From the desk of the Devil’s Advocate…
Everyone gather round! Another popular manufactured spend technique has died and it’s time to decide whose fault it was.
As you all know by now, REDcard loads via credit card at Target bit the dust this week and like every super popular MS method that came before it (and that will come after it), there’s plenty of blame to go around. Thankfully, there are lots of possible culprits to choose from…
- Was it the greedy bloggers with their insistence on overpublicizing this method?
- Was it the heavy hitters who ran up tens of thousands of dollars in multiple REDcard loads every week?
- Was it the newbies to the hobby who naïvely lashed out at the occasional Target cashier who asked to see if their ID really listed their name as “A Gift For You”?
- Or was it the fraudsters who have nothing to do with the points and miles hobby, making us all just a tangential casualty?
The answer is obvious. Isn’t it? Well, to me it is, but let’s take these each one-by-one and see who we can pin this on.
Clearly it was the bloggers, right?
Nowadays when a technique dies, the first folks who get blamed are the bloggers. After all, we’re the ones who insisted on telling the world how one could get a bajillion miles for free just by loading the REDcard. If it wasn’t for all that publicity, this could have lived on forever!
There’s no denying that travel hacking techniques have a much shorter shelf life than they used to. The Internet allows information to travel farther and faster than ever before, and it’s rare that a really great method available to the national mainstream public is going to stay secret for very long. Eventually someone’s going to put it out there, and bloggers have a large readership, an interest in increasing clicks, and (for some blogs) affiliate revenue.
I am also well aware that it’s a bit hypocritical for me to claim that bloggers didn’t kill the deal while I’m blogging about it as a blogger in a blog post. Let it be known that this blog, though it is now known as Travel Codex, still maintains the rebel attitude of its original “Hack My Trip” moniker, which means our job is to write about non-conventional methods of travel. I like to believe that we do so responsibly, but some folks would still consider us part of the problem.
But asking a blogger not to write about a mainstream manufactured spend technique is a little like demanding no one talk about a mistake fare. It’s just not going to happen. It may have been feasible to keep things quiet in the old days, but that ship has long since sailed. If it’s on Twitter and Flyertalk and everywhere else, is it really fair to demand bloggers not talk about it too?
Yes, it would be nice if some blogs didn’t spoonfeed every bit of information, and it’s also reasonable to ask that bloggers take responsibility when they’ve clearly killed a little known deal. I’m not going to name names, but let’s put it this way — if you’re a blogger and no one wrote about it before you did, then it died within 72 hours of you posting about it, that’s probably on you. Maybe you couldn’t have known that would happen, but at the very least, admit it was you.
I happen to write a series called “Bet You Didn’t Know” which is literally gambling right in its title that I am going to tell readers about a technique that isn’t commonly known. If I eventually accidentally blow a quiet deal, I won’t be surprised if people with pitchforks come looking for me. So if that happens, I’ll admit guilt and quickly tell everyone I moved to Canada so go look for me there.
But when it comes to REDcard, this thing was everywhere. Bloggers had it. Flyertalk had it. Fatwallet had it. Reddit had it. Heck, there were REDcard sales on Ebay.
When everyone knows about it, you can’t honestly claim that bloggers alone killed it.
OK, then it was the heavy hitters.
If we’re going to blame one group, it should be the truly greedy people who went completely overboard, don’t you think? I mean, there’s a monthly limit of $5,000 in REDcard loads for a reason. I’m pretty sure that reason doesn’t include “go get REDcards for every cousin you ever had so you can load $40,000 a week.” Is it any wonder Target shut it down?
Of course, heavy hitters are easy to blame because no one really knows how many there are. In any given thread on Flyertalk or comments section of a blog post, there’s at least one guy (yes, it’s usually a guy) who claims he’s loading 28 REDcards from 102 credit cards every month. But most folks actually loading that much aren’t bragging about it. Comments like that are more likely the manufacturing spend version of the “Rule of Three” at work. So for men, take the amount they claim they’re loading each month and divide by 3 to get the real amount.
