Ok, what if you really don't need MS that much?

What if you really are apprehensive about the "quasi illegal" appearance of Manufactured Spending?

  • Don't be a chicken

    Votes: 17 32.1%
  • Be careful

    Votes: 38 71.7%

  • Total voters
    53

docntx

New Member
OK, the good news, I do not need manufactured spending. The bad news, as any small business, I struggle paying all my bills sometimes. Nonetheless, manufactured spending would seem to attract the crosshairs of many federal (and local) entities. Any thoughts?
 

JJAviator

Level 2 Member
Only get into it if you are positive you can pay your monthly bills in full 100% of the time. Otherwise, avoid this hobby.
 

Matt

Administrator
Staff member
OK, the good news, I do not need manufactured spending. The bad news, as any small business, I struggle paying all my bills sometimes. Nonetheless, manufactured spending would seem to attract the crosshairs of many federal (and local) entities. Any thoughts?
Can you clarify your question?

Why do you not need manufactured spend, but go on to say you struggle to pay your bills?

It's not making sense to me as put.
 

cdancer20

Level 2 Member
Only get into it if you are positive you can pay your monthly bills in full 100% of the time. Otherwise, avoid this hobby.
I second this statement. If you can't pay your regular bills, avoid MS. You need to have some type of comfortable float in this hobby. Things change at a whims notice and if you don't have a backup plan or can float that money, you will be SOL.
 

docntx

New Member
Can you clarify your question?

Why do you not need manufactured spend, but go on to say you struggle to pay your bills?

It's not making sense to me as put.
Thank you for the request for clarification. I am a physician, and I should probably put "struggle" in quotation marks. The bills do get paid always, some months the cash flow is slower than others, so, my whole tightly knit small office will all breathe a collective sigh of relief when the insurance companies checks finally come in after multiple b.s., delays and denials. Guess any business of this kind is similar, and/or seasonal.
Having said that, we run EVERYTHING through credit cards, use portals, etc, and never carry a balance, so MS seems unnecessary to our situation.
But, looking from the outside in, MS would seem to be magnet for IRS/Homeland Security type inquiries, I am almost surprised we do not see stories about some inquiries more often.
Please do not misunderstand me, as I love to read about the amazingly clever forms of MS, and am extremely grateful for the generous way in which this community shares their "tricks of the trade."
 

Matt

Administrator
Staff member
But, looking from the outside in, MS would seem to be magnet for IRS/Homeland Security type inquiries, I am almost surprised we do not see stories about some inquiries more often.
Perhaps your interpretation of it is unduly skewed? It certainly has enough publicity to be on the radar for such inquiries, if it isn't receiving them then maybe they view it differently than you do?
 

docntx

New Member
Perhaps your interpretation of it is unduly skewed? It certainly has enough publicity to be on the radar for such inquiries, if it isn't receiving them then maybe they view it differently than you do?
I have been in the miles and points gig for over 30 years, and it has been an enormous blessing in my family's life and mine. Ultimately, it is a fabricated world with fabricated currencies which we have learned to use.
Maybe my hesitancy is related to my ignorance on the subject. While "getting in trouble" with a card issuer or award program might seem catastrophic, it would be nothing compared to what some agencies could possibly do under the wide blanket created by the "Patriot Act." Whenever I have asked for clarification as to what might be considered "money laundering" from "experts" or Federal Agents, their responses seem ambiguous at best. Perhaps it is in the adventurous nature of those who are attracted to the miles and points world that makes some "push the envelope." Grateful that others share their experience. This is not meant negatively at all, perhaps exasperating "food for thought." What would be our protection if we should ruffle the wrong feathers?
Again, thank you for allowing me to join the conversation.
 

Maverick17

Level 2 Member
I'm a little confused by this thread, as I still don't get the connection between "struggle to pay the bills" -> "we need MS". Are you looking at cashback via MS as a way to be more comfortable in your situation?

Either way, I suppose your real question is attracting authorities. If you don't want to MS, because maybe your industry has a lot of "prosecutorial" eyes on it with insurance fraud and such, then don't do it. If you do want to MS, then just dip your toes. Not everyone pushes the envelope to the limit on this, and you sound like you're getting decent bang for your buck with portals and using cards as much as possible.

There are various threads about authorities getting involved. Just this past week there was a blog post you might look for and read, and comments also by Matt (who commented above) in a further post discussing the issue. So far the general opinion is that MS is not illegal, and so everyone we know of has had it resolved, although legal bills could be involved. There are some threads on structuring, which you might look for and research, as that can be more problematic it seems. If anyone ever gets charged with fraud, I'm sure we will all know about it.
 

