Welcome to the Travel Hacking from Scratch Series – a series dedicated to getting those new into Travel Hacking up the curve as quickly as possible. Below is the layout of the series with links back to already published articles.
Today our topic is Alternatives to DIY– understanding how you can use your miles and points without dedicating a bunch of time into learning the nuances of each program.
Let’s face it, earning points is almost comically easy if you know what you are doing. There are many ways for Canadians to earn points very quickly and very easily. With Canada trailing only the United States in lucrative sign-up offers and Manufactured Spend opportunities, it’s no wonder why there are so many Canadians walking around with millions of points.
When someone approaches me to learn about Travel Hacking they always want to know how to earn miles and points but I steer the conversation to Understanding Credit Basics, followed closely with the discussion around how difficult it can be to learn how to effectively use your points.
In the equation of Earning Points vs Burning Points, Burning Points is easily more challenging to understand.
I’ll be clear here – anyone can burn points … not everyone can EFFECTIVELY burn points.
It’s simple to plug in Vancouver to London in the Aeroplan search engine and come back with an Economy Class ticket with one connection and $800+ in taxes, fees, and surcharges.
Much like they teach kids how to do math the long way instead of handing them a calculator, I personally think that everyone that gets into this hobby should do their best to learn the nuances of the programs they are participating in. That being said, I can completely understand that not everyone can invest the time to learn about all the programs they have points/miles in.
You can devour blogs like mine and learn a good chunk of what I know and you can supplement that knowledge by attending conferences and meetups but I’m not going to lie to you, it’s definitely an investment in time.
The Alternative
Rather than learn everything you need to know about a particular program, you can just hire someone to do the heavy lifting for you. There are plenty of experts that can help you out and save you countless hours of frustration and it’s quite easy to engage them to help you plan your perfect trip.
All you need to do is have a good understanding of what you are looking for and an Award Booking service can do the rest.
In most cases, you let the Award Booker know what you are after, the number of miles/points you have access to and the dates of travel (including how much flexibility you have). If you have a solid understanding of what each airline offers in terms of hard and soft product, you can request specific airlines and even aircraft, though requesting aircraft can be a bit of a hit or miss proposition.
The Award Booker then takes your constraints and finds available award flights that would work with your request. If you can agree to the proposed itinerary, the Award Booker can then call on your behalf and book the flight or give you all the details you need to book it yourself. Your mileage may vary with each service but if they offer the ability to book the travel on your behalf, I would take them up on the offer.
If possible, I would suggest that you use Award Booking services based out of Canada because they understand the programs available to Canadians, as well as the best routings for Canadians.
Unfortunately, the list of Award Booking Services that are targeted at Canadians is pretty short but they all provide solid service.
Awarding.ca – started by Avery Campbell of Don’t Call the Airlines, Awarding.ca is the original booking service based out of Canada. Their fees are very reasonable (see below) and while I have never used their services, I have heard testimonials that suggest they provide a solid service.
Prince of Travel – Ricky of Prince of Travel runs a Points Consulting service that includes award bookings. If you have read Ricky’s blog, you’ll know that he’s a maniac when it comes to extracting value out of award bookings and he can do the same for you. The rate for Award Bookings falls under his consulting service so it attracts the same price at $200 CAD per hour. Your total price will largely depend on the level of effort required to source your itinerary but you can rest assured that Ricky will treat your itinerary as he would his own – expect great value.
Award Magic – run by Ari Charlestein, Award Magic is based out of the US but has a firm understanding of the needs of Canadian customers. Once upon a time, I worked with Ari on a specialty award booking service so I have a good understanding of his business model, his understanding of Canadian programs, and his desire to provide the best service possible for his clients.
The only downer for Award Magic is they charge in USD buy their fees are reasonable at $179 USD per passenger for standard awards and $279 USD for complicated itineraries.
Why It’s Worth The Money
If you have had any experience trying to find award tickets, you’ll know that it can be extremely easy or incredibly difficult. If you are a single traveler and you live in a hub city, it can be very easy to find an award. If you have a family and you live near a secondary airport, it can be a nightmare.
I have personally found awards in as little as five minutes but on the other extreme, I worked on a particular itinerary for over 2 months … granted, I was trying to piece together many pieces in the itinerary but regardless, it took a LOT of time.
