Can you earn a zillion frequent flyer miles without spending a dime?
It turns out you can. Sorta. Sometimes.
In certain circles, the search for free frequent flyer miles is as compelling as the hunt for the fountain of youth. Unlike the pursuit of eternal youth, though, the search for free frequent flyer miles occasionally hits pay dirt.
Some of you will remember the Pudding Guy story from 2000.
David Phillips, a California engineer, took advantage of overlapping frequent flyer promotions to earn 1.2 million miles by purchasing 12,000 cups of Healthy Choice pudding, for $3,000. At the time, I put the value of those miles, redeemable for 48 free domestic tickets, at about $20,000. Not bad for a $3,000 investment. (In case you’re wondering, he gave most of the pudding away to charities, soup kitchens, and the like.)
Fast forward to today.
The U.S. Mint has been selling $1 coins in bulk, at face value, with no shipping or handling charges. Canny consumers have been buying the coins and charging the purchase to a mileage- or points-generating credit card. When the coins are delivered, the buyer simply takes them to the bank and deposits them, using the money to pay for the purchase when the credit card statement arrives.
At the end of the day, the consumer is left with the frequent flyer miles, but hasn’t spent a cent to earn them. (The same tactic can be used to generate cash, if a rebate card is used instead of a mileage card.)
As the Healthy Choice gambit became identified with the Pudding Guy, the U.S. Mint scheme has come to be associated with Mr. Pickles, the screen name of a self-described “person of limited resources,” who “learned in my life to make what I have go as far as it can by being as resourceful as I can.” He reportedly purchased $800,000 worth of coins, earning a like number of airline miles in the process. His only expense, aside from time: a few gallons of gas for the trips to the bank to deposit those 800,000 coins. Resourceful, indeed!
This technique has received a lot of attention on sites where the mileage-obsessed congregate, such as FlyerTalk. And it recently came to national attention, courtesy of the Wall Street Journal. Such high-profile coverage of the scheme probably signals its end. In fact, the U.S. Mint’s website now warns that “such purchases are not eligible for credit card rewards, cash-back, cash rebate, and similar programs. Check with your card issuer for its terms and conditions.” And, as we go to press, the spendable coins (as opposed to commemorative coins, which can’t be deposited) won’t be available for sale again until December 23.
Deal or No Deal
If the coins come up for sale again, with free shipping and no restrictions on credit card earnings, this is certainly a deal when assessed in pure dollars-and-cents terms.
But I cover this and similar mileage-related stories not because I recommend such tactics. While this scheme is neither illegal nor immoral, I don’t spend my time chasing after every last frequent flyer mile, and neither do most of my readers. Still, shining a light into this obscure corner of the mileage-earning universe is both entertaining and instructive.
As I said when I reported on the Pudding Guy’s exploits, his was “a case study in how an unintended mismatch between price and incentive can be exploited to your advantage.”
Ditto for the Mr. Pickles story.