My girlfriend is psyched because she recently got accepted to one of her top choice medical schools.
But the school requires a $1,500 deposit by next week, and she doesn’t have that amount of cash in the bank.
And gift card abuse is making it very difficult for her to get that deposit sent.
The school only accepts check or money order, so her plan was to purchase several Visa cards with a credit card, then use those as debit cards to purchase money orders to send to the school for her deposit.
This would essentially allow her to pay her deposit by credit card, which would allow her to avoid taking out a loan of some sort for the deposit.
Luckily Staples had a $20 rebate promo last week that would allow her to recoup some of the gift card fees.
But first, a huge chunk of boring background:
One of the standard practices for some points enthusiasts is to purchase gift cards from office supply stores with a credit card that earns a lot of points on office supply store purchases.
One example is the Chase Ink Plus card, which earns 5x Chase UR points on office supply store purchases, though this card is no longer available for new sign-ups.
If someone used that card to purchase Visa gift cards from Office Depot, they could not only make up for the purchase fee on the gift card, but also make a little green by using the 5x points for either 5% cash-back, or by maximizing the points through Chase’s Ultimate Rewards program.
After purchasing the gift card, they then use the gift card to purchase a money order, which can then be deposited into their bank account.
Jim buys $200 Visa gift card from Office Depot for $206.95 with the fee.
Jim goes to post office and buys a money order for ~$198.50, which, with the money order fee, may come out to $200.
He pays for the money order with his $200 gift card.
He deposits his money order into his bank account.
He pays most of his $206.95 credit card bill with the money he just deposited.
Since his Ink Plus earns 5x points at Office Depot, he earned ~1,034 Chase UR points, which he can cash in for $10.34 in cash back.
$10.34 – $6.95 (gift card fee) – $1.50 (money order fee) = $1.89
Yay, Jim made $1.89 in profits for his efforts, or even more if Office Depot had a promotion that offers, say, $5 off a gift card purchase of $200.
Since Jim loves to put his feet up when he flies, he could also use those 1,000 UR points to eventually buy a business class plane ticket for 50,000 United points, which he transferred from his Chase UR account.
That business class ticket would cost $2,000 if he paid in cash, so Jim feels like he got an incredible 4 cents per UR point, meaning he essentially got ~20 cents per dollar spent on that Office Depot gift card endeavor.
Problem is, Jim did that whole process 15 times in one week, and now his post office is scared that he’s committing some sort of fraud, even though the process is technically legal.
Among other scams, credit card thieves often buy gift cards with their stolen credit cards, so merchants get very wary of people using gift cards.
Even though Jim isn’t breaking the law, his post office is spooked by his 15 visits/week, so the manager decides to enact a change that causes those gift cards to be denied when purchasing money orders.
Jim is sad, and he now has to find a different place to purchase his money orders.
Neither my girlfriend nor I have ever tried Jim’s method, but we understand why Jim does it.
We understand that while Jim looks sketchy, he is not in fact sketchy.
Unfortunately Jim made it very hard on my girlfriend’s efforts to purchase a money order for school.
But she tried:
Attempt #1: Post Office
She went to her local post office and requested $1,500 in money orders.
After swiping her first debit/gift card to pay, then typing in the pin that she created, the transaction was denied.
She tried another of her cards. Also denied.
Unless we’re missing something, this post office (or all post offices?) doesn’t accept the MetaBank cards she was using.
Attempt #2: Safeway
Same deal as #1.
This time the customer service guy snorted at her and said money orders could only be purchased with cash.
Attempt #3: Wal-Mart
After some research, we learned that Wal-Mart will accept these cards often times.
Not our Wal-Mart though.
After a 40-minute drive to our closest Wal-Mart, the young customer service rep was nice and rang her up for the money orders.
Upon swiping her card and typing in her pin, the card was denied.
So, we officially failed and now will need to find an alternative method of getting her deposit paid.
Anyone want to purchase $1,500 in gift cards from her, in cash?
If anyone has any suggestions, please let me know!
*Update: After scouring the internet, we may have found a solution that will work. I’ll update when I can confirm!
*Update Feb. 3: I was looking through the weekly thread for “newbies” on Reddit Churning, and found this:
According to this user, I needed to request to split tender when paying at Wal-Mart, so that I could use multiple debit cards to pay for the money order.
Maybe this would have worked. Maybe not.
Luckily we found a way to liquidate the gift cards just in time to get her deposit sent.
Check out what we ended up doing here.