Someone

Level 2 Member
I'm a little confused by this thread, as I still don't get the connection between "struggle to pay the bills" -> "we need MS". Are you looking at cashback via MS as a way to be more comfortable in your situation?
I think he's saying that through his business he has enough regular spend that he doesn't need to manufacture transactions to generate extra points.

I've been in this situation with a couple of my businesses but inevitably when dollar amounts get too big, suppliers demand wires. In the olden days (late 90's) there were some cc checks that earned points, but it's been a looong time since those went away.

I think @docntx is implying that if you do not like/are scared of manufacturing spend and the potential consequences, that you should develop a business wherein you can pay your suppliers with cc's to generate all the points you need. This is essentially what the reselling folks are doing.
 

Matt

Administrator
Staff member
I think he's saying that through his business he has enough regular spend that he doesn't need to manufacture transactions to generate extra points.
My view on this is that if you don't need to MS, don't. It is just another job. If you have enough points to achieve your travel goals, go travel.

No different from stripping.
 

knick1959

Level 2 Member
My view on this is that if you don't need to MS, don't. It is just another job. If you have enough points to achieve your travel goals, go travel.

No different from stripping.
To me, just like stripping, MS comes in all sorts of selectable levels. You can MS big-time or MS-lite. I used to only MS-lite where I only did GCs and such to cover minimum spend. I've since expanded towards the other side, then contacted ... and repeated. I have specific goals that don't require too much MS and I typically MS only for strategically placed miles. I've got a few folks at work into starter credit cards and when they tell me they are worried about meeting min spend (CSP at $4k in 3 months), I tell them to do what they can for 2 months, and then buy gift cards to make up the difference. Use the gift cards at their leisure over the course of the next 5 years, if needed. It may not be MS, technically, but it's the same principal and perhaps MS slow/starter with training wheels.

MS is a tool to be applied when needed and at an individual's comfort level. Some of us strip only to skivvies and a t-shirt :).
 

newtoca

Level 2 Member
Different strokes for different folks. Don't do it if you're uncomfortable with it.
I think MS and this hobby in general has been a great enabler for me,not just the obvious benefit of travelling I have picked up some significant life lessons along the way. Sometimes you need to take some risks/ step out of comfort zone to get an extra mile. As long as you are not doing something inherently illegal like structuring there is no law that forbids / outlaws MS, it may however appear to be illegal. I think I would rather have few minutes of awkward conversation at Walmart or be questioned at airport (if it comes to that) if it provides me an opportunity to travel as much as I want to provide a steady supplemental cash back.
 

MickiSue

Level 2 Member
Supporter
Newton FTW. I am not a big fan of the MS runaround, because I don't enjoy running around for pennies.

I much prefer the reselling angle, because then the running around is lessened (buy online) and the pennies become dollars become hundreds become thousands, if you use the right combination of risk and caution.

Of course, the thousands can become tens and hundreds, as well. (Talking monthly). I'm not sure if I'm headed that far north. But at least I have a compass.
 

janetdoe

Level 2 Member
Whenever I have asked for clarification as to what might be considered "money laundering" from "experts" or Federal Agents, their responses seem ambiguous at best... What would be our protection if we should ruffle the wrong feathers?
Money laundering is a pretty simple concept. If you received money for doing something illegal, and you move that money around in order to make it appear that the money came from legal sources, that is money laundering. If you aren't doing anything illegal, or trying to cover up where your money came from, there's no money laundering.

Manufactured spend, under any guise/method I can think of, is not money laundering. Some of the techniques (buying large amounts of money orders, moving money between bank accounts, etc) may be techniques used by money launderers. But worrying that you are money laundering, simply because you are using MS techniques, is akin to a farmer worrying that he shouldn't buy large quantities of fertilizer, because terrorists use fertilizer to make bombs. While I have pretty much complete contempt for DHS, I haven't heard anything that stupid. Yet.

The only way your concerns would make sense, IMO, is if you had some connection (ethnicity, religious activist, friends and family, etc) to a country or region that is deemed a source of 'terrorism'. If you are already under scrutiny for other things, moving around huge chunks of money and money orders through multiple bank accounts could be the red flag that gets you investigated in depth as a result of the Patriot Act.

As far as "ruffling feathers", what is your normal protection when you ruffle feathers? Your protection is basically that you aren't doing anything illegal and the feds you are worried about have real criminals to catch.
 

Benjamin

Level 2 Member
Do folks typically MS with a specific redemption in mind? Thus they can guarantee the value of the points/miles and what they will truly be worth.

or

Is the MS part of this world more focused on just straight stacking miles/points? Then having them for whatever they decide is a worthy use.
 

MickiSue

Level 2 Member
Supporter
Different people do it different ways, Benjamin. Me, I do both.

