Many people have known that Amazon Payments is an easy service to manufacture spend of $1,000 a month. You can send $1,000 to a friend with a credit card and no transaction fee. Just call it “goods and services.” Your friend then withdraws the money to a checking account and can give the money back to you to pay your credit card bill. Or your friend could send a third person $1,000, and that third person can send you a $1,000.
Just make sure to have at least three people in your circle, as sending money back and forth between two people is more likely to be noticed and shut down. It’s an easy way to earn at least 12,000 miles a year for free. And assuming your friends are cool letting you use their accounts and don’t want the miles, you can even use the same credit card for all three transactions in the circle.
But what if there wasn’t a cap? It’s long been possible to send money to people using services like Square and PayPal. The problem is these companies hit you with a credit card transaction fee. At 2.7-2.75% of the total amount, it’s like paying 2.7 cents per mile — way too much to be worth it even if no one minded.
Amazon has recently expanded their money transfer service to include Amazon Local Register. Like Square, you get a little dongle to plug into a mobile device and swipe credit cards. For a limited time (by October 31, 2014) you can sign up and get a transaction fee of only 1.75%. This promotional rate will be good through December 31, 2015, when it will increase to 2.5%. The device itself costs $10 + tax, but Amazon is rebating the first $10 in transaction fees. (I first read about this in The Wall Street Journal.)
I see the potential here to “buy” miles for 1.75 cents each. That’s less than US Airways has been selling their miles lately. You won’t have to wait for miles to go on sale, and you won’t have to worry about purchase caps. Assuming you see 1.75 cents as a reasonable price, you can earn as many as you want. You can also choose a more valuable currency or shop around for annual spend bonuses depending on the credit cards available to you. United likes to put its miles on sale, but they still cost over 3 cents. I’d be far more interested at 1.75 cents given their more generous routing rules than US Airways, and if you earn 1.5 miles per dollar with a MileagePlus Club card, then the cost drops to 1.17 cents per United mile.
Assuming Amazon, your bank, or the IRS doesn’t shut you down for paying yourself millions of dollars for phony purchases.
I haven’t thoroughly investigated the potential of this opportunity for manufactured spend, but at least the economics make sense and Amazon has a history of letting stuff slide. Yes, there are lots of MS tricks to pay even less for miles. But are they all as easy as this one? I’m not so sure. Sometimes convenience is worth paying a higher price. I’ll leave that decision up to you.
