The end (of 5X everywhere) is nigh

The Mayan calendar ends on December 21 2012.  Many believe that the end of the Mayan calendar signifies the end of the world as we know it.  Is it possible, though, that the real meaning is the end of “5X everywhere”? 

OK, settle down, I made the title of this post purposely provocative in order to get your attention.  I don’t really think that “5X everywhere” is coming to an end, but rumors are spreading and it would be irresponsible of me not to warn you of the possibility…

Background

“5X everywhere” is a technique for earning 5 points per dollar for all spend (see   “One card to rule them all“).  This technique relied on, among other things, being able to buy Vanilla Reload cards at Office Depot.  Some believed that “5X everywhere” was dead when Office Depot stopped carrying Vanilla Reload cards (see “Office Depot discontinues Vanilla Reload cards“).  Many of us, though, continue to earn 5X everywhere the easy way (see “Almost too good to be true“) or the hard way (see “The reload game is on“).  Recent rumors, though, make me wonder if even these techniques are near an end…

The rumor

A couple of readers have recently and independently reported the same story:  when they went to Office Depot to buy gift cards with their Chase business card, the cashier told them that Chase has stopped awarding 5X for gift card purchases.

Is this true?  I know that on my most recent statement I still saw 5X for gift card purchases.  Is it even possible for Chase to distinguish regular purchases from gift card purchases?  I don’t know.  What if you buy gift cards and a pack of gum at once?  Will Chase somehow see the details of the transaction and be able to award 5X for the gum, but not for the rest?  It seems unlikely to me.

Why spread a rumor?

You might wonder why I would bother reporting this with so little information either way.  Normally, I wouldn’t.  But this feels similar to something that happened before where rumors eventually evolved into fact…

Vanilla Stories

I first wrote about Vanilla Reload cards in May 2012 in the post “One card to rule them all.”  A few days later, I received an email from a reader who was told by an Office Depot manager that Office Depot would no longer carry Vanilla Reload cards.  Naturally, I was worried about this, but soon found that it wasn’t true.  At least, it wasn’t true nationwide.  Office Depot kept selling them. 

A week later, I received a very similar email.  The gist was the same: Office Depot would stop selling Vanilla Reload cards.  And then, a week or two later, I received another email just like it.  About once a week I heard the same story.  But Office Depot kept selling the cards.  In fact, in some cases, the same store that reported the end of Vanilla would restock and continue selling them!

In November, things changed.  The rate at which I received these reports spiked up suddenly.  It was time to take the reports seriously.  So I called a number of Office Depot stores and heard the same story.  The end had come for real.

From rumor to fact

So, the Vanilla rumor evolved from fiction to fact in a period of 6 months.  What about this new one?  Will it pan out?  Or, is there just a single misinformed cashier spreading this misinformation?

Reader input

Have you recently bought gift cards at Office Depot with your Chase business card?  Did you hear anything like this from the cashier?  Did you receive the full 5X points on your statement?  Unfortunately, its not easy to check.  See “Chase Ink: Check your X” for details.

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About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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Comments

  1. I woud not bet against Chase.
    They are the only bank to keep a closer eye on the customers than anyone else.
    I would rather have a review from Amex.

  2. Just checked my statement with close date of 12/04/12, I got 5X points for office purchases. My last purchase was 11/30/12 and that purchase amount was more than half of the total I spent at office stores this statement.

  3. I’m also in the “skeptical” camp that OD cashiers would know about the bonus points awarded on an Chase Ink story. Not a core competency, if you know what I mean.

    Until folks start reporting that they didn’t receive 5x points on their statements for these purchases, I’ll assume this rumor is false.

    FWIW, I just got my Ink statement a few days ago and received 5x points for my last VR purchases at OD.

  4. Are the reports just from OD or other office stores? I need to finish the minimal spend on my Ink Plus. I’m thinking I just might buy a bunch of gas and Amazon giftcards from Staples.

  5. Credit card issuers can’t see what you’re buying, the only way they can tell what you’re up to is if they see, for example, a whole bunch of purchases of $504.95. If Chase does try to crack down on this, it’s not hard to find the people who are being really obvious about it.

    Why don’t they see what you’re buying? It already takes a lot of work just to warehouse the transaction amount, merchant, and a few other relevant details. Adding all the items customers bought would take more money, plus it would eventually get the attention of privacy advocates, who would be asking (with good cause), “Why do banks need to know exactly what I’m buying at the grocery?” And I would think that retail chains probaby aren’t too interested in giving out that data anyway.

  6. I’m also very skeptical with this. My statement doesn’t close until the end of the month so I won’t be to report back for awhile, but would like to see some others report back.

  7. My first instinct is that Chase does not know what you are buying; however, what about purchases through the UR mall? Most, if not all, stores now say bonus points not eligible on gift card purchase. How does Chase know what is or is not an eligible purchase? There must be some information sharing. Also has anyone checked the T&C for the Ink Card lately?

  8. I had a statement close on Dec 9, with gift card purchases from both Office Depot and Staples. 5X on both. (It is really easy for me to check my X, as all I put on the Ink Bold is stuff that should qualify for 5X. So far, everything has posted correctly)

  9. It has the ring of truth to me. Cashiers generally know little to nothing about bonus points awarded by credit cards. If they are mentioning it now, it is likely because they’ve gotten some memo or internal communication about it.

  10. I think any change or restriction in Chase benefits is likely to be foreshadowed by a change in verbiage in the cardmember agreement, marketing materials, etc.

  11. Blah blah blah. Misinformation by OD employees at its finest.

    Unless OD is paying (or having Chase pay) to upgrade all of their processors to provide L3-level data, there is no way to distinguish between a gift card and a Lenovo.

    Besides, what about office max? Staples? Any other office supply store that sells gc’s?

  12. CC companies see either a total charge, or a pre-tip/tip/after-tip detail of charges. That is it. As others have said, the systems involved in doing more than this is not there. A bit of reading on how CC transactions work is all that is required.

    • Lee: Cash+ only offers 2X at drug stores (which becomes 3.125% when combined with Platinum checking & $25 bonus for each $100 redeemed). That’s still good, but not nearly as good as 5X Ultimate Rewards.

  13. I was at my local OD yesterday and bought $1k in 2 regular visa gift cards. They called the manager to authorize…becoming the same procedure as the beans. The manager who knows me by first name by now told me that they had been told to keep an eye on large amount purchases of gift cards.

  14. For all of you who say that the credit card company can’t see what you purchase is just simply incorrect. I work for a fairly large company and we’re all issued Purchasing Cards. These are nothing more than business credit cards issued from Citizens Bank. When my company receives the statement each month (which I often review as part of my job), not only does it list the merchant and purchase total (like it does for a regular credit card statement), but for many merchants (like Amazon for instance), it does list individual items purchased. So in some instances (but certainly not all), the merchant is reporting the item purchased back to the credit card company. Otherwise, there would be no way that this level of detail would be able to appear on the monthly card statement.

  15. My amex SPG statement is the most detailed. For gas (other than costco), it shows

    Quantity Description Price
    11 Unleaded Regular $3.69

    Went to macy’s to buy a winter overcoat, it shows

    MACY’S
    Description Price
    SUIT SEPARATES $122.50

    The wife bought a pair of shoes online, it shows

    NORDSTROM.COM 1-800-933-3
    Description
    JUNIOR SHOES

    OTOH CVS and walgreen show nothing .

  16. @Chimmy

    Purchasing cards are different from the Ink’s as they allow for Level-3 data. Read up on the subject before you come out of the gate blasting that others are wrong.

  17. @FM – That is my point though. The merchant reports some kind of information to determine what qualifies even if it is just a total of qualified purchase. What is to stop OD, Staples and OfficeMax from doing the same? Do they have a financial stake in the 5x program? If so, it would be in their interest to do so.

  18. Zz says:
    December 11, 2012 at 5:37 am

    @ace, why not more?

    I would buy $50k all at once, but nocal has a bottle neck for acquisition of gc to vr.
    In case it all ends today, I want to have a manageble supply of gift cards. My nut is very small, it would take me a year to dump $10k legit.

  19. I see no reason why Staples/ODP/Officemax couldn’t report to Chase a simple Yes/No in a field marked “Does this purchase include gift cards?” Chase doesn’t need item-level detail. They just need a simple yes/no. Staples certainly sees item level detail and can easily automate this to include an extra field in the info they send to Chase.

    Chase could simply tell Staples and ODP, “Include this field starting 12/31/12 or else we are excluding you from the list of 5x eligible stores.”

  20. I think it’s unlikely for Chase to stop giving 5x points for these purchases at all office supply stores because it requires too much work on their part. All my points have posted as of 11/30 statement – purchases done at Office Max & Staples. Who knows really…just enjoy earning your points and if it ends it ends. Making a couple other purchases along with your gift cards is always a good idea which I practice. Also, using more than one office supply store is wise too.

  21. Have you noticed on your OD receipts that they specifically break out the fees from the cards? This gives an easy data point to Chase or others. I don’t know but suspect this is the amount upon which OD pays the visa/mastercard fees on and not the card value. (either that or some other specially arrangement exists which wold also be a flag of some kind). Main point: unlike other purchases there are enough special aspects to GC that tracking them should be straightforward.
    .
    More realistically I suspect 2 things as most likely. The 1st is that OD management are freaking out at the spike in $500 card sales and are scared it leaves them open to wholesale fraud. (just like they did for VR). Always remember that OD as a business overall is struggling and is considered a buy-out candidate and management are scared of losing their jobs.
    .
    The 2nd is Chase knows that a lot of Ink card excess is going on and they are most likely to simply drop the bonus for office supply down to 2x and just keep phone, cable at 5x. Maybe add shipping or something truly business related as 5x.
    .
    Data point to support the 1st assumption is in the SF bay area some OD have stopped stocking $500 cards and others have become much tougher on checks when buying; such as calling in for each sale, or only allowing 1 $500 GC purchase per visit. At the store I use most often they don’t seem to be restocking $500 cards (except for AMEX which I avoid).
    I usually buy up to $2k at a time.

  22. Additional counter argument – Chase has launched a bunch of TV adds for the Ink card that specifically mentions 5x for office supply.

  23. My prediction is chase will revamp the ink cards and no longer to 5X, but those who have the current cards already, will be grandfathered in. In the meantime, ill keep churning my visa gift cards.

  24. Couldn’t these reports from “readers” be false in order to get less people buying gift cards? or at least stop new people from getting into the game?

  25. just went, i see a lot less Visa GC @ $4.95, but i see a ton of AMEX and the new Visa GCs @$5.95. perhaps they’ll raise the fees til the economics doesnt work anymore. i wouldnt discount inking money going away at some point. too good and too easy to be true. even without the yellow arrows and circled pictures!

  26. Great intel Pawtim. Near me, the ODs all share L3 but CVS does not. Tells me which way to err on mix of spend across cards and stores.

  27. A bit off-topic, but the difficulty of finding Vanilla Reload cards and this recent rumor are a testament to the impact of blogs like yours, Frequent Miler. For every commenter, maybe there’s 10, 20 or more readers who don’t comment but still act on your information. That’s powerful. You’ve got the bank on the defensive.

  28. Really Marcus? REALLY?

    A bit ironic you bringing that up when you link to your website which aggregates ALL the other blogs.

    “But the difficulty of finding Vanilla Reload cards and this recent rumor are a testament to the impact of blogs like yours”

    How is FM’s blog different than yours? Since you aggregate, you have 10 times the number of Vanilla posts that FM has.

    Really dude?

  29. My December 7th statement had the 5X applied for OD Gift Cards. Purchase was mid November. New set of purchases this month – so will have to see January statement for more details.

