Introduction

We’ve followed the saga of the quick fall from grace in the Kroger fuel points markets approximately monthly since this summer, and we seem to have reached a steady state for operations:

Kroger is getting very good at shutting down reseller’s fuel accounts quickly.

Practically speaking this means that big end-users (fuel points buyers) are exiting the market and gift card and fuel points buyers are pulling back.

Theories

First, here’s the data that we’ve seen that’ll help draw conclusions:

  • Account locks happen rapidly when loading unrelated fuel points accounts back-to-back
  • Account locks happen in the middle of redemption
  • There was temporary glitch that allowed for massive overdrawing of fuel points accounts that lasted several weeks, and a few end-users took accounts extremely negative
  • We’ve seen multiple reports of continued overdrawn accounts since the glitch, but in small balances unlike what had happened in the past

With that in mind, what caused Kroger’s systems to go from effectively zero policing to massive shutdowns? Only the folks at Kroger HQ in Cincinnati know for sure, but there are a few possibilities:

  • Significant money was taken from Kroger’s balance sheet during the redemption glitch, so putting an end to reselling became a significant business decision and staff was allocated specifically to monitor and lock accounts
  • Kroger may have implemented facial recognition technology as an anti-reseller technique
  • Kroger may be successfully fingerprinting reseller’s electronics devices and shutting down accounts associated with those devices

Reactions

We’ve seen varying reactions from the community to the increased account shutdown activity:

  • Gift card and fuel point resale rates have rocketed above 100%
  • Many end-users can’t logistically work under the current constraints and have exited
  • Some fuel points brokers have instituted same day redemption policies and have indemnified buyers from loss within a certain timeframe
  • Many gift card and fuel points resellers have stopped buying all together

The Future

My crystal ball isn’t any better than average, but I think that as the fuel points resale market dwindles in efficacy, rates for bulk third party gift cards which are normally partially subsidized with fuel points will climb, buyers will continue to pull-back, and potentially new workarounds will emerge; frankly that was an easy prediction though because all of those things have already started to happen.

Special thanks to Eugene, DCB, and several other anonymous brokers for providing background information and consulting for this article. Good luck out there!

The glitch made gas so cheap that end-users could afford to use it to water their cement.

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