Back in the day, and no longer relevant at all.. there was a gig where you could earn 5x URs via prepaids. It was Vanilla Reloads. The gig was super, you’d buy your cards, pay $3.95 for the privilege, and clear 5x$503.95 in Ultimate Rewards. Good times… or so I hear, as I never actually managed to get one.. I looked a few times, which involved walking up from my gym on 30th st to somewhere in the lower 40s.. only to be disappointed that they had sold out. Damn bloggers.
Is 5x the holy grail?
I don’t know, but I know people like it – 5x on VR at office supply stores, lovely jubbly! 5% Cash back at grocery on the Old Faithful? Sounds good to me. Everyone loves a good 5x..
But 5x, what?
Sure, we can differentiate 5% cashback from URs and say the latter are worth more based on some celestial chart of value. But let’s leave that nonsense to the mathematicians and focus on the concept (its easier for me as I need to use less Excel in such posts) 5x what?
5x the transaction. This is a big deal. Think about it. You were able to pull off 5x for the transaction, but that’s just gross. Not ‘ewww’ gross, I’m talking Gross as in you need to deduct the costs of the transaction before you reach ‘Net’. To keep it simple, let’s talk cash not URs. If you earned $25 (ish, no excel today) and paid $4 (ish) you’d net $21. Just a swipe, and you get $21!!!
Uh Oh.. there’s a problem…
Unless you lived in the photocopying area of the local office supply store (I think some folk do in midtown) you’d have to walk from your $5M penthouse next door, which might take 8 minutes. Don’t have a $5M penthouse? Maybe you could walk up from your gym on 30th street instead? Say that takes 25 mins.
Then they are out of stock.
So you try again, and again, and on the third visit you hit the jackpot!!! They have them in stock. They sold you $2000. Boom, 10000 points, and some costs…
Well, here you made 3 visits. Each visit cost you 25 minutes (checks excel) so that’s over an hour of time to ‘just swipe’. But lets remember you only did half the job here, the acquisition phase. You still need to liquidate. In the glory days this was simple, now, it might mean a trip to Walmart.
The trip to Walmart
Some folks have a Kate, whereas I have to use humans… there is one CSR who just doesn’t want to play ball. She messed up my plan mid week, and on Saturday I popped in and she was on the desk, I walked. How many visits before I can catch her off shift? Maybe next time..
That swipe in this example is 75 mins (plus the swipe) +75 mins to get back to my starting point to earn, and another, what, 20mins x3 to dispose? I’m suddenly in for 210 mins for 10000 pts. Plus I paid money…
5x what, Bro?
How is 10000 5x [3 1/2hrs of messing about, and paying another $16 in fees]? It can be if we pretend that none of the ‘stuff that happens’ happened… but even then, in a perfect loop it isn’t just 5x the swipe. Best case it is 5x the swipe plus maybe 45mins, minus fees.
5x is super, but we really need to think about what we are ‘Xing’ when we make decisions. At a certain point, doesn’t 5x (4x net in cash) become inferior to 2x? What if you value Chase related pts at 1.5 cents, and BOA related pts at 1 cent.. if you can close cycle the transaction with BOA faster using different methods, doesn’t 1 cent become the better deal? A key variable that is always dismissed in this game is the time and effort multiplier. 2x in your PJs might just beat 5x in your Sunday best.
Sounds weird to you? Well, think about it, if you want to earn 1M pts a month, but not give up your day job, you can’t walk 10 blocks because a blogger said you could earn 5x for it….