  30. I will share my story. My local OD in MA and CT have stopped selling $500 Visa, Master, or AE gift cards. Does anybody have similar experience? Manager told me they were asked to take the gift cards off the shelf.

  31. The key, methinks, is to diversify your spending on the Ink. Occassionally put a 1x or 2x purchase on it (or better yet, a purchase through the UR mall for Xx). Easy for me to do now, since I’m new to Ink and am trying to meet my minimum spend.

  32. This will end sometime–it’s too good to be true. That said, I highly doubt the information from OD is correct though. Someone who’s working as a cashier at OD has no clue what Chase is going to do. It’s Chase’s problem with respect to awarding 5x, not ODs.

  33. I have no legit business. Anybody in the same situation had trouble getting the Ink card?

    I do have from CHASE 2 FREEDOM cards, Hyatt, Fairmont, SOuthwest, Sapphire Preferred, and United Explorer

  34. My statement was generated today and I got 5X. As for rumors, here’s what will happen eventually: OD stops selling 500 GCs with CC in the interim. Then they update their systems in next 8-10 months at least if they can start coding GC txns in a different way to Chase. BTW, I feel it is both Chase and OD losing on this. OD would be paying commission to chase so that chase can award these points. So in short term, some ODs and some cashiers may choose not to sell 500 GCs or sell it only with cash. Other than that, don’t expect anything to change. Keep churning GCs and reloading (in moderation please)!

  35. OD is not losing money on the sale of a visa/amex gift card with credit. The margin is jugh enough to cover the credit card processing fee. They are however losing money on the sale of blue Amex prepaid temporary cards. The margin on these cards are ridiculously thin because they offer an alternate revenue stream. They also were losing money on the reload cards sold with credit as these have the same razor thin margin. (I’ve seen the P&L first hand)

  36. Seems really unlikely (as others have said) that cashiers would know the details of a complex rewards program like Chase Ultimate Rewards (Ink flavor). So I tend to think this rumor is a miscommunication, or an organized attempt at obfuscation on the part of someone for some reason.
    .
    On the other hand, it is true that someone, somewhere is losing money paying out $25 of reward points on a $4 transaction. I’m sure the tendency is going to be towards finding and stopping the ability to receive rewards on the purchase of cash-like instruments.

  37. Tried to buy a Vanilla GC last night in Houston, and the cashier said the manager would only let me buy $200 worth with a CC, but up to $500 with cash. That was only one store. I haven’t checked with others.

  38. mine closed 12/5/12 got the 5x point, then went an bought 1K giftcard again…and i always buy something else along with GC probably a $.50 cent crappy eraser, gum are over priced,.. and now i am stacked up with erasers.

  39. @Chunity – thanks. im in ‘town’ and so far so good, but next time im in your neck of the woods, ill keep on driving. =)

    @Adnan You’ve got a good idea… i (honestly) wonder if that has some merit. I’ve been inclined to buy a powerade on the way out as well… But they are double the price i can get at the grocer down the road. seriously, OD make it easier on me… #firstworldproblems

  40. NYC OD has no gift cards over $200 anymore, the cashier says they pulled them because they are too close to times Square and had fraud..

  41. My statement closed 12/15 (came in the mail today, forgot about that).
    Last billing period I had $3,771 of purchases that I expected to get 5x (out of a total of $3,771 in purchases for the month)
    I received 5x on everything. As I expected/hoped. That included 5X500 GC at OD, and 4X100 GC @ Staples. The other $871 was phone + internet bills and some other office supply purchases.

  42. I received 5%, but then got shut down. Apparently someone at Chase decided that purchases of $503.95 raise red flags and suspended my account. When I called about a declined charge the Sapphire representative transferred me over to some other department and they asked me if I bought prepaid cards. Not sure exactly what data they had from the purchase transaction, I figured lying a dangerous option. I simply pleaded ignorance and they told me they would notify me of what action they would take. Normally, she stated, “rewards abuse involves account closure.”

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