A couple of weeks ago, my wife, my son, and I all applied and were approved for new credit cards (see: 3 Inks approved again. 420K points “in the bag”). In total, we expect to earn 420,000 bonus points once we meet the welcome offers’ minimum spend requirements: $8,000 per card. And that’s where this experiment comes in: My intent is to use buying groups to manufacture that spend. The cards finally arrived in the mail and so I took my first stab at generating spend through buying groups. The result? Not so good, so far…
Buying groups, background
I don’t have much experience with merchandise buying groups, but I like the idea behind them. Stores often have sales with limits of how many can be purchased by each customer. Buying groups make money by reselling these items. They can’t directly buy in quantity at advertised sale prices, but they can do so indirectly by buying from people like you and me. So, we buy as many as we are allowed and have the items shipped directly to the buying group’s address which is always in a sales-tax-free state. Then, the buying group pays us back. Sometimes we even make a small profit. The point, for us, is primarily to increase credit card spend and to get that money back.
For a more thorough overview of buying groups, including the many risks and cautions to be aware of, please see Tim’s post: Using Buying Groups to Increase Credit Card Spend.
- Risk of non-payment is real, both in merchandise and gift card buying groups. Like all companies, buying groups sometimes go out of business. In those cases, there are often customers left holding the bag. In one of the most notorious cases, a gift card group went out of business and one unfortunate gal was owed over $100K. This is one of the reasons why it's wise to diversify as a general rule.
- Some retailers like Target, Best Buy, Ebay and Dell will block accounts that they suspect are reselling from ordering through their sites. Dell operates on a hair-trigger. Shutdowns happen. Most folks reading this will probably not be buying from these retailers at a clip that draws their ire (outside of Dell), but go in with eyes open.
- Amazon.com allows buying 3rd party gift cards with Amazon gift card credit, but Amazon has been known to shut down the accounts of some customers doing this. If you value your Amazon account, proceed with caution.
- Amazon.com is also one of the easiest retailers from which to drop-ship. Shutdowns do happen, though. It pays to start small, ramp up slowly, and pay as much as you can for buying group products with credit cards instead of Amazon gift cards.
My Buying Group Experiment
In my family we have three new credit cards in which we need to spend $8,000 each in order to earn our welcome bonuses. In order to learn first hand about buying groups, I decided I would meet those spend requirements through buying groups. Specifically, my intent was to use a different buying group with each card. Here are my original words about the experiment:
Tim recently published an awesome post: Using Buying Groups to Increase Credit Card Spend. This is my inspiration for how to meet the $8K spend requirements on each of the three new cards.
To-date, I’ve barely dipped my toes into buying groups. I think it’s time for that to change. My idea here is to sign up for three different buying groups and try to meet the minimum spend on each of the 3 Ink cards with a different buying group. That way, I can see for myself the pros and cons of each one and I can share my successes and failures with our readers.
Based on the descriptions of buying groups in Tim’s post, here are the buying groups I’m thinking of including in this experiment:
- BuyForMeRetail (BFMR)
- MaxOut Deals
- Pointsmaker
Starting with BuyForMeRetail (BFMR)
Yesterday morning, I signed up for BFMR and started looking for products I could buy to meet spend requirements. I clicked on “Deals” and found 45 of them teed up. I sorted by highest payout with the idea that I’d buy a few large items and be done:
Wow, that looked great! It looked like I could buy a few laptop computers and get half way through one card’s $8K spend in no time! When I clicked on the top item, BFMR showed me that they would pay $10 above retail and included a bunch of hyperlinks to versions of that product that could be purchased at Amazon and Costco:
The problem was that when I clicked through the Amazon links, the item was no longer available; and when I clicked through the Costco links I found that the item was more expensive than BFMR claimed. I would lose money if I went with this deal.
I clicked on item after item and found the same thing. In almost every case, the item was either out of stock or the price was higher than BFMR suggested. I have no doubt that all of these items were previously on sale, but they weren’t any more.
I finally discovered the “in stock” selector, which only shows deals that are still available:
Out of the three items “in stock,” only two pay out fully. With the third item, BFMR pays out 3% below the purchase price. No thank you. I looked at each of the other two and found that the prices at most of the listed stores had gone up, but Costco was still offering the listed deal. But I didn’t have a Costco membership.
