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Confessions of a manufactured spend expert

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My recent posts on the 3V Virtual Visa card have focussed minds on the topic of ‘manufactured spend’ – ie creating artificial financial transactions purely to generate credit card spend to generate airline miles.

It is very low-key topic, because by definition it depends on people not overdoing it.  3V is different because the cards are being used as they are intended and because Tesco is big enough to have enough stock.

The Range

With so many prepaid cards now on the market, there are clearly other opportunities.  If you have a branch of ‘The Range’ near you, for example, this Flyertalk thread outlines an interesting game you can potentially play with their prepaid card.

(I have never been to ‘The Range’ and, living where we do, I am very unlikely to do so, so you won’t find me posting about this one unfortunately.)

I received this email from a Head for Points reader who wanted to share some of his experiences.  He gave me permission to reproduce this (I have done some minor editing and merged two emails into one story):

a)  My first purchase was a o2 Money Card whereby you could top-up in o2 shops with Amex (technically not permitted but no staff knew about the card and it went through the till points no problem) and then withdraw at £200 a time from cashpoints. This card has since been withdrawn but I had to stop after reaching their £10,000 per annum top up limit.

b)  I moved to the Orange Cash Card when this was released. This card could again be topped up in Orange shops using Amex in the same manner as the o2 Money card. The problem here was withdrawing the balance as there were no free cash withdrawals with this card. I did this in a number of ways:

Depositing the balance at MetroBank branches. Unbelievably when they first opened they were allowing customers to deposit money into their accounts via POS terminals. I never did test whether CCs would have worked but they accepted the Orange Mastercard Debit no problems. This was eventually shut down after this was detected by the bank’s Operations Manager and my account was closed.

Purchasing shopping centre gift cards issued by Flex-e-Card. These were issued as Maestro debit cards supposedly only to be used within the shopping centre listed. They however were able to be used at any physical POS Maestro terminal (not online – you had to sign for these, no chip & pin). I liquidated these through an obscure feature called Saveback at Sainsbury’s which allows you to deposit money into online Sainsbury’s bank accounts in-store in similar fashion to ‘cashback’. Money from the Sainsbury’s online account would then be wired back to my LTSB account.

c)  I purchased UKASH vouchers from Co-Op stores from their Paypoint terminals using the Amex (again no Paypoint transaction is meant to be permitted using credit cards but the Co-Op terminals processed the payments no problem). These were then deposited into bookmaking accounts and bet on extremely low odd results with the winnings then withdrawn back to my bank account or with some bookmakers in cash in their stores. [This was not risk free as I could have lost the bet at the bookmakers – I worked in the industry so perhaps would have more confidence than others with this].

I would like to say that sometimes positive externalities will also come your way. For the Orange Cash Card not only was I accruing miles by topping the card up but each £ I topped up I was also given Orange points to redeem on their side for things like money off bills and in store vouchers. And with the Maestro shopping centre gift cards, even more unbelievably, the volumes I was purchasing these in meant I was offered me Kindles and iPads as sales incentives to keep me with their centre when I indicated I was considering heading elsewhere.

One thing I would however highlight about all of these schemes is they all have pretty finite lives.  The o2 Money Card was restricted up to £10,000.  The Orange Cash Card was revoked by the issuers on suspicion of money laundering (despite me providing ample documentation to the contrary – I think in the end I was just costing them too much money).  The MetroBank account was closed after an investigation by the Ops Manager,  the UKASH vouchers were eventually traced back to me and I had to provide notorised documents showing the provence of the funds to one of the gambling sites I had been using.

The reader ends with some sound advice as to why you will never find a huge amount of detail on this topic on the internet:

A lot of the activities that you will conduct to simulate manufactured spending will essentially mimic money laundering type actions and as such will often arouse suspicion. Other actions will only be able to be taken so far or undertaken so many times before a stop will be put to it. That is why it is pretty much impossible to publicise specific schemes to wide audiences in the way that the US Mint coins were.  The best way for people to be able to fly under the radar is to inform people through past examples so they can find their own.

Comments (41)

  • Tangey says:

    The guy on flyertalk who has been investigating the range for over a month has yet to get the system to work for him, in particular the all important bit of being able to withdraw to a bank account. The latest info suggests the website has the option in place. But there has been no report of whether its working or not. Tread carefully unless you are sure you know the system.

    • Steve says:

      That person is me.
      I’m hoping to pop to The Range this week IF I can get the system to recognise my phone number, as you need to top up the card, from the vouchers, via SMS.

      However with the current 3V cards at Tesco I don’t see the point in (me) doing a 90 mile round trip for the sake of £1:1 mile when the 3V currently gets me £1:225 miles.

      • Steve says:

        My mistake – its early!!
        its 1:9.5 – which is still much better.

        • Simon says:

          Hi Steve, I’d phone ahead and make sure The Range you are heading to sells the vouchers, I couldn’t see any in The Range I went in, I didn’t ask at customer services as I don’t have the card so they might have been hidden somewhere.

          • Steve says:

            I’ve heard that they keep them in the till because they are already ‘live’ and don’t need activation.

  • Idrive says:

    In addition to what said already, bear in mind the Tesco has very low fees for AMEX transactions as all these retailers. If you can even pay 45p for a snack or chewing gum everywhere (Tesco, Sainsburys, M&S), be sure it’s not a matter of transaction fees. Though, as long as you buy some groceries it should be fine for them (the small off-license round the corner lets you pay by card tobacco&beers only if you even by something else from the shop, without a minimum of even £5).
    Also, 3V can only be happy about their volumes getting higher and higher, gaining market from other prepaid cards. At the end of the day they get some sort of commission from VISA which receives the fee from retailers and having less fixed costs (no plastic cards costs), they have only administrative costs which are already paid for.Therefore that’s why small denominations for the gift cards.

    and no one can challenge you at Tesco because if you want to spend your balance on the internet and do not want to use your real card or have no prepaid cards or else…you are free to do so.
    It’s not Tesco to check the AML limit, it’s 3V. So, as all new things, it’s just ignorance on their side, in my opinion and they should just be happy. Have you ever been asked questions if you buy 10 bottles of Passata or 10 boxes of Cornflakes? 🙂
    I only had problems a few times when stocking up with Tesco Extra Power Pain Relief, a limit of 4 boxes per transaction and the cashier asking if I was planning to kill myself with them. therefore, i was buying 4, requeieng and buy some other 4.

    • Sir Stamford says:

      That’s a lot of Tesco Extra Power Pain Relief …

      If you use Idrive for your cloud back-up service, it is no surprising you need so many.

      Sorry I couldn’t help myself not posting this cheeky reply!!!

      Sir Stamford

  • Mike Jones says:

    Tesco Wembley has a huge stock of 3V cards. I’ve just had £200 worth and there was still plenty left.

    • sam says:

      Which Tesco store in Wembley Tesco Extra or Express?

      • Steve says:

        I’d say the Extra – might take a drive over tomorrow and see -will let you know

  • Bobby says:

    Tesco Hatfield must of had over £5k worth of cards this morning. I brought 50 and hardly dented their stock.

  • bookish says:

    Where are you finding the 3V cards in Tesco? Are they with all the other giftcards on the display? None at my local Extra, not even an empty space.

    • Trevor says:

      I’ve been checking my local Extra almost daily and the empty space has been filled with other cards which is exactly where they are.

    • Simon says:

      Same here, went back to 2 Tesco’s where I’d bought the last 3V cards last week and they had filled the empty space with other cards.

  • Colin MacKinnon says:

    Baby milk powder is also rationed: see google for China demand for foreign baby milk powder.

    So don’t use the 3V to buy painkillers and baby formula!

  • Andrew says:

    Is this CC bonus still on, the website says at the bottom that branded Visa cards are excluded?

    If so, does anyone know of a Tesco store in London that stocks them?

    • Steve says:

      In slink posted here last week or so there was a link to Tesco that said the Visa cards were included in the bonus cc offer – I’ve had over 3,000 bonus miles posted already.

      • Rob says:

        Yes, its on the website now as well if you click on the paragraph about Visa gift cards.

  • Mr Bridge says:

    this is money:
    “Consumer spending bounced back last month, giving a fresh boost to hopes that the economy may finally be starting to grow, according to exclusive research for The Mail on Sunday.
    Spending on credit and debit cards jumped by 3.6 per cent in April year on year, outstripping inflation and indicating a sharp upturn in consumer confidence, according to Barclaycard.”

    OR MAYBE IT WAS JUST HFP READERS BUYING 3V CARDS….LOL

    • Steve says:

      Just checked my clubcard statements – 12,000 VS miles posted today, and I wouldn’t hesitate to say that at least 8,000 of those are due to the £v cards

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