If there's something in particular that needs topping off, that's what gets the bulk of the spend in any given month. OTOH, I want to know that, should the opportunity arise, I can jump on a mistake fare and be able to pay for my hotel with points, and possibly the fare with points, as well.
 

Gooseberry

New Member
Newton FTW. I am not a big fan of the MS runaround, because I don't enjoy running around for pennies.

I much prefer the reselling angle, because then the running around is lessened (buy online) and the pennies become dollars become hundreds become thousands, if you use the right combination of risk and caution.

Of course, the thousands can become tens and hundreds, as well. (Talking monthly). I'm not sure if I'm headed that far north. But at least I have a compass.
Is reselling really that profitable? The more I read, the more I see people barely break even, especially with returns, reselling fees, etc.
 

MickiSue

Level 2 Member
Supporter
Is reselling really that profitable? The more I read, the more I see people barely break even, especially with returns, reselling fees, etc.

It is if you pay attention to it, and treat it like a business, not a new and different way to collect miles and points. It's work, but it's frequently different work than typical MS work: buy something here, use it to load something there, pay your CC, rinse and repeat.

Reselling is more learn about buying and selling patterns, find the most efficient ways to get your products to the end buyer, know how to monitor sales and returns for best practices, keep track of what gets returned and why so you can deal with the returned product, etc.

But the single most important part of reselling, IMO, is to be willing to pass up what seems like an awesome deal on things that may or may not sell, or, worse, that will rapidly decline in price and not bounce back up.
 

nashharley

Level 2 Member
how much of this is truly "reselling" ie: just finding great sales and then reselling, vs finding ways to purchase products wholesale, and selling at retail?
 

MickiSue

Level 2 Member
Supporter
how much of this is truly "reselling" ie: just finding great sales and then reselling, vs finding ways to purchase products wholesale, and selling at retail?
Reselling is reselling. Wholesale or retail arbitrage, doesn't matter, if you pay attention and get good to decent ROIs.

Some people will buy at slightly reduced retail and sell for minimum profit, just for the points. But that's a really good way to get burned, IMO, and there are easier ways to earn points and miles.

The whole attraction of it to me is that I can make steady use of the CCs, and post decent profits.
 

montmorency

Level 2 Member
I hope I will not "progress" to reselling - it seems way too time-consuming, especially for someone who has a regular full time job (although perhaps more rewarding) But! Who knows - MS is so addictive...
I started with the goal to quickly reach sign-up bonus requirement, then - to make a specific redemption possible, and now I feel this need to do it even without some concrete goal. But I guess - as far as hobbies go, MS beats knitting! :)
But on a more serious note, I do strongly agree with other posters - being able to tolerate financial risk, paying your bills on time and being very organized are essential to this hobby.
 

daveinla

Level 2 Member
I voted for "don't be a chicken", but obviously you have to be careful. One of my biggest regrets since I started doing this in 2012 is that I was TOO careful initially, like buying VR in $500-1000 increments at OD while others were clearing out the racks in 1 transaction. Lots of lost opportunities.
 

docntx

New Member
Thank you all for your comments. Found myself smiling, and understanding what a diverse bunch we all are, pushed by a spirit of adventure, shaking our heads a the daring souls who "push the envelope," but grateful for the lessons shared. If you recall the lesson about "boiling a frog," I sense that there is this relentless erosion of the rewards, and loopholes are closed, so more are found.
 

ToothMiles

Level 2 Member
MS should be done with end in sight otherwise it's just points / miles in your account waiting for another devaluation.
 

jredmond02

New Member
As someone who is an addict. Let me tell you, Reselling, especially RETAIL ARB is so addicting.
Walking around Kohls and stumbling on $500 in profit from some GPS systems in the clearance bin is quite a rush.
 

stron

Level 2 Member
I voted be careful. I've done very little MS, hoping to increase it. Hard to do with long work hours, but I try.
 

MickiSue

Level 2 Member
Supporter
For me, if I KNOW that what I'm doing is legal, then I don't give a dang about what someone else thinks about it. Most people are pretty opinionated. And the more ignorant they are about a topic, the more opinionated.

So, if I've done my own due diligence, I've drawn my lines in the sand at things I will and won't do (WILL: buy GCs that can eventually go back to cash. WON'T: buy high ticket items with a CC and return for cash.), then I am comfortable with my decisions, and I don't sweat it.

I will admit that I prefer the mostly jammy method of the style of reselling that I do. Kohl's has a website, too, you know. :p
 

Felix

Level 2 Member
So I get that MS is legal, but what can I do to avoid being under the radar for "sketchy" activity.
 

Fred

New Member
So I get that MS is legal, but what can I do to avoid being under the radar for "sketchy" activity.
I believe if you can get away for recycling and MO then you should be fine. I like resell more than MO. That's just my way and I feel more comfortable.
 
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