It Worked! A Loophole In The Fine Print

So several months back I wrote about how I Figured Out A Way To Use ANY Credit Card At Costco and was pleasantly surprised by the way it worked.  I hate having to use my debit card for anything as I like the Alaska Air Platinum Plus card to get the air miles on the airline of my choice.  Jason brought up another interesting loophole as well though that I’ve proven works.

As Jason mentioned, “my wife discovered this loophole as well.  i just recently called my local costco and asked if i could cash out my cash card, and to my surprise she said i could.  all i have to do is get a supervisor to do it for me.  after hearing this i went online and ordered two $600 gift cards(the limit is $1K per card and i don’t think there is a limit to how many), which we’ll both use for costco gas and food.

my plan is to see how easy it is to cash out and if it proves to not be a problem, i am going to purchase an additional $2K worth of cards per month, cash out, redeposit into my banking account and get those air miles from my mortgage payment. i’m sure that would interest you. it sounds to good to be true. we’ll see.”

I bought a $700 dollar gift card, bought $200 of groceries (I never get out for less than a couple hundred it seems) – and went up to the customer service desk and just asked for the remainder to be cashed out.  The manager asked me why.  I told him it was to “pay some bills” and he didn’t bat an eye on giving the refund.

Honestly, it’s not his place to say whether or not you can cash out money anyway.  Say it is for your kids.  Say it is for gambling.  Say it is for 15 tons of ice cream.  The store manager isn’t your financial advisor giving a ‘yay’ or ‘nay’ on how you spend your money.  If you want to spend it on a tuna fish pizza tower, it is your choice.

But I really can’t see them caring either way; if he DOES raise a stink about it, so what?  So you want skymiles, they can change their policy if it is that much of a hassle.

The counter you go to is the same as customer returns anyway, the cash is there, the people are there, why not.  You bought the card, you see it fit how you’d like to.  It’s not costing them anything, they’re just transferring money back that you’ve spent.

I took a similar approach heeding Jim Casey‘s mention about not going over the 2k limit, “I don’t think a manager would let you cash out $2k gift cards, especially on a regular basis – Good luck with that! Plus the value of a $100 in miles is about $1. I don’t think I’d want to chance buying $2000 worth of Costco credit and then not be able to cash it out, simply for a $20 return.”

I agree with the point of airline miles not being worth much at all, and likely I won’t be able to turn a dime off of it, but will be able to save myself some $ when I get a free ticket on my next flight.

Additionally, I have about 3 or 4 Costco stores within driving distance in the Seattle area I live in, so I could bounce back and forth if the $ is right.It’s not about the money I can make by selling the skymiles, it’s about the $ I can save when I do decide to fly.

They’re not worth much on the “airline miles black market”, but they are worth something to me when I DO fly.  Last year I used them for a trip to Australia first class.  😉

Long story fairly short, it works.  Buy a gift card with your card here.  Buy your groceries at the store.  Cash the remaining balance out at the customer service desk.  Deposit the money back in the bank.  Pay your credit card bill off.  Get the airline miles free of charge.

25,000 is a free flight anywhere in the USA, and I rack up a LOT of miles using my card day to day for all my purchases. Anyone out there know how to put your mortgage payments on a credit card yet?  Now THAT would be an idea I’d like to dip in to – please let me know when you figure that out.

photos by: AgentAkit, jslander, colros

Filed Under: adviceCredit Cardsfinancial educationFrugal