1. Buying Apple gift cards with Membership Rewards has a targeted, boosted redemption rate of 94.12 points per dollar, which works out to a cash-out rate of ~1.062 cents per point.

    With Apple gift card resale rates hovering at nearly 92%, this gives you a Membership Rewards to cash conduit at 0.977 cents per point, which is useful if you’ve hit capacity on Schwab and business checking cashouts and don’t yet have the Morgan Stanley card. (Thanks to DoC)
  2. Kroger online has 5% off of fixed value “Visas or Mastercards” with promo code OCT2024. Of course Kroger.com hasn’t sold Mastercards since May, but even they don’t seem to have noticed. These will earn fuel points which makes the play potentially lucrative, but won’t code as grocery.

    These are Pathward gift cards.
  3. After registering here and then logging into the IHG Rewards mobile app, you’ll earn 500 bonus points, assuming you didn’t do the last iteration of this promotion.

    Yes, this is only worth about $2.50, but the hourly rate is still (maybe) over the line if you’ve already got the app downloaded. (Thanks to FM)
  4. The Capital One Spark Cash business credit card has a $750 sign-up bonus after $7,500 spend in three months and the $95 annual fee is waived for the first year. The card closed to new applications in 2021, but quietly reappeared recently.

    If you’ve got a miles earning Capital One card like the Venture X personal or business card, you can convert cash-back rewards to miles at a 1 penny to 1 mile ratio, and because this is a credit card and the Venture X is a charge card, you can hold both at the same time.

Happy Tuesday!

The alternate-alternate Apple cashout method.

  1. The Cardless Qatar Airways cards added a benefit for a rebate on the taxes and fees paid on a Qatar Airways award flight booking on Qatar metal, up to $300 in economy or $600 otherwise, per ticket. The benefit activates after $15,000 annual spend in the first year and $25,000 in following years.
  2. Meijer stores have 50,000 bonus points with the purchase of a $500 third party gift card through Saturday October 26, limit one per MPerks account, excluding Amazon.

    While Pepper has killed the market for third party gift cards bought at a 10% discount in some brands, others like BestBuy and Lululemon are largely unaffected given the purchase limits on the former with Pepper and the lack of those cards altogether on the latter.
  3. Publix stores have $10 off of $100 or more in Visa or Mastercard gift cards through Saturday, October 26 with digital coupon.

    These are Pathward gift cards. (Thanks to GCG)
  4. The Chase Sapphire Reserve, United Club card, and Ritz cards no longer offer primary rental car insurance to New York residents, where it now reverts to secondary insurance. They also exclude Israel, Jamaica, the Republic of Ireland, and Northern Island in the benefits guide.

    The US Bank Altitude Reserve doesn’t have this restriction and therefore wins New York, but does also restrict coverage in Israel, Jamaica, the Republic of Ireland, and Northern Ireland. The Venture X is similar, but doesn’t win New York because it’s Capital One.

The other semi-official way to win New York: Snap a picture of at least four different varieties of the same, slightly off, character.

  1. Staples has fee free $200 Visa gift cards starting Sunday and running for two weeks, limit nine per transaction. The two week promotional window is odd, normally when promotions are extended it’s because either (1) people pick up other profitable things when in store for the promotion, or (2) there’s not enough volume to exhaust the promotional budget in one week, so they extend. Neither feels like the right explanation though.

    These are Pathward gift cards.
  2. Giftcards.com has returned to major airline shopping portals. As of this writing, they’re all at 1x and cashbackmonitor.com hasn’t refreshed, but I expect both of these to change soon. Stack with Citi Merchant Offers for 4% back on spend on up to $750.
  3. Bilt Rewards has two new transfer partners, which solves the, err, mystery of why some travel bloggers were at a Bilt offsite earlier this week. I wonder who paid for the offsite? Anyhoodles:

    – Accor Hotels at a 3:2 ratio
    – TAP Air Portugal at a 1:1 ratio

    Accor Hotels partners with Citi and Capital One but with a worse 2:1 transfer ratio. Accor Hotel points are worth about 2.2 cents per point with fixed redemption values and are often a great deal in the European equivalents of Lubbock, TX. TAP Air Portugal is a Capital One transfer partner with the same ratio as Bilt.
  4. Giant, Giant Food Stores, Martin’s, Stop & Shop have 2x points on Visa gift cards through Thursday, limit $1,500 or $2,000 per account depending on store. (Thanks to his eminence, Stephen at GCG)
  5. American Express Membership Rewards has a 20% transfer bonus to AirFrance/KLM FlyingBlue through November 10. Sweet spots:

    – Promo awards, which are mostly economy
    – Business class to and from Europe
    – European short-haul
    – Delta domestic short-haul

    The sweet spots don’t mean transfer speculatively though, you can often find bonuses of up to 30% in multiple bank flexible currencies.