Costco’s basic “Gold” membership costs $60 per year. I did some Googling and found a deal to get the Gold membership plus a $30 Costco Shop Card for $60. OK, with that combo my net cost should be only $30 for the membership. I signed up. My Costco Shop Card is expected to arrive in a couple of weeks via email.
I loaded the maximum 2 iPads and 2 MacBook Airs into my cart, set the delivery address to go to BFMR and checked out with my Ink card. In a spreadsheet, I recorded the details. In one fell swoop, I had generated nearly $2500 of spend and expected to get most of it back (I won’t get the $60 membership fee back, but a future purchase should be $30 cheaper when I use the Costco Shop Card).
I was aware that many stores auto-cancel drop-ship orders like this one, but I felt good when I received an email saying that my order was confirmed. Awesome.
Then, an hour later, I was informed that my order was canceled. Boo!
OK, OK, there were still some things I could try. BFMR has a bunch of addresses that you can use if the primary one doesn’t work. Also, in the comments of his post, Tim suggested with Costco that it might be better to enter credit card details upon check-out rather than using a stored payment. I figured I’d try both of those options at once.
So, I went back to Costco.com to buy a laptop. I figured I’d start with just one this time. The product landing page showed the $949.99 sale price and so I added it to my cart. But when I went to the cart I found that the price was $1,049.99. What?! I tried again with a different color laptop and the same thing happened. Then I tried the iPads and found the same pattern. Finally, it dawned on me: both of these deals were “max 2 per customer.” I had already bought 2 of each and so the system wasn’t allowing me to buy more at that price. Swell.
Summary
I dipped my toe into the buying group waters and my toe got slightly burned. I bought a $60 Costco membership to take advantage of a couple of deals that were “limit 2 per customer” and I bought two of each. Then, my order was cancelled. And when I tried again, I could no longer take advantage of the deal, presumably because I had already maxed out my 2-per-person allotment.
So, my total credit card spend so far with this experiment is $60 (for the Costco membership). And the amount I expect to get back from buying groups so far is $0.
Don’t worry, though. The experiment isn’t anywhere close to done. I expect that new deals will appear over the next weeks and months and I’ll get some or many orders to go through. Lucy is holding the football and I’m gonna kick it.
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Got banned from Best Buy in 2020, but man what a ride before that. Amex had an offer for +1 MR at BBY with NO to points earned. Even after exhausting my BBP 2X (3X with the offer), I could still get 2X for the rest of the 9 months that the offer was live. Can’t even recall the number of SUBS I met, but my Best Buy business account allowed me to buy 25X iPads per transaction (all 3 colors and capacities). In other words, 150 iPads per transaction, 3 transactions per day.
Ah the good old days
I saw advertised a new Buying group concept its a buying group marketplace called Deal & Runner I think they maybe the solution to buying groups as they act as the middle man and take deposits on behalf of the buyers
Any update on this and knocking out the $24K in spend?
I hope to publish an update soon. I haven’t had much luck so far but I also haven’t spent much time on it
Looking forward to it. Good Luck
The problem with this article is not THAT is was published but WHERE it was published. This article is better suited to the avid hobbyist and not the uninitiated. For the avid hobbyist, the proper forum is a private group or chatroom. For the uninitiated reader, who doesn’t understand the risks but who decides to give it a try, it’s like giving a four-year-old a loaded gun. And, some uninitiated reader will naively give it a try and either 1) lose a chunk of money they can’t afford to lose or 2) get banned by one or more card issuers. In good conscience, the author should pull this article.
I think bank account funding, gift card buying groups, and fluz are better methods for meeting SUBs quickly
Of course bank account funding or liquidating VGCs /MCGCs are better methods but those won’t be revealed to the masses or at least the ones that have under 2% in fees. Hence the experiment.
I’ve never tried them, but Why do you feel that gift card BG are better to meet SUB?
Honestly, I hope this post doesn’t encourage a lot of people to try BG’s for quick, easy, safe MS. There are many, many, risks. Over the last 2 years, I’ve done $160k+ through several BG’s. I’ve been both IP and Address banned by Best Buy, Dell, Amazon, Steam, and a few others. I’ve had to clear numerous fraud blocks and deal with thousands of dollars of lost and damaged items. You’ll need to keep records and track everything and it’s work.
