Manufactured Spending

Manufactured Spending is a process of (1) spending money on your credit card (2) in a way that can be converted into cash, and (3) using that cash to pay off your credit card. This is another way to help you meet your minimum spend requirements for sign up bonuses or generate extra points. However, certain card issuers are cracking down on certain types of manufactured spending. 

Here are my overall tips:

Start Slow– If you a new to a method, do a few smaller test transactions and slowly increase your volume. Some methods are region or location dependent and you don’t want to end up with a large number of gift cards that you cannot use.

Keep Records– If I buy a gift card, I instantly take a picture of the card and the receipt. I then try to immediately try to liquidate the card as soon as possible and keep records of everything I buy or use. If you fail to keep good records, you may end up misplacing a gift card and the corresponding receipt, which would mean you lose whatever amount was on that card.

Be Courteous–  Follow the Golden Rule. Be nice to everyone and you will have more success. If you frequent a certain location, make friends with the cashier or person you regularly deal with. This will build trust and allow you to increase your volume at that location.

Methods Are Be Shutdown– Anytime there is a great well-known method, expect it to be shut down with a few months. Usually, 2 or 3 methods die each year. 

Location Dependent– What works in one city, state, or even specific store might not work in another. Therefore, start slow when you go to a new location. 

Don’t Get Over Your Head– Just in case you have trouble liquidating a gift card or item, don’t buy more than you can afford if you had to wait a month to liquidate or convert the item. Always have a backup plan just in case on method is unsuccessful. 

Visa Gift Cards (“VGCs”)

To Manufacture Spend using VGCs, you need to buy VGCs then convert them into a cash equivalent.  My favorite is to convert VGCs into Money Orders and then deposit the money orders into my bank account.

Buying Visa Gift Cards

Simon Mall

  • Fee: $3.95
  • Locations (not all locations will sell gift cards; to check go to “About”, then scroll down to Amenities and see if the location offers “Simon Mall Gift Cards”). Usually, you can buy up to $8,000 per day. 
  • You can also buy them online, but I advise you limit the number your order to prevent a shutdown. 
  • American Express will no longer count Simon Mall VGCs toward minimum spend.

GiftCardMall.com

  • Website
  • Fee: $5.95 for $500
  • Note:  I would avoid doing a large amount of volume on this website. They will shut you down pretty quickly. You have been shut down if you get the message: “This transaction was not completed. The transaction was not submitted correctly or has been declined by your card issuer. You can try again with a different card or review your payment information for any necessary corrections.”

You can also buy Visa Gift Cards at Staples, Office Max, Costco, Sam’s Club, and Grocery Stores. However, the cost for the VGC is typically higher in these locations.

Converting Visa Gift Cards to Money Orders

You can liquidate is Walmart for most Visa Gift Cards for 88 cents per $1,000. However, over the past few years, it has been increasingly difficult to liquidate gift cards at Walmart.  Most stores now require you to fill out a form if you want to buy over $1,000 in money orders per day For more background, here’s a good long walkthrough

USPS has started to crack down on buying money orders with gift cards, so it appears you can no longer buy money orders there.

  • Buying Money Orders depends on the location:
    • Metabank Visa Giftcard: Works at Walmart
    • Metabank Mastercard Gift Card: Can potentially work at Walmart with a trick. (you only have a very small window to hit “cancel” before the machine tries to run the card as credit instead of debitt. I would only try this if you are a veteran at doing money orders at Walmart)
    • One Vanilla/Vanilla Visa Gift Cards: Will not work at Walmart for a money order $50 or more.
    • Note: You could potentially use the above Gift Cards at Grocery stores to buy money orders, but it is very store dependent.

Flyertalk Thread with Information on Banks and Depositing Money Orders

Note: I would advise against depositing money orders in your main bank account. Some banks could cancel your account or place restrictions on your account if you deposit excessive amounts of money orders. I would advise you spread out your deposits to a few banks and stay under $1,000 a week per bank.

Square

Square is one of the largest credit card payment processors. Square charges a fee of 2.75% per transaction. I use it a few times a week to assist in reaching minimum spending requirements or reaching minimum transaction numbers for a month to get extra points or avoid monthly fees. 

Sign Up Link (you will receive $1,000 in free processing and a free credit card reader)

Notes:

  • Start off slow and with small amounts. Use different credit cards so it seems like you have many different customers. This will help avoid a shutdown by Square.
  • You can change the name of the business easily in the settings of the mobile app. I do this frequently to disguise my manufactured spending via Square.
  • Samsung Pay will work with the free reader. Android Pay and Apple pay will require the contactless reader, which is $49, and probably not worth it. 
  • You can generate a profit of 1.75% with the US Bank Altitude Reserve Card by using Samsung Pay, Android Pay, or Apple Pay with Square. (Altitude Reserve offers 3x mobile payments and points are worth 1.5 CPP with airfare.)
  • To avoid receiving a 1099 tax form, stay under $20,000 in swipes and under 200 transactions per year. (Exception is Massachusetts and Vermont where the limit is $600)

Cruise Ships

Several cruise ship companies, such as Carnival, want to encourage gambling at their onboard casinos. Many times you can add money to your room card, which is charged to your room/credit card for free. You then play the penny slots a few times and cash out. Check the limits that the cruise ship puts on this practice and make sure there is no fee. Also, use a card without foreign transaction fees and you should also stay under $10,000 because you have to declare any amount above that at U.S. Customs. You will have to transport a lot of cash, so make a quick stop at a bank before you head home.