset Protection walked over to us followed by two police officers. The following conversation ensued:
Asset Protection: “Sir, you cannot buy anymore money orders here today. You have reached your limit”
Me: “Okay, no one told us there was a limit, they didn’t actually even tell us anything, the cashier just walked away and it was a cashier that wasn’t even helping us. She didn’t even ask for any clarification from the assistant manager who approved us to do these current money orders.”
Police: “What’s going on here? Let’s step away from the counter”
Asset Protection: “You can’t buy anymore money orders here, you’ve reached the limit.”
Me: “Okay, no one told us the limit but if there is one, I wont do anymore but no one told us anything”
Police: ” Can I see those cards? Where did you buy these from? Why do you have so many?”
I then explained the entire process of Manufactured Spending but clearly he wasn’t paying attention because he asked me again right after why I have so many cards. Meanwhile, the Asset Protection agent was busy looking over the forms I filled out for any discrepancies between the information and my ID.
Police: “I’m going to call my friend who is an agent with the IRS”
Walks away with my ID..
Me to 2nd Police Officer: ” I understand you guys are really weirded out by this but that other officer just took my ID and is calling a random IRS agent over these gift cards that I bought legally.
2nd Police Officer: “Well at this moment, you’re officially being detained so he can do whatever he needs to.”
I’m not gonna lie, when I heard that, I kind of got worried mainly because I was so confused at how fast this entire event escalated. The police didn’t even give enough time for the Asset Protection agent to even make sense of what was going on let alone try to understand what was going on. Regardless, I soon came back to reality and realized that I did nothing wrong. A few minutes passed and the original officer came back to us to let us know that we were free to go and that he legally has nothing to hold us on. He added that the IRS agent he spoke to was “around the corner” and driving over to the Walmart to speak to us but we could leave if we wanted. This kind of made no sense to me but I chalked it off as him implying that I should stay. In addition, I actually had some questions for the IRS agent about taxes on Manufactured Spending so I decided to stay. It was probably the worst decision I made that night.
The IRS agent showed up within 10 minutes and proceeded to introduce herself and explain that at no time were we being held and that everything we did going forward was voluntary. The conversation as follows was captured in my mind to the best of my knowledge:
IRS Agent: “So, explain to me what you’re doing because this looks extremely suspicious.”
Me: “Well, I speak at events for something like this-“
IRS Agent: “What? Fraud? Identity Theft? Money Laundering?”
Me: “Manufactured Spending…”
IRS Agent: “Let’s go to a room and chat, I also need one of you officers to act as my second interviewer.”
I think that this was one of the best parts of the night because both the officers weren’t expecting to be tied up in this issue any longer and this IRS agent just basically asked them to sit in on two interviews that could very well take hours. I almost wanted to laugh because both the officers looked at each other and were mentally playing a game of rock, paper, scissors to see who had to suffer. Eventually, the original officer decided to be the second interviewer.
The reason I say that staying was one of the worst decisions of the night wasn’t because they wanted to interview me but because it was around 8PM by this time and I realized that my money order deposit cut-off time was 9PM. In my head, I realized that I just screwed myself from MS-ing the next day because these funds wouldn’t clear in time. The thought of that made me a little sad and for a second, I forgot that I was being led to a room to be interviewed.
Due to the fact that I was with my friend, the agent decided to interview us separately. This process took forever. She probably spent close to 40 minutes with both of us individually asking us questions about what we do for a living, how we make money, why we were in Texas, etc..
I had previously tweeted that I was being detained and used the time that they were interviewing my friend to catch up on tweets and snapchat what was going on. I honestly was laughing really hard at some of the clever things people did on twitter like this:
@WhiskiBravo@ValueTravelerOz@TahsirAhsan@ftupic.twitter.com/iZH47sM16F
— HereAndThere (@TravelNSO) February 4, 2016
Eventually, my interview concluded and I have to say that by the end of it all, the IRS agent and police officer were sort of laughing at everything that was going on and the whole concept of Manufactured Spending. While leaving, the asset protection agent actually apologized to me for what happened and said something about the fact that usually, she deals with things like this and that the police shouldn’t have been called in the first place, let alone the IRS agent until she was better able to gauge the situation. She also went on to explain to me that they were also extremely prone to fraud at that exact location and everyone was being very cautious.
I did ask the IRS agent some questions about taxation with MS and other things but as usual, most government agents want straight answers but will never give any back to you. Either way, it was very interesting to talk to her and see why they are so worried about people using fraudulent gift cards. I can’t stress enough that both the IRS agent and police officer were extremely polite after they realized that I wasn’t a drug dealing, money laundering, identity thieving…guy.
If you’re interested in knowing whether MS is taxed, I will point you to THIS site which states:
The reason credit card rewards have typically not been counted as taxable income is because they are viewed as a rebate. For example, if you spend $100 with a card that gives 1% cash back, the $1 you receive is merely a rebate on the money you spent.
And this IRS document which states:
A rebate received by a buyer from the party to whom the buyer directly or indirectly paid the purchase price for an item is an adjustment in purchase price, not an accession to wealth, and is not includible in the buyer’s gross income.
The same IRS document came to the conclusion that:
The portion of the credit card purchases that Taxpayers can either receive back in cash or request Company to pay to a charity does not constitute gross income to Taxpayers under § 61.
