Best Point Earning

An Unintended Method of Manufactured Spending

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Since manufactured spending is a mean of generating miles and points by spending in a way you would not otherwise, what is an “unintended” method of manufactured spending?

Unintended Method of Manufacturing Spend

Given how different businesses operate, there are ways that we increase our generation of miles and points simply because a retailer may refund your credit card purchase by a check. Earlier this year, I had to return something to a retailer and it was a retailer that has a very generous policy. When they received my return, they did not refund the money spent to my credit card. Instead, they issued me a check for the amount. This was a welcome surprise as I had earned quite a few points from the purchase (portal bonus) and the purchase had helped me to meet the required minimum spending for the initial bonus. That is one kind of unintended method of manufacturing spend!

There is another one that I have had the (unfortunate) experience of being the benefactor of recently. This is definitely not something scaleable and not something that should be abused in the least as you may end up having problems with it, though it is was an interesting little way of gaining some additional points!

eBay and PayPal Disputes

I used to sell quite a few things on eBay – mostly things that I buy to review for myself/others or to use for a short time. Because I get a lot of deals, I am actually able to purchase some pretty great things that I can use for several months and then sell and come out even (after fees). Given the fact that I do sell some electronics with higher prices, there is always the potential for people that have an issue because of the changing states of electronics or not understanding what they are actually buying. I am always crystal clear with the products to describe what it is and what, if anything, is wrong with it, yet I still get some people trying to wiggle out.

When the manufacturer drops prices

A recent instance was a camcorder that I purchased to use while we were in the US. I got a great deal on it and was able to try it out and explore some of the professional aspects of the camcorder before I sold it – for what I paid. Fast forward only one month and the manufacturer decided to drop the price by 50%! That meant that this buyer actually had bought a used camcorder for several hundreds of dollars more than it was being sold for new now. Of course, I received an e-mail from him inquiring about “some issues” that had developed with the camcorder and wondering what I thought he should do with it. I reminded him that there were no issues with it and provided him with the photos of the sensor again so he knew I had those pictures in case he tried to file a dispute. That was the last I heard of him. Fortunately, no dispute filed.

Trying to defraud

Unfortunately, not every sale ends that way. I had one buyer that decided to file a dispute that he had never received the (expensive) cellphone he bought from me. I had sold it just before leaving the US and had misplaced the receipt with the tracking number. Since there was no tracking number associated with the auction, this buyer thought he could get away with fraud and filed a dispute that it was not received. Fortunately, my family found the receipt and I checked to find that it had been delivered to him and the dispute was dropped.

Not understanding the limitations

Yet another item I sold was purchased by someone who thought he could use it for something it could not be used for (and I was clear with it). Because he had done this in times past, he thought he could do it again. It did not work and he filed a dispute – that the item was damaged, missing parts, and for expensive shipping (which was strange since I always pay for shipping!). After conversations with both PayPal and eBay, the dispute was settled in my favor and the negative feedback removed (I like to keep my feedback at 100%).

Where is the manufactured spend?

What happens when a buyer files a dispute with PayPal or eBay for an item is that PayPal freezes the amount from the auction in your account. If you have already transferred the money to your bank account, they then debit the primary source of funding. In my case, it is a credit card. That means, in the above examples, PayPal charged the full amount to my credit card for the item.

The nice part is that when the disputes are settled in my favor, they refund the money directly to my PayPal account! So, now I have the money charged to my credit card but refunded to a source I can transfer to my bank account. This allows me to earn points on the credit card and not have to do anything to do it!

Obviously, this is not something that should be done for the purpose of manufactured spend! I would imagine that bogus disputes that are filed against you would tell PayPal that you are a risk, even if you win each dispute. But, something you should do, if you sell on eBay, is to prepare for this in case you ever have a dispute filed against you. Chances are, if you do any amount of selling on eBay, there may come a time that someone will file a dispute – especially with high-priced items and electronics (for some of the reasons I demonstrated above). If that happens, and you win the dispute, you could have generated a lot of points!

First, transfer any money out of PayPal when you get paid. This will allow your PayPal account to stay at a zero balance and require PayPal to put a freeze on your main funding source. Second, make sure that your main funding source is not your bank account, but the credit card that you would like the spending on. This way, when a dispute is filed, it will debit that credit card.

Of course, the preference would be that you never have to have a dispute. I have great feedback on eBay because I try to treat every buyer the way I like to be treated (free priority shipping, same-day shipping, very descriptive of any known issues, calling buyers on the phone for very high dollar items, etc).  I would never jeopardize that to get some points through this unintended manufactured spending method, but, should a dispute happen, its nice to know that a side benefit is that I can get points!

What kind of unintended method of manufactured spending has happened with you?

Editorial Note - Opinions expressed here are author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

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About the author

Charlie

Charlie has been an avid traveler and runner for many years. He has run in marathons around the world for less than it would cost to travel to the next town - all as a result of collecting and using miles and points. Over the years, he has flown hundreds of thousands of miles and collected millions of miles and points.
Now he uses this experience and knowledge to help others through Running with Miles.

5 Comments

  • I am remodeling my home and purchased many cases of tile from my local home improvement store. This was a special order, requiring that I go into the store to place the order in person and receive contractor pricing; no opportunity to go through a shopping portal. This was a very large order and required a delivery truck (2 big pallets). When I opened the plastic wrap around the delivered tiles I noticed as some of the tiles were not as ordered, i.e. from the wrong dye lot . I contacted the local store. After checking they determined I was correct, and I was told to re-order online. I did so–this time, going through an airline portal…and acquired 23,000+ miles. In the meantime, the store arranged for free pickup of the erroneous tiles, free delivery of the correct tiles, and refund of the special order invoice–meantime I keep the 23K miles and get contractor pricing for the correct tiles.

  • I have been nervous about selling high priced items on eBay in the past four exactly this reason. Do you have any specific process you go through when you call buyers to verify over the phone?

    • I will typically message them after they have won the auction and then ask if it would be okay if we spoke on the phone as I want them to feel comfortable with the transaction. They normally are impressed that I want to talk with them and it does tend to humanize the transaction a bit. On a recent auction, this saved me because there was a (very) minor issue with the item that I had honestly not know about. The item was covered under the warranty, but the store was a long drive away. Because we had spoken, he came to me right away about it and we worked out something that made him feel good and kept the deal alive. Had we not spoken, it could have turned ugly.

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