If you are able to farm out that work to someone that has more time to tackle the problem than you, it’s well worth the money given how much time and headache you’ll save.
But I Want to Learn
If you want to learn how to do this yourself, just follow along in this series as I will cover off most of what you need to know and point you in the right direction for things that aren’t covered in my posts.
Feel free to leave comments as I do my very best to respond to questions and comments in a timely manner.
Welcome to the Travel Hacking from Scratch Series – a series dedicated to getting those new into Travel Hacking up the curve as quickly as possible. Below is the layout of the series with links back to already published articles.
Today our topic is Manufactured Spending – the Holy Grail of how to earn points quickly by living in the gray area of credit card earning.
In the simplest terms, Manufactured Spending (MS) is a method to “manufacture” spending on your credit card in order to earn points. We call it “manufactured” because it is outside the realm of your day-to-day spending. To make MS viable, your method should carry little or no cost.
There are many methods of MS but all methods flow through the process laid out below.
Why It’s Hard to Find Any Concrete Information on MS Online
Imagine one day you are sitting in traffic on your way to work. This is the same traffic you face on a day-to-day basis and you’ve finally reached the end of your rope. Rather than just sit in the traffic jam, you decide to try a new route and low and behold, your new route is actually much faster than your normal route. You’re so happy with the new route that you tell a few of your co-workers around the water cooler. They take your new route the next day and shave a bunch of time off their commute. They, in turn, tell a few friends and now the number of people that know about the route grows exponentially. With a couple of weeks, your new route is as congested as your original route.
This is why people don’t share MS methods, especially online where they can’t vet the people they share the information with. This is why it is so important to network amongst the Travel Hacking community.
Prior to writing this, I had hinted that I would be writing an article on MS. In turn, I was contacted numerous time by people that were desperate to keep their methods secret. I can understand that concern because I too share that same concern. Without knowing who is reading this blog and whether or not they are trustworthy, it would be foolhardy for me to lay out the step-by-step methods on how to reproduce an MS method because it would be immediately shut down by the retailer or the banks.
Essentially what MS is, is a method to find and take advantage of weaknesses within systems. Everything that I do with MS is not illegal and is within the terms and conditions of the programs but it does challenge the spirit of what these programs are trying to achieve.
I’ve always said that if you can understand the MS mindset, you can start to find your own methods. That’s why I’m going to walk you through some older MS methods and give you the rationale for why it worked, the economics behind the method, and how it eventually ended.
I think that this approach is a good middle ground that protects the existing MS methods so they remain viable but gives those that aren’t in the know an understanding of what to look for in an MS method.
Previously Active MS Methods
As I mentioned previously, it behooves MSers to keep currently active MS methods alive by not making the method publically known. The methods I will write about here are no longer active or only marginally active so don’t expect to make hay but if you can internalize the philosophy around these previous methods, hopefully, you’ll be able to find some methods on your own.
CIBC’s AC Conversion Card
Introduction
Back in around 2017, CIBC launched a new product called the AC Conversion card. It was a card that was done in partnership with Air Canada (I believe AC was only involved with branding if I remember correctly) and was intended to help those that traveled a lot to hold multiple currencies on one credit card.
I never fully understood the product because CIBC charged 2.5% in foreign exchange funds when you loaded a currency other than Canadian dollars. I suppose that the intent was for the consumer to load foreign currencies (at a 2.5% premium) and then use the card in the country of choice without incurring further FX fees … but why not just make the foreign currency transaction at the time of purchase?
The Opportunity
To allow for flexibility, the AC Conversion (ACC) card allowed for free ATM withdrawals of up to $2,000 per day if you used a CIBC bank machine.
What allowed this product to be leveraged was that the ACC allowed for Canadian dollar loading through credit cards, specifically Visa and Mastercard branded credit cards.
Take the two points above into consideration and essentially, what you had was the ability to load Canadian currencies onto your ACC card using a Visa or Mastercard, and then withdraw that money for free if you used a CIBC bank machine.
Because there were no fees involved, this was considered a “frictionless” MS method and it allowed many people to rack up points like there was no tomorrow.
How It Ended
Eventually, CIBC started to see that people were loading and unloading their ACC cards without using them for foreign currency purchases, so they started to put restrictions in place to stop this from happening. At first CIBC placed a limit of $100 loads per day for Canadian dollar loads but over the course of about a month, they eliminated Canadian dollar loading altogether.
Current State
The AC Conversion card is still an active product but due to CIBC’s actions, there are no MS opportunities left with the product.
Tilt
Introduction
Tilt was a startup online crowdfunding website that allowed friends, family, and acquaintances to pool money for any purpose they so desired. For example, if you were planning a ski trip with friends, and you needed a pool of money to cover off the group’s food for the trip, you could use Tilt to pool your funds.
The Opportunity
With Tilt, there were a few categories that allowed for money pooling without fees. One of them was if you wanted to Collect Money from a Group. As you can see from the image above, this activity attracted no fees. That meant that if you could get a group of friends together to contribute to a pooled activity and you trusted that the person who created the Tilt pool, you could send money to the pool using your credit card for free. The idea here was to put your money in a pool and for the pool leader to withdraw the money to their account and redistribute the funds.
This
is again an example of a “frictionless” Manufactured Spend method and one that
not too many people knew about.
How It Ended
In 2017, AirBNB acquired Tilt in a $12MM cash purchase. This purchase was not for the Tilt platform, but rather, the talented employees that worked for Tilt. AirBNB saw that Tilt was not profitable but had a surplus of Payment Experts that they desperately needed for their own company. In essence, the $12MM purchase was to ensure that AirBNB retained that talent.
Current State
Shortly after the AirBNB purchase was publicly announced, Tilt shuttered its service.
Royal Canadian Mint
Introduction
Many years back, the Royal Canadian Mint sold legal tender face value coins at par and if your order was over a certain amount ($99 if I’m remembering correctly), you would receive free shipping. Because these coins were legal tender, you could deposit them at any bank that accepted specialty coins and you would receive a deposit the funds back into your bank account.
The Opportunity
The Mint placed a limit of 5 coins per denomination of coin to protect itself from MSers. That meant that you could purchase 5 x $100 coins, 5 x $50 coins, 5 x $25 coins, etc, but you could do that all in one order.
There were a couple of ways you could take advantage of the opportunity even with the limits. The first was that you could simply max out an order and then do it again and again every single day but comically, you didn’t even need to do that. Back when this was viable, the Mint’s IT system was not actually set up to enforce limits, so even though the terms said each order’s maximum was 5 coins, you could actually add quite a bit more.
As you can imagine, once people found out about this, it was a free-for-all. There are many stories out there of people doing over $1MM in Royal Canadian Mint purchases. Outside of hauling thousands of pounds of coins to a bank, this was a frictionless transaction. You would purchase the coins using a points-earning credit card, receive the coins, deposit the coins, and use the funds to pay your credit card bills.
How It Ended
A couple of things happened that ended this treasure trove of MS. The first thing was that as more and more people started to understand this method, the Mint started to see their fees increase from banks. You see, banks charged the Mint money every time someone deposited a specialty coin. This wasn’t a big deal when it first started because across Canada, it was rare for someone to use a specialty coin as legal tender to purchase a chocolate bar but as more and more people MSed with this method, the number of returned coins skyrocketed.
The Mint tried to assuage these costs by actually placing a limit on purchases through improvements to their IT systems but ultimately too many people were simply purchasing and returning the coins through banks that it became untenable.
The Mint ultimately removed face value coins from their online stores but as I understand it, there are still some coins that can be purchased in person at either the Ottawa or Winnipeg Mint locations. This is unconfirmed so don’t go flying out to Winnipeg or Ottawa without confirming this information.
Currently Active MS Methods
There are a few currently active MS methods and in my experience, there’s always something out there if you are in the know. What I am going to write about below are some legitimately active methods. These methods conform to their intended uses so I wouldn’t say that they are groundbreaking by any means and they do attract a fee, but they are reliable and a good way to constantly grow your points and miles.
Plastiq
Introduction
Plastiq is a service that allows you to pay for services using your credit card even if the company you are trying to pay doesn’t accept credit cards. Plastiq does this by taking a credit card payment from you and then sending either a wire transfer or cheque to your intended payee.
The Opportunity
Depending on who you want to pay, it may take a bit of legwork to get started but it’s viable and unlikely to get shut down. The trade-off is that you do pay a transaction fee of up to 2.5% but there are many promotions that provide a cheaper rate. You can also sign up through my referral link which provides you with 500 Fee Free Dollars (FFD). This means that if you make any payment to any vendor you want, you won’t pay fees on the first $500 of the transaction.
For example, if you sent a payment to your personal trainer for $500, you would not pay any bills because your first $500 is fee-free.
Tips and Tricks
With the American Express Gold Business card, you can denote three retailers as your “preferred suppliers”. This designation earns you 2x Membership Reward points for every dollar spent and as luck might have it, Plastiq is one of these suppliers.
In the example above, if you used your American Express Gold Business card to make your payment to your personal trainer, you would have no cost (because of your Fee-Free Dollars) and you would earn 1,000 Membership Rewards points (if you select Plastiq as your preferred supplier).
If you want to be on top of what promotions are out there with Plastiq, I would recommend that you keep an eye out for any emails from Plastiq. If you can’t be bothered to check your emails, you can always hit the Support button on the bottom left-hand side of any Plastiq webpage to ask a representative if there are any promotions currently ongoing for payments. In my experience, they are very willing to help you find the best promotion for your specific need.
With Plastiq, virtually anything is payable by credit card, including your rent. I remember back in the day, it was such a pain to pay my rent either in cash or with a cheque. You can use Plastiq to take care of your rent payments automatically as you can schedule payments. Not only is it more convenient, but it also means that you earn miles and points for something you have to pay anyway.
In my previous article about which credit cards you should get and why I dropped a pretty big hint that you should pick up the American Express Cobalt Card. The reason for that is the American Express Cobalt card earns 5x Membership Reward Select points when you use it at restaurants and grocery stores.
These points can be used in a multitude of ways, including transferring to Marriott points (my preferred use) but there are many more ways to maximize their usage.
The Opportunity
The great thing about the Cobalt card is that many grocers take American Express AND sell gift cards. That means that if you were to purchase $1,000 in gift cards, you would earn 5,000 in Membership Reward Select points. If you used those points to redeem for American Express’ Flexible Points Travel Program, those points would be worth $50.
You could also use those points through American Express’ Fixed Points Travel Program.
With the Fixed Points Travel Program, in combination with the Cobalt card and purchases of gift cards, you could purchase $8,000 in gift cards and earn 40,000 Membership Reward Select points, enough for a Long Haul flight with Canada or the US (maximum base fare of $700).
I know what you are thinking. What am I going to do with $8,000 in gift cards? Well, you could resell them of course. Whether it be through Kijiji or an online gift card reseller, you should be able to recoup most of your money with a bit of legwork. There’s also always the option of purchasing pre-paid or reloadable Visa or Mastercard at some grocers. Some of these tend to have fees associated with them but they are transparent and easy to understand. Do the math for yourself and see if it makes sense to dive into these kinds of cards.
Tips and Tricks
Whenever I am looking to make a purchase for something on Amazon, I ask myself, “should I purchase an Amazon gift card at a grocery store rather than purchase directly from Amazon?”. Most often, the answer is yes.
Here’s an example of how I might stack earning of points for a $1,000 purchase on Amazon.
Many gas stations code as 5x for Cobalt purchase for some reason so I would go to Shell and buy 2 x $500 gift cards with my American Express Cobalt Card = 5,000 Membership Reward Select points + at Shell, gift card purchases qualify for AirMiles but only to a maximum of 10 per $100 spent. If you wanted to really maximize your value, you could buy 10 x $100 gift cards and earn 100 AirMiles.
Take the gift cards back home and load them onto my Amazon account.
Go to a cashback site like Great Canadian Rebates or Rakuten and search for Amazon.ca as a retailer. There’s usually a cashback offer from both of these cashback sites – search for the most lucrative (at time of writing, it’s up to 8% cash back from GCR) = Up to $80 cashback on $1,000 purchase
So for a purchase, you were already planning on making, you would walk away with 5,000 Membership Rewards, 100 AirMiles, and up to $80 cashback. Not too shabby.
Conclusion
When I first started in this hobby, there were very few resources available to Canadians that wanted to learn more about Travel Hacking and specifically Manufactured Spending. As you evolve in understanding of what MS is and how to spot opportunities, you start to realize that MS opportunities are all around you. You just need to know how to look.
Much like the people that scour garage sales for antiques, you need to know what to look for in order to find it.
The fastest way to accelerate your learning is to build a network of like-minded people that can search and experiment with you. Look for conferences, meetups, and experts you can talk to.
I can’t promise that I can be of any assistance but if you want to bounce some ideas off me, you are free to reach out to mevia my Contact Page.
Hopefully, this article has opened your eyes to the possibility of MS and how you can get started.
This is a short post but an important one. A couple of weeks ago, I posted a new guide on how to obtain an ITIN through a service provided by US Tax Resources (USTR) so you can up your credit card game by qualifying for US Credit Cards.
In that post, we offered those that commented, a chance to win the services provided by US Tax Resources, specifically, a prepared US Tax Return and an ITIN Application.
By using US Tax Resources, you are virtually guaranteed an ITIN. I say “virtually” because the US Internal Revenue Agency always has the last say but USTR can provide you all the proper paperwork and guidance to ensure that, if you are eligible, you will receive an ITIN.
The Winner
There were 30 entries into the promo and thanks to Google’s Random Number Generator feature, Comment 21 wins the contest.
That comment was provided by L Huang.
Next Steps
US Tax Resources will be in touch with the contest winner and once the process is completed, I will ask that L Huang provide feedback on his/her experience so that others can understand how easy the process is.
Congratulations L Huang. Looking forward to hearing about your experience with US Tax Resources.
Back on September 14, 2019, Marriott introduced the idea of dynamic pricing for its free-night redemptions. This meant that each Marriott property had the option of changing their award prices based on demand.
As an example, in the old Marriott Redemption Award chart, hotels in Tokyo could only charge the price denoted based on the hotel’s category. This meant that during the 2020 Olympic Games, hotels could not ask for more points on a redemption stay even though demand would be through the roof. Hotels got around this by only offering up a limited inventory of rooms but Marriott tended to frown upon that practice and it wasn’t a very fun thing for loyal Marriott members.
Now, in the new system, Marriott hotels, while still bound within their category, now have a way of charging more during peak periods through the new Marriott Redemption Chart.
Most people viewed this as a negative development but with anything in life, it depends on how you use the information.
Often times with this hobby, you tend to travel during off-peak periods because that’s when there’s good flight award availability so there’s a good chance you can actually use this new chart to your advantage.
A Quick Check to Save Thousands
I was taking a look at my upcoming reservations for the Ritz Carlton Residence Honolulu in January. When I booked the hotel about a month ago, the total price was 450,000 Marriott points for a 10-night stay. I’ve removed some details from the booking to protect my privacy but each night cost me between 50,000 and 60,000 points.
Remember, with Marriott award stays, every 5th night is free when you book 4 nights in a row so I only actually pay for 8 nights during my Honolulu stay. That works out to 56,250 points a night (450,000 / 8 nights).
A couple of days ago, I was double checking my bookings and my curiosity got the better of me. I wondered if the price for my award stay had changed, so I searched for a new award booking with the same dates of travel. To my surprise, the cost of the room was actually 10,000 points cheaper!
I quickly booked the cheaper rate, cancelled my existing award, and pocketed 10,000 Marriott points for my troubles. I checked the remainder of my other award stays and all of them had gone up in price so I was quite content to leave them as is but you’d better bet that I’ll be checking them periodically to see if can save some more points.
Best Practice
I’ve been burned before so what I would recommend is that if you come across this situation; book the lower rate first before cancelling your original booking. I would also recommend you continually check your bookings prior to your stay to make sure the pricing doesn’t drop. Remember you can only do this up until the no-penalty cancellation date of your hotel booking.
Book the cheaper rate firstThen cancel your existing booking
I called into my Marriott Ambassador and he has confirmed that hotels have the ability to update their peak and off-peak dates daily so prices can change at any time. If you have the time, keep checking back on your booking because there can be up to a 15,000 point drop per day, which can be pretty substantial.
Conclusion
I’m a pretty curious person at heart so I’m always looking into the nuances of all the programs that I participate in. Hopefully, someone uses the information from this post to save themselves some Marriott points. Good luck!
