A common adage in manufactured spend is “Don’t float more than you’re willing to lose“. Astute readers will note that there are a lot of asterisks here, like maybe the Kelly method is a slightly better model, or perhaps that floating $100,000 at Wells Fargo isn’t the same as floating $100,000 at CraptoCrypto LLC. But, the wisdom is generally accepted as sound and is, in fact, sound at a first-order approximation. The players in the space generally understand this adage and abide by it.
There’s a problem though: generally churners and manufactured spenders don’t think of points sitting in a loyalty account in the same vein as cash sitting in a FinTech, even though it’s a perfect analog. Yesterday showed examples of why it’s true for points too, specifically:
- American Express shut down at least a handful of serial gamers yesterday, and points were forfeited almost immediately
- Citi routinely shuts down gamers a few weeks or months after KYC calls, but often gamers assume that it won’t affect them (Narrator: It will.) I know of two such KYC shutdowns just yesterday. When the shutdowns occur, ThankYou points are zeroed by the end of the day
How do we safeguard against losing points from a shutdown? Well, don’t float more than you’re willing to lose. American Express could come knocking tomorrow, and if they do, every single Membership Reward point will be lost unless you’re really, really quick.
Good luck, and have a nice weekend!
Next up: Self shutdown for fun and profit.