Europe’s versions of Lubbock, like Lübeck Germany, look slightly nicer than the American equivalent.

  1. The Citi AA Business card has a heightened sign-up bonus of 75,000 AAdvantage miles after $5,000 spend in three months. The $95 annual fee is waived for the first year too.

    You can pair this with the Citi AA Personal card’s 75,000 AAdvantage miles after $3,500 spend in four months which also has the annual fee waived for the first year, just space out the applications by eight days or one will be automatically denied.
  2. Hyatt and AA’s partnership is changing next year. The highlights:

    – No more reciprocal earning on paid flights or stays
    – Exchange AA miles for Hyatt certificates after several Loyalty Points thresholds
    – Choose Hyatt certificates as a Loyalty Point Reward at some thresholds (this is a bad value)
    – Exchange Hyatt Milestone Rewards for AA seat coupons or status
    – Hyatt elites can redeem points for “status for a day” with AA (this is also a bad value)

    We don’t know what the conversion rates look like yet for exchanging miles, but we do know what the redemptions for threshold rewards and status for a day look like, and they’re terrible. Don’t let the hype machine get you excited over this. UPDATE: Gary at VFTW let me know that we do know that redemptions for Category 1-4 certificates will start at 25,000 AA miles, and redemptions for Category 1-7 certificates will start at 65,000 AA miles.
  3. SAS Eurobonus has a tiered promotion for bonus award miles for travel on SkyTeam airlines through December 31 (registration required), provided the flights are paid for in cash and earn miles with SAS Eurobonus, or are Eurobonus redemptions. The tiers are based on your of SkyTeam operating carrier count:

    – 5 carriers: 10,000 bonus miles
    – 10 carriers: 100,000 bonus miles
    – 15 carriers: 1,000,000 bonus miles

    There are 21 (or 20 minus Aeroflot) SkyTeam carriers. I believe it’s possible to do this at an approximate cost of $75 per ticket if you’re very flexible and able to sandwich it in-between other flights you’ve already got on the books, putting the lower minimum cost at approximately $1,125. If you’re less flexible or don’t have additional travel that you can piggyback on, you’re probably looking at $5,000 in tickets to pull this off. The SAS Eurobonus chart is quite good on SAS metal to Europe at 50,000 miles in business, and it’s reasonable-ish for partner awards. One million miles would be worth 20 business class one-way flights on SAS metal, so there’s utility for gamers.
  4. Breeze Airways has 45% off of base fares with promo code FLYLOCAL for round-trip flights booked by tomorrow night with travel between October 22 and February 4, 2025.
  5. Alanis Morissette called and told me that one of the most valuable airline currencies, AirCanada Aeroplan, teamed up with one of the least valuable hotel currencies, Marriott Bonvoy. Under the partnership, you can match status between two programs:

    – Marriott Titanium or Ambassador elites can register for Aeroplan 25k status
    – Aeroplan 50k or higher elites can register for Marriott Gold status

    Status lasts through the end of the 2025 elite year. (Thanks to BuyerCompetitive6425)
  6. Amazon has refreshed links for a checkout discount when using a single reward point:

    – 30%-50% off with a US Bank card, up to $30-$50
    – 30%-50% off with an American Express card, up to $30-$50
    – 30% off with Discover, up to $30

    These work with most third party gift cards.

Happy Thursday!

Inspiration for the Marriott Bonvoy and AirCanada Aeroplan partnership.

One of the hardest transitions between casual churning and becoming a heavy hitter is the switch from earning miles and points to earning cash back.

The transition should happen when you’ve earned all the miles and points you can spend cover your travel for the next 12-18 months, because:

  • Miles and points devalue by 30-50% in the span of years
  • The programs with the best redemptions change over time
  • Points don’t earn interest
  • The value of an unredeemed point is zero
  • Most of us don’t travel as much as we think we will (even if we travel a lot)

When you earn more points and miles than you can burn in a short time, the risk that excess points eventually become worth much less than when you earned them grows bigger than James’ Giant Peach from the famous historical documentary that I think is called “A kid finds a big fruit and someone wrote about it”.