Even if all the heavy hitters were really hitting that heavy, there still aren’t enough of them to make a big enough difference, especially when it comes to a national corporation like Amex or Target. There’s plenty of other MS methods that are getting a hard workout by a few heavy hitters and they’ve survived, so faulting the heavy hitters probably isn’t reasonable.
Everyone knows the newbies killed it.
“Yesterday a Target cashier told me I could only load $1,000 a day by credit card! Of course, I angrily insisted that she call the manager over, even though he was in the middle of talking to the police about a shoplifter who had been trying to make off with a pile of Mossimo Supply Co. V-Neck t-shirts. But when he arrived, I loudly berated him about Visa and Mastercard’s rules for acceptance, the Amex prepaid terms and conditions, and my God-given right to load $2,500 a day on a REDcard that has my 5-year old nephew’s name on it. Now today I went back to that same store and they’re only taking cash and debit loads! What gives???”
Yes, reading stories like these is incredibly frustrating. But like the heavy hitters, there are probably fewer obnoxious newbies out there than we think. At the very least, most people — even those new to this hobby — are usually either savvy enough or nervous enough not to angrily challenge a cashier when they’re told “no.”
There’s always going to be rude folks, but some of those bad-mannered people are also experienced veterans who are just jerks that don’t understand you catch more flies with honey than vinegar. So blaming it all on the newbies doesn’t add up either.
The credit card fraudsters are to blame.
It’s hard to put an exact figure on this one because we just don’t have enough data to go on, but there’s no doubt prepaid cards that are loadable with credit cards are a recipe for fraud. Until U.S. banks finally come around to the fact that signature verification is a complete joke (name the last cashier at any store that even looked at the signature on the back of your credit card), we’re going to keep losing these methods to criminal activity.
Except that REDcard wasn’t exactly Amex’s first foray into the reloadable prepaid market, was it? Anyone remember when Serve was loadable for free with a credit card at CVS? It was only last year, so I doubt Amex had forgotten about it already.
No, when Amex and Target decided to accept credit card reloads, they had plenty of historical data and already knew exactly what percentage of fraud they could expect to deal with. They made the decision to allow credit cards with that data in mind. Unless the criminal activity was much higher than they expected (which is possible, but there’s no particular reason to believe it would be), it doesn’t seem like faulting the criminals for the end of credit card loads is a reasonable answer.
Come on! Tell us who we can berate for screwing up REDbird!
It’d be easy to sum up this post with “The Devil’s Advocate believes everyone is culpable” or “The Devil’s Advocate says no one is to blame.” But neither of those statements are true, because in the end it comes down to one thing…
Mainstream manufactured spend methods always have a short shelf life because they are easy.
The most popular techniques never require any research or investment. They’re simple. They’re available. With enough time, almost anyone can figure them out. Regardless of the publicity and the type of folks using it, eventually enough people would realize how to load a REDcard with a credit card and the system would become so expensive that it would have to be shut down.
It’s what I like to call Jurassic Park theory (not chaos theory but the other one). Real knowledge requires discipline to attain. Loading REDcards with a credit card wasn’t real knowledge. Real knowledge requires doing your own research and a little bit of work. You can learn the basics via blogs and forums, but manufactured spend techniques that require research and work will be the ones that stick around for the long haul.
So if you want to be a long term MS player, instead of assigning blame, that’s what you need to do.
Devil’s Advocate is a bi-weekly series that deliberately argues a contrarian view on travel and loyalty programs. Sometimes the Devil’s Advocate truly believes in the counterargument. Other times he takes the opposing position just to see if the original argument holds water. But his main objective is to engage in friendly debate with the miles and points community to determine if today’s conventional wisdom is valid. You can suggest future topics by following him on Twitter @dvlsadvcate or sending an e-mail to dvlsadvcate@gmail.com.Recent Posts by the Devil’s Advocate:
- Is the New 30% Rebate on Amex Pay With Points Better Than We Think?
- Devil’s Advocate Turns 1 Year Old. Let’s Give Something Away!
- It’s Time to Put the Chase Sapphire Preferred in the Sock Drawer
Find the entire collection of Devil’s Advocate posts here.