I will not take a side in this argument but am simply giving you links to make your own conclusion as to whether MS is taxable.
On a side note, I used to have a high school teacher that was extremely sarcastic. While I was talking to the agent, I noticed a sense of sarcasm and instantly was reminded of my teacher. If it helps, she was really nice but seemed like the person who would be like:
Me: “Can I go to the bathroom?”
Agent: “I don’t know, CAN you?”
Me: “Ugh, MAY I go to the bathroom?”
Agent: “Yes.”
What I Learned (Some I Already Knew)
- As someone who spends a majority of his day at Walmart, I see the good, bad and gross. I also see the different types of people that work there and while most are really nice, there’s always that one person who thinks they know it all. I ran into this entire issue because a single cashier overstepped her boundaries and got involved in a transaction she wasn’t part of. This led to a chain reaction of events that ended up wasting a police officers time and an IRS Agent’s night but more importantly, my ability to deposit money orders.
- I didn’t get flagged at any point because of the amount that I did, I got flagged because someone thought I was being uncooperative with them, which wasn’t the case. I know a ton of people are going to say it’s because I was doing too many money orders but it wasn’t.
- Even though I wasn’t guilty of doing anything except being best dressed inside of a Walmart, everyone sure made me feel like it for a little bit. I guess there is something really difficult about believing a guy who can prove that he legally purchased gift cards to earn points.
- You need to be calm and collected. Make valid arguments and tell the truth. I told my story 4 times before anyone decided to listen and on the 4th time around, the officers were actually amused by what I was doing.
- Keep records. This was reiterated to me by the IRS agent and one of the only things she was pretty clear about.
- Be fearless. People see fear in your eyes and capitalize on it. If you know you did nothing wrong, stick with it. Don’t ever change your original story because of something new you learn in the middle of an interview. Tell the truth to the best that you can.
- The people of twitter are amazing. The whole reason I was so calm during the whole process was because I was reading the responses from some followers and just taking my mind off of the entire issue.
- If you get flustered or nervous, breathe and start fresh. I know a lot of people that get really nervous around law enforcement and it makes them look kind of weird. Remember to breathe. If you actually get arrested, remember your rights and call an attorney. You may also seek the services of a bail bondsman if you need bail bonds assistance. You can even find a late hours bail bondsman if this situation has occurred at odd times.
Some Things I’ll Never Understand
If the government is so worried about illegal activities and money orders, why do they allow places to sell money orders with cash only? Why do they let stores sell gift cards with cash only? I don’t understand the fascination of places that are CASH ONLY. If I was a criminal with black money, why would I take it to a store to buy a gift card? Wouldn’t I just take that cash and get a money order directly? Wouldn’t it be easier and safer to only allow gift card purchases with Debit or Credit so that it would be traceable all the way back to the buyer? How is cash so technologically traceable that you can pinpoint where exactly a dollar bill was at 4:31 PM on a Monday? These are things i’ll never understand. I do understand that processing fees play a big role in Cash Only establishments but they should say that from the beginning instead of training their employees to give a blanket statement of “money laundering.”
Is Manufactured Spending Illegal?
No. Simply put, in no sense is manufactured spending deemed illegal. Just because someone else doesn’t understand what it is doesn’t make it illegal. If anyone says that manufactured spend is the same as money laundering, walk away if you can and if you can’t, ask for a lawyer because you’re not going to change that person’s mind. You should always be very wary of choosing a lawyer but checking online reviews can help a great deal there (fake ones are usually easy to spot). We found https://www.newjerseycriminallawattorney.com/hudson-county/ by checking their reviews and there were really good (and much better than any competing local criminal defense lawyers), so this just shows how this works so well. The most you can do is look at them with the stupidest face you can ever make. In all honesty though, although money laundering has very similar traits to how some people MS, there is one key word that sticks out and helps to deem whether it’s legal or illegal: Illicit. Last I checked, I wasn’t selling myself on the street corner and using those funds to buy a gift card and then buy a money order.
The worst thing that could possibly happen is that this post can turn people away from manufactured spending. Being able to game this so called “hobby” is one of the reasons i’ve seen so much of the world. It’s the reason i’ve made some amazing friends. To push away people from trying to MS is wrong and i’d rather be the one to educate them on how to do it if they truly are interested. I realize that it’s not for everyone but neither is mooing. Not everyone is going to accept it and I learned that it’s better to walk away instead of wasting time trying to teach someone who doesn’t want to know.
What Will I Do Going Forward?
I’m going back to that Walmart tomorrow and returning some items one-by-one to the cashier that decided to waste my time.
Honestly though, I won’t be doing anything differently because I didn’t even do anything wrong. I will keep buying gift cards and I will keep buying money orders. I’m going to keep MS-ing and if I run into any other trouble, i’m going to write about it.
I will not be giving tips on how to manufacture spend on an online level anymore. I will only be doing so at the conferences I speak at because it’s just too detrimental to others to write about online.
Please feel free to share your experiences if you have any in the comments below. Haters welcome as always!
I’m free guys. No one will stop me from MSing. I didn’t even have to buy cards but now I’m gonna because I can. pic.twitter.com/UkpufwndAA
— BengaliMilesGuru (@TahsirAhsan) February 4, 2016