Why do we fail to transition to cash back, even when we know analytically that it’s not the best option? The common answers I hear and that I’ve thought are:

  • Points and miles are fun, pennies aren’t
  • I’m motivated by travel, my job covers my cash needs
  • What if me and six of my closest friends need to fly Lufthansa F on last minute notice to Frankfurt and I don’t already have the miles banked, and my 800,000 Membership Rewards won’t post for another week?

They’re all valid reasons, but seeing them written can help prevent you from falling into the same trap. Trust me, you don’t want to be down 100,000 Hawaiian miles that expired a few years ago because you didn’t ever have an actual use for them and weren’t active in the program; $1,000 would have been a lot better. #askmehowiknow

Happy Wednesday!

Nerds gonna nerd.

Forward: Does it ever feel like we as a collective have the memory of guppies? We talked about an American Express Personal Gold 2025 4x dining cap of $50,000 in July and it’s not news anymore, right? Or is this crazy town? Please don’t answer, I probably won’t like what I hear.

  1. Do this now: Put a charge or two on each of your Bank of America credit cards in anticipation of avoiding fraud alerts on November 7, when you’ll get +2x on all spend up to $2,500 on every card account. (Thanks to TeddyH)
  2. American Express Offers has new travel related, partially gameable offers:

    – 20,000 Membership Rewards or $200 statement credit after $1,200 spend on Virgin Atlantic through November 30
    – 20,000 Membership Rewards or $200 statement credit after $1,000 spend on AirFrance or KLM through December 31

    It’s too bad the Virgin Red Synchrony Mastercard isn’t somehow also involved but that’s probably because it hadn’t been invented yet when AmEx cooked up the offer, at least according to what I just made up. (Thanks to FM)

  3. Frontier Airlines has 10,000 bonus miles for booking a roundtrip flight by tonight and completing travel before the end of 2025.

    As we all know, what’s even worse than a Frontier flight? More Frontier flights, that is unless you want to fly Des Moines, Iowa direct to Guadalajara Mexico; Frontier is the only airline that has that flight in the bag.

Happy Tuesday!

Guppy food.

  1. The Chase Sapphire Preferred has both a 70,000 Ultimate Rewards and $300 travel credit as a sign-up bonus via referral links, though not all referral links see the increased sign-up bonus. The offer is also available in-branch.

    I prefer Ink cards to the Sapphire Preferred for lots of reasons, but this bonus is worth your attention if you can refer another player. If not, the periodic 100,000 Ultimate Rewards bonus version is a higher value.
  2. The Citi AA Platinum Select card has a sign-up bonus of 75,000 AAdvantage miles after $3,500 spend in four months, and the annual fee is waived the first year. (Thanks to DDG)
  3. United MileagePlus has a tiered transfer bonus of up to 30% for incoming Marriott Bonvoy points through the end of October, and registration is required. Points transfer at a 3:1 ratio and if you transfer in 60,000 point increments you get a bonus 10,000 miles too, so each increment earns:

    (60,000 * 130% * 1/3) + 10,000 = 36,000 miles

    Marriott has a similar deal with AirCanada Aeroplan with a smaller bonus that works out to 28,000 miles, which frankly is worth about the same as 36,000 MileagePlus miles. Frankly I’m impressed at some marketing person’s mileage valuation prowess.
  4. Staples has a fee free $200 Mastercard gift cards through Saturday, limit eight per transaction.

    These are Pathward gift cards.
  5. Chase has the following transfer bonuses through October:

    – 30% to British Airways, Iberia, or Aer Lingus Avios
    – 50% to Marriott Bonvoy (this was 70% over the summer)

    A 30% transfer bonus to the above Avios programs is effectively a 30% transfer bonus Qatar Avios and FinnAir Avios too.
  6. Safeway, Albertsons, Vons, and other Just4U stores have a promotion for 10x points on Zillions and Choose Your Card gift cards through Saturday, and if you wait to buy until Saturday you’ll probably earn 12x instead of 10x with the weekend 4x coupon.

    How does 10x+4x=12x? That’s one of the least weird things about the Just4U program, just roll with it.
  7. Kroger has a coupon for a fee-free variable load Visa or Mastercard gift card of $150 or more through October 15. I won’t go out of my way for one fee-free gift card, but there’s a great chance that it’ll happen organically.

    These are now Pathward gift cards, so long US Bank.
  8. Southwest has a 25% off base fares sale for flights booked today and travel between October 29 and February 10, 2025.

