By Julian, author of Devil’s Advocate…
Normally the “Bet You Didn’t Know” series is focused on tips and tricks rather than news, but there have been several recent items of interest that I’ve seen only lightly covered across the blogosphere, or in some cases not at all. And since these are important tidbits that points and miles collectors should know about, we’re going to switch it up a bit this week. Call it a “Breaking News” edition of “Bet You Didn’t Know.”
Is Sears close to closing?
As most Frequent Miler readers know, Sears (along with its sister chain Kmart) have been teetering on the edge of collapse for years now. With endlessly increasing debt and multiple waves of store closings, Sears CEO Eddie Lampert and his hedge fund have proven themselves completely incapable of running any sort of major retail operation, and at the same time have managed to make themselves rich doing it. Sad!
Well, it appears the chickens are close to coming home to roost. Two days ago Moody’s Investor Service issued a note downgrading the company’s liquidity, indicating that Sears is bleeding cash and in potential danger of shutting down. It appears Kmart is most at risk, having seen its sales drop from $37 billion in 2000 to only $10 billion last year.
Sears quickly attempted to rebut the Moody’s report, but there’s no hiding the fact that both Sears and Kmart are hurting for cash. Sears has burned through $1.5 billion of the $1.8 billion it had in cash as of a year ago, leaving it with only a little more than $250 million. That may still sound like a lot of money, but when you’re a company trying to keep over 700 stores fully stocked, cash can disappear quickly.
So what does this mean for points and miles collectors? Well, Greg the Frequent Miler regularly writes about methods to leverage Sears deals to earn extra travel points and miles. In many cases, stacking Sears gift cards along with shopping portals and the Sears “Shop Your Way” loyalty program can result in points along with great deals on merchandise you actually need or low cost products for resale. Just yesterday Greg demonstrated how he was able to earn a 64% rebate on the purchase of Fitbit trackers by stacking several discounts and rewards at Sears. There’s even a page here at Frequent Miler dedicated entirely to Sears and Kmart Extreme Stacking.
The danger here is not only losing these methods if Sears and/or Kmart disappear, but also potentially getting stuck with worthless Sears or Kmart gift cards. In many cases when a bankruptcy liquidation occurs, customers have an opportunity to redeem their gift cards before the retail chain completely disappears. But it’s not guaranteed.
So if you’re currently sitting on Sears or Kmart gift cards for any reason… don’t. Liquidate now while it’s still easy. And if you’re considering purchasing Sears or Kmart gift cards in the future, make sure you have a plan to unload them quickly. You do not want to be left holding worthless pieces of plastic when Sears eventually gets sent to live at a farm upstate.
Is RadPad having liquidity issues?
A few weeks ago my friend and fellow Travel Codex writer Amol tweeted about an issue he had paying his rent with RadPad…
So my @radpad rent check couldn't be deposited because of insufficient funds …. turns out I'm not the only one https://t.co/iraY8aFkci
— Amol (@PointsToPointB) September 2, 2016
If you dive further into the Reddit thread that Amol linked to, you’ll find several reports of folks receiving bounced checks from RadPad. You’ll also see several comments from Tyler Galpin, one of the co-founders of RadPad explaining that the bounced checks were not a result of insufficient funds but rather simply a funds transfer issue…
Then about a week after the RadPad issues started, a post appeared on medium.com in which the writer claimed the rejected checks were emblematic of further issues at RadPad, alleging that employees had been asked to take pay cuts and in some cases laid off due to liquidity issues.
Interestingly, that post was pulled soon thereafter by the writer and replaced a few days later with a retraction stating that the check had not in fact bounced but just been placed in a fraud prevention hold, and that in any case the CEO had personally hand delivered a new check to the landlord.
So what the heck is going on here?
The answer is… I’m not sure. It’s possible RadPad could be having liquidity problems. Given the recent massive influx of payments from their aborted Android Pay promotion it’s not out of the question. On the other hand, it’s also entirely possible that RadPad simply had account management issues. I have yet to hear of anyone who had an issue that didn’t eventually get corrected, and there haven’t been any new reports of check issues in the last week, so I wouldn’t dismiss that possibility.
The point to be made here is not that you shouldn’t use RadPad, but rather that you should always exercise caution when using payment services. If you’re paying with a credit card, then you are generally safe as you can dispute the charge if payment isn’t made. But if you’re using a debit card (as many folks here are), you usually do not have that option, so you are accepting some additional risk.
I don’t use RadPad, but if I did, I don’t think I’d be panicked about it at this point. But I’d definitely keep in touch with my landlord to make sure the checks he or she received were both on time and clearing normally.
Is the new Southwest Standby perk worthwhile?
Two days ago Southwest Airlines announced the launch of a new perk for their A-List and A-List Preferred members. Elite customers can now fly standby up to two hours before or after their scheduled flight.
The news here is not the lack of fees. Southwest never charges a change fee as long as changes are made before departure, and there will be no fee for flying standby either. Rather, the big deal is that those who fly standby will not have to pay any increase in airfare for switching flights, which is certainly a welcome change from the old policy of requiring customers upgrade to the more expensive Anytime fare in order to fly standby.
That being said, this perk only applies directly to individual A-List and A-List Preferred member, not to anyone else flying on the same reservation. This means it’s not terribly useful for people flying together unless they’re both elites. The change also has to be requested at the airport and not by phone, which further limits the utility of using it to fly on a later flight.
On top of all that, the Wandering Aramean has done some deep digging and found that only 18% of all Southwest routes even have multiple flights within two hours of each other for which this standby feature would be usable. If you want to know which specific routes have the best and worst options, definitely click through the link and check out his detailed work.
Obviously we always approve of an airline increasing options, but it would be nice if Southwest made this one a little more practical. Hopefully with some encouragement from their customers, Southwest will broaden this one out over time.
Other Recent Posts From The “Bet You Didn’t Know” Series:
• Left an Item on the Plane? Use the Online Automated Lost and Found
• JetBlue Blue Flex Fares Are Cancelable, But NOT Refundable
• How To Look Up Your Priority Pass Guest Policy Online
Find all the “Bet You Didn’t Know” posts here.
[…] • A Quicker Way to Finish Draining Prepaid Gift Cards at Amazon • Is Chase Using Bulk Fares for Sapphire Reserve Tickets? • Sears Shutdown, RadPad Issues, and Southwest Standby […]
[…] Sears Shutdown, RadPad Issues, and Southwest Standby • Left an Item on the Plane? Use the Online Automated Lost and Found • JetBlue Blue Flex […]
Anticipating their demise I used my last gift card over the holidays. Their website is a complete joke. I ordered a blanket and when it arrived they had just crammed it into the box where the label around the blanket was torn. Luckily it wasn’t a gift. The store near me closed years ago. It was always empty, the prices were ridiculous and you could never find anyone working there. I’m amazed they’ve lasted this long.
This might explain why the three Sears stores I went to this week were putting a lot of tools on clearance. There were a lot of empty shelves.
I have noticed that the discount for exchanging CC rewards points to Sears GC have gone down. I used to be able to get 20% off, now it is 10%.
I resell a lot from Sears and have noticed things going out of stock without being restocked.
There has been speculation for a while in the investment community that the popular brands might be sold off individually (Craftsman, Kenmore, Diehard, etc).
If it falls apart, I hope Citi rebrands my Sears MC and keeps it open. That was my first CC, back in 1984!
Any company worth anything will have daylight overdraft and overdraft protection. I work in Treasury and its basic stuff. What they are going through is liquidity issues. If you want to see where they are headed look at Gift Card Rescue.
Hey, the farm upstate is nice!
Lampert gets paid in stock and his fund just loaned another $300 million to Sears. Google it.
In a bankruptcy the bondholders (lenders) often wind up with all the stock. Perhaps he wants to have Sears declare bk and take it private, then do the work to build it back and go public again.
Not trying to argue with you, but Lampert making a $300 million dollar loan to Sears, when he already owns a large percentage of the stock is not making him rich. He has lost a fortune (so far) on Sears because of how much the enterprise value of the firm has fallen. Losing $100’s of millions on an investment is not making him rich.
Unless you are Donald Trump, then you can run any number of Casino’s into the ground while making millions.
“With endlessly increasing debt and multiple waves of store closings, Sears CEO Eddie Lampert and his hedge fund have proven themselves completely incapable of running any sort of major retail operation, and at the same time have managed to make themselves rich doing it. Sad!”
Curious what makes you say that Lampert has been getting rich from Sears, when it has been the exact opposite. His net worth has been plummeting due to his ownership of Sears stock. Political reporting could be up your alley – sensational writing without facts.
If we are picking on Sears here, how about this one:
Just before Christmas three years ago, I order two foosball tables and a pool table. The truck gets here and they have one foosball table and a Christmas tree for me. Took me until May to get it straightened out.
Haven’t ordered anything from them since
IDK about all Sears but here in NYC I’ve placed an order for a car battery and Sears closed that auto shop and claims that I’ve already picked my order up. Any time I call they treat me as I’m trying to scam them, whereas they are the ones who scammed me. The district manager looked into the issue (supposedly) and thinks that I’ve picked up. They probably look to my orders with rolling SYWR and gift card purchases and assume I must have scammed them. In Rego Park store they won’t let you to scan your order number into the machine so they can display 5 minutes pickup award sign while you wait till the employee goes and finds your item in the store when they’ve sent ready to pickup email days ago. I’m over the battery I’ve lost (at least I got big portion back in form of SYWR for that order) but any time I think about them I hate to remember the way they talked to me. Talk about bad culture there.
I have had ten successful payments with radpad until last month when i changed it to account transfer to avoid the fees. The check made it to the landlord a good 18 days after it was first deducted from my account and numerous emails . They did not even have the courtesy to notify either the landlord or the user that the account payments would take additional processing times. They now need me to pay atleast 10 business days ahead. Needless to say i wont be using radpad again. Chase quickpay is a better way to pay with no fee.
When I saw your headline, I thought it might have something to do with a recent experience with my Sear Mastercard (but it didnt’). This is a card we’ve had for years and haven’t used in years. I noticed they slashed our credit line (due to nonuse of the card). Because I was concerned about the effect it might have on our credit score (and we were in the process of refinancing), I decided to just close the account. Similarly, I got an email from my BMW card that they will close it if I don’t use in the next 30 days. I’m going to use it so I can keep it open (but I know I’m going to take a credit score hit one way or the other …using an account that I haven’t used in a while or closing an account and losing available credit).
When I first submitted my rent check through radpad, I left off part of the address and the check was returned to RadPad. They immediately reached out to me and offered to overnight a new check. The new check was deposited on 9/12 and it did not bounce. Just wanted to share my positive experience with them as it seems like it was a small number of individuals who were having issues.