Five months ago, I wouldn’t have given one whit about this news.
Now, though, it’s crushing some of my major points-and-miles earning plans for 2020 and beyond.
Back in July, for the first time, we started experimenting with using gift cards to increase our credit card spending, to earn points and miles and hit big-spend thresholds like spending $15,000 on the Amex Hilton Surpass in a calendar year to earn a Free Weekend Night Certificate.
We did a lot of experimenting, and along the way, we learned a ton about gift card acquisition and liquidation. Some of the deals we found were profitable even on a cash-in-cash-out basis (although those have become very few and far between now); most of them resulted in effectively buying points and miles and a very significant discount compared to their redemption value.
We kept careful records of our gift card experiments, and we reported on our early efforts. Our “Manufactured Spend Data Points” (MS DP) series was one of the most popular things we’ve ever done on Middle Age Miles. (You can find all of the articles in that series by going to Middle Age Miles Posts by Category on our right sidebar, and selecting Manufactured Spend from the drop-down list.) Philly and I were amazed at how many people wanted to read articles about gift cards.
In our gift card liquidation efforts, we’ve focused on online methods. (There are cheaper liquidation methods in-person, but they take a lot of time and may involve some risks that we haven’t gotten comfortable with.) One of our key tools has been Plastiq. Mastercard Gift Cards (MCGCs) are particularly useful with Plastiq, as they can be used for a wide variety of payments. In our experiments, we found some types of MCGCs that only incurred 1% fees on Plastiq, as opposed to the normal 2.5% Plastiq fee. Other times, we used Plastiq promotions to make payments with reduced fees.
On the extreme end, we even used a lot of gift cards on Plastiq during a “new business account” promotion. Within about 5 weeks, we hit the $50,000 spend requirement for the promo, with more than $35,000 of the payments funded by MCGCs. We wrote about the promotion here:
- Middle Age Miles: We’re Doing the Plastiq “New Business” 55k Fee-Free Dollars Promo – and Here Are the Details & Strategy Tips! (November 6, 2019)
With this experience of the past few months under our belts, we were planning to continue to use gift cards to finance Plastiq payments in 2020. We wouldn’t be doing volume of anything like our $35k+ during November, but several thousand dollars of liquidation per month, of MCGCs acquired through cherry-picked attractive deals, seemed likely.
Not any more.
This Week’s Plastiq News – No Payments Funded by Gift Cards as of 1/1/2020
On Tuesday afternoon (December 17), we received an email from Plastiq. The subject line of the email was “An Important Update From Plastiq About Personal Prepaid Cards.” The gist of the message was that, as of 1/1/2020, Plastiq will no longer accept gift cards as a payment source.
In full, the email from Plastiq reads as follows:
|Hi Craig, |
We would like to let you know about a change to our service that may affect you. As of January 1, 2020, Plastiq will no longer support payments made with personal prepaid debit cards. However, payments made with business prepaid debit cards and payroll cards will continue to be accepted.
After this date, all scheduled payments made with personal prepaid cards will be declined by Plastiq. Starting January 2020, you will be unable to add a personal prepaid debit card to a Plastiq account.
From now until January 1, 2020, a limit of $7,500 in total payments will be enforced on Plastiq accounts that continue to utilize this payment method. Once this limit is reached on your account, further payments using a personal prepaid debit card will be rejected.
This change does not impact any payments made with credit or debit cards on the Discover, Mastercard, Visa, and American Express networks.
We apologize for any inconvenience that may result from this policy update. If you have any questions or need assistance with your payments, please reach out to our service team via live chat on our website or by email at firstname.lastname@example.org.
The Plastiq Team
In case you have any doubt that the new ban on “personal prepaid debit cards” means “gift cards,” Plastiq published a Help Center article that makes this clear. According to the article, the ban on “personal prepaid debit cards” means that these types of cards are excluded:
- Gift cards
- Retail cards
- General-purpose reloadable cards
Before the gift card ban goes into effect, though, Plastiq has given us a bit of runway. From now through 12/31/2019, you can use up to a total of $7,500 in gift cards per Plastiq account to fund payments.
After we received this email, we went into our Plastiq account to make a payment funded by a gift card. The payment went through fine, as would be expected in light of the email message. As a reminder, though, the following message appeared at the top of our payment confirmation screen:
What Do We Do from Now Through 12/31/2019?
For now, we’ll try to maximize the $7,500 of runway that Plastiq has given us. The limit is per account, and Philly and I each have our own accounts, so we have multiple $7,500 limits available to us.
And, given that this liquidation option is dying in a few days anyway, we’ll spell out a few secrets here to help Middle Age Miles readers.
To the extent possible from now through 12/31/2019, we’ll use Plastiq to liquidate MCGCs that qualify for a reduced 1% “debit” fee. What types of MCGCs qualify for the 1% fee?
First, MCGCs issued by Metabank that are registered at mcgift.giftcardmall.com qualify for the 1% fee. For us, locally in the north Dallas area, these gift cards are sold at Office Depot/Max and Staples in denominations up to $200, and at Tom Thumb (a Safeway-affiliated supermarket) at denominations up to $500 (most stores have a limit of 1 per day). The cards look like this:
Second, One Vanilla MCGCs also qualify for the 1% fee. One Vanilla MCGCs in their packaging look like this:
Another thing that we’ll do is continue to acquire MCGCs at Sam’s Club, using the current Amex Offer for +4 bonus Membership Rewards (MR) points per dollar at Sam’s. Most of the MCGCs from Sam’s incur a 2.5% fee on Plastiq (if you find a One Vanilla MCGC, it will be 1%), but we can use FFDs that we’ve accumulated on Plastiq to liquidate these cards for free.
And what will we pay with these MCGCs? Credit card bills. For now, it’s possible to pay a credit card bill by check via Plastiq, funded by a MCGC. Enter your credit card issuer as the payee, input the address that appears on your statement, make sure your account information is complete and correct in the available fields on Plastiq, and make the payments. We talked about this method in some of our MS DP articles. That gave our dedicated readers some insight, but we haven’t wanted to cast any brighter light on it. Now, though, since MCGCs on Plastiq are dying in a few days, we’re reminding everyone again of this very useful strategy.
With these strategies, we believe that we’ll be able to utilize our $7,500 limits to “profitably” acquire some extra points and miles before year-end (more precisely, as we noted above, we’ll be acquiring points and miles at a substantial discount compared to their redemption value).
What Will We Do as of 1/1/2020?
This change will put a big crimp on our ability to liquidate online. We have one reliable and reasonably-priced online liquidation method that we’ll continue to use. However, that method is bandwidth-limited, and we’re also concerned that it’s fragile; thus, we’re not going to highlight it further at this time.
Beyond that, we’ll continue to experiment periodically to see if we can find other online liquidation options. Doxo could be a possibility, but its normal fees are exorbitant at 3.6% or more, and we’re no longer aware of any gift cards that qualify for low-cost liquidation under the premium DoxoPlus service.
Will we start to use in-person liquidation methods? Probably not. That’s still not a world where we’ve reached a comfort level.
What do you think of this Plastiq news, and what do you plan to do? Please let us know in the Comments!
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