Just4U points as a grocery store mascot.

Introduction

The Pepper gift card platform, seemingly created as a conduit for moving money between venture capital bank accounts and gamers’ wallets, warrants discussion based on recent developments and crowd think.

Background

Moochoo, the company, the company behind Pepper, raised $23.05 million on December 21, 2023. Is it auspicious that they closed on a pagan holiday? Probably not, but it’s funny. Pepper’s go-to-market strategy started shortly thereafter with effectively unlimited 10% back (in Pepper coin currency) on new accounts for the first 15 days of the account’s existence, along with bonuses for the referrer. They appeared to want new users at all costs and turned a blind eye to gaming with zero due diligence on new accounts. (Have a new device? That’s a new person, obviously. It’s not possible to have more than one, duh. Just make those charts go up and to the right!)

Seven months later in July, Pepper pivoted its rewards scheme away from unlimited new account cash-back, almost certainly because at its then current burn rate, it wouldn’t survive long in the face of unlimited purchases of Walmart, Home Depot, Amazon, and other high value gift cards at ~90% of face value. Pepper replaced the new-user sign-up bonus with double base points on gift cards for the first 15 days, which wasn’t useful for bulk resale and caused volume to plummet. How do I know volume plummeted? Pepper order IDs are sequential, naturally.

The Now

Pepper took a few weeks, but they’ve settled into the new normal. Now, they release “Daily Boost” merchants once, twice, or three times a day. Boosted merchants earn much more than regular, like 12x on Amazon or 20x on Columbia Sportswear. Boosted merchants have a total capacity before the boost goes away, which sometimes happens in 30 minutes for popular brands and sometimes doesn’t happen at all.

The Warning Lights

There are a few recent developments that could be taken as warning lights:

  • Boosted merchant rewards payouts are now delayed by several weeks (is this related to cash-flow concerns?)
  • New accounts now require ID scans, but only as of a few weeks ago (why now, maybe because they’re trying to raise money and VCs want real user verification?)
  • Boosted merchant deals are getting better brands and higher payouts daily (why offer bigger than 10% discounts on high-volume bulk resale gift cards like Amazon, Walmart, and HomeDepot, which were probably burning Pepper’s cash reserves down like a dry Christmas tree on fire? Maybe to build temporary operating revenue?)
  • The capacity for boosted merchant deals seems to be increasing steadily (again, is this for cashflow reasons?)
  • Boosted merchant deals seem to be shifting to the brands that sell-out quickly from the brands that don’t (why push for more volume on cards you’re probably taking a loss on?)

To answer these questions, I think it’s time to build a simple quant-model for Pepper’s cash reserves.

The Pepper Doomsday Countdown

Let’s come up with a model for how much cash Pepper probably has left. The formula is really just $23.05 million, minus burned cash, plus earned profits. Let’s make some data-driven assumptions:

  • Monthly operating expenses, salaries, and benefits for 37 employees, assuming an average overall employee expense of $65,000 per year (this is likely a rather low estimate): 37 * $65,000 / 12 = $200,416 / month
  • Number of transactions through September 30, 2024 (order ID’s are sequential): 857,000
  • Average transaction size (bulk brands are usually between $750 and $1,500 in max size): $1,000
  • Monthly profit from regular discount gift card purchases for non-boosted accounts and users, assuming 3% profit: 3% * $500,000 = $15,000 / month
  • Per order losses on boosted transactions, assuming 3% loss: $1,000 * 3% = $30
  • Percentage of transactions that are boosted, in a new user sign-up bonus, or otherwise money losing: 80%

Now, let’s run the America-Loves-Math-o-tron-5000:

2024 losses = $200,416 / month * 9 months + $30 / order * 857,000 orders * 80% – $3,000 / month * 9 months = $22,236,744

So, ~$23 million raised and ~$22 million in expenses by my simplistic toy model. You can play with the numbers and come up with your own conclusion, but you have to get pretty far below a 3% per transaction loss to make things look rosey for Pepper, or really far above $500,000 per month in profitable transactions.

Where does that leave me? I think Pepper is about 10% likely to die in the next 30 days, and maybe 50% likely to die by the end of 2024; unless of course they find another VC that wants to shoot money into a toilet. I’m still playing the Pepper game but only at a small level. If they fold and I lose my floated Pepper rewards, I’ll live without much regret.

Happy weekend I guess?

The result of the last round of Pepper’s VC money cannon.