One of the most surprising aspects of manufactured spend is the sheer number of people that send six-plus figures worth of goods, gift cards, precious metals, or other consideration to someone on the internet that they know only by a handle, and if they’re lucky, a first name. This works for two reasons:
- Broker reputation
- Effective communications in the community about reputation
In other words, you may only know a guy as “Michael“, but if a hundred other contacts that you trust have successfully done big business with Michael, then doing business with that guy is probably slightly less risky than a random Michael you met in downtown Portland.
Of course past performance doesn’t guarantee future gains and Michael may choose your shipment as his ticket to a new life in Argentina, a risk we’ll call counterparty risk. That’s not the only kind of risk though, in manufactured spend, we’re subject to:
- counterparty risk
- shutdown risk
- credit risk
- tax and audit risk
- fraud risk
- cybersecurity risk
- clawback risk
- operational risk
- concentration risk
- automation risk
- MCC coding risk
… amongst other risks. A quick treatise on each will make you a better and safer manufactured spender, and we’ll have a semi-irregular post here about each in the upcoming (I have no idea how many) months. Stay tuned friends.
Oh, and so you don’t walk away feeling like you didn’t get anything out of today’s post:
- US Bank brought back Air France / KLM FlyingBlue as a transfer partner, but not yet Qantas (lol)
- Bilt Cash can be redeemed for Blade helicopter rides (cool story bro)
Happy Tuesday!
Pictured: Michael