{"id":9688,"date":"2024-05-31T04:00:00","date_gmt":"2024-05-31T10:00:00","guid":{"rendered":"https:\/\/milesearnandburn.com\/?p=9688"},"modified":"2024-05-30T18:10:32","modified_gmt":"2024-05-31T00:10:32","slug":"weekend-wisdom-assessing-risk-by-understanding-whos-paying","status":"publish","type":"post","link":"https:\/\/milesearnandburn.com\/index.php\/2024\/05\/31\/weekend-wisdom-assessing-risk-by-understanding-whos-paying\/","title":{"rendered":"Weekend Wisdom: Assessing Risk by Understanding Who&#8217;s Paying"},"content":{"rendered":"\n<p>One of the common questions I got routinely when <a href=\"https:\/\/milesearnandburn.com\/index.php\/2024\/02\/23\/sliding-into-the-weekend-2\/\" class=\"ek-link\">American Express had a referral bonus for 10x on up to $25,000 in dining spend was<\/a>: How risky is maxing out 10x multiple times? My answer was typically something like &#8220;I don&#8217;t have any special insight into American Express&#8217;s RAT and fraud teams, but my guess is the risk is relatively very low&#8221;. What gave me the confidence to say that? Two things:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Unchecked bravado and unsubstantiated sense of self worth<\/li>\n\n\n\n<li>Knowing who was paying<\/li>\n<\/ul>\n\n\n\n<p>Without trying to go into boring accounting stuff at big companies (or exciting accounting stuff if you&#8217;re the approximately 20% of churners who made a career in accounting): not all expenses are created equal. Roughly speaking, you can classify most expenses in two-ways:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Variable costs (electricity bills, Membership Rewards payouts, STK Dining expenses)<\/li>\n\n\n\n<li>Fixed cost (lease, advertising campaign, salaries, etc)<\/li>\n<\/ul>\n\n\n\n<p>American Express&#8217;s RAT and fraud teams are trying to combat variable cost spikes caused by card-member usage patterns, and causing those spikes is usually what gets you in trouble. On the other hand, promotions like 10x on dining for up to $25,000 in spend is a marketing promotion with a (presumably) fixed \/ maximum budget attached to the marketing department. RAT and fraud teams, for better or worse, just aren&#8217;t looking at what happens to marketing&#8217;s fixed cost budget. Ergo, low risk.<\/p>\n\n\n\n<p>We&#8217;re always playing a game with imperfect knowledge about the other side&#8217;s motivations and desires, but thinking about who&#8217;s paying for a particular play is a good proxy for risk in a game filled with imperfect knowledge.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"960\" height=\"960\" src=\"https:\/\/milesearnandburn.com\/wp-content\/uploads\/2024\/05\/ego.png\" alt=\"\" class=\"wp-image-9689\" style=\"width:420px\" srcset=\"https:\/\/milesearnandburn.com\/wp-content\/uploads\/2024\/05\/ego.png 960w, https:\/\/milesearnandburn.com\/wp-content\/uploads\/2024\/05\/ego-300x300.png 300w, https:\/\/milesearnandburn.com\/wp-content\/uploads\/2024\/05\/ego-150x150.png 150w, https:\/\/milesearnandburn.com\/wp-content\/uploads\/2024\/05\/ego-768x768.png 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"has-text-align-center\" style=\"font-size:14px\">The official MEAB coffee mug.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of the common questions I got routinely when American Express had a referral bonus for 10x on up to $25,000 in dining spend was:<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[56],"tags":[],"class_list":["post-9688","post","type-post","status-publish","format-standard","hentry","category-wisdom"],"_links":{"self":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts\/9688","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/comments?post=9688"}],"version-history":[{"count":3,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts\/9688\/revisions"}],"predecessor-version":[{"id":9746,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/posts\/9688\/revisions\/9746"}],"wp:attachment":[{"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/media?parent=9688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/categories?post=9688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/milesearnandburn.com\/index.php\/wp-json\/wp\/v2\/tags?post=9688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}