Having said that, I still do it, and it can be profitable, but everyone will deal with the problems after enough time and volume. Retailers do not support reselling and don’t believe you’re doing something that they’re ok with, just because it’s low volume. They just aren’t aware of it yet.
The best deals were on Prime day last Tues morning where tons of at-cost deals for Amazon were available for BuyForMeRetail. I did about $25k in matter of hours and met spend for my CIBP, BBP with targeted 50k bonus for $15k spend, and Hilton Business card. I expected payments to be delayed due to it being such a busy time, but I already got reimbursed 12k which is quite a fast turn around time compared to last year’s. It’s all about timing and preparation – you’ll have to be ready by morning of every Prime Day to maximize getting the best deals. There will also be deals dropping on Black Friday and around the Holidays but not nearly as much.
How do you not get Amazon orders canceled for quantity limits?
for some reason they didn’t cancel orders on prime day for quantity limits. I ordered using the same account many of the deals and they weren’t canceled…2 days later and they are getting canceled again for quantity limits.
Too bad not know this. I spent $8k but was hoping for more.
Yes, they were very generous on Prime Day and let you order 3 units of each watch variation. I did 13k in 1 account and 12k in another. Only one batch order for the $220 watches were cancelled for me.
BG’s entail a fair amount of record keeping to make sure you do it correctly. And you need to pick the good groups to use. I’ve used 2-3 different groups and done over 250k (probably closer to 300k) over the past 2-3 years to meet many SUB’s, 5% bonuses, etc… using all sorts of cards from all banks (Amex included). Just did 27k at the recent Prime Day (Black Friday is the other big day for BG’s). I’ve only had 1 minor issue with any of my orders and it was corrected by the group quickly. Orders get cancelled all the time – that’s part of the game. You have to scale some (or a lot if you can). In the end it’s really not much time spent for a lot of benefit. YMMV of course.
I did around the same volume as you for about 2 years with mostly minor issues, which also replaced my WMT/Money order trips.
Until one time Amazon shutdown my account and will not reopen it no matter what i tried. Once your Amazon account is shutdown, Amazon will not provide you with any tracking #, and your orders will still ship despite the shutdown email saying all orders have been canceled. You just can’t ever retrieve the tracking #s.
So i reached out to BFMR to see if they can find my packages by using my unique User ID. They said they can’t find any package under my user ID, which is kind of crazy that they typically don’t have much issues (other than the stolen Apple Watches earlier this year), and now suddenly they can’t find any package. I lost about $5-6k of shipments, which pretty much nearly wiped any profit i made in the past 2 years.
So i filed a dispute with my credit card in which i lost the dispute on, bank citing the package was delivered and SIGNED according to tracking info. Amazon then shut down my wife’s account citing violation in relation to the other problematic account.
So while BGs go without issues most of the time (i’d say 98-99% of the time normally), that one time basically wiped all my time and effort spent. I still come out ahead (barely), but it’s not worth the time and effort. All it takes is just that one time. I’d recommend anyone, if going through the BG route, tread carefully and slowly and not float too much cash out there.
Did they mention what was the specific cause of why your Amazon account was shutdown? Was it a new account (less than 2 years old)? Did it have anything to do with giftcards?
Costco can be tricky to get orders through. Amazon business accounts (without Prime) usually work OK. Open a new Walmart account with a different email from your Walmart+ account (don’t add Plus) and send a $1 cable or something to the BG to season the account. Then you should be good to go.
Hi,
Been using buying groups for years now. Do almost completely amazon only orders, spent 100’s of thousands of dollars all toward SUBs. I have RARELY had situations that items were lost. The one time i know about, I got a full refund on what i ordered. Just this past prime day did 21k plus (6k for platinum 75k upgrade bonus, 15k for BP NLL 150k targeted offer). Although nowadays they undercut you a few percentage points a lot of the time, there are still opportunities.
In addition, Most of the SUB were for Amex cards.
The problem with Buying Groups is that once you lose 1 item, you lose a chunk (or all or even more) of the profit/spend. Aside from Prime Day and Black Friday, most of the deals are below cost (2-3% off). So let’s say if you are buying it at 3% profit, then if you lose even 1x out of 33 items, then you’re barely breaking even.
Some Buying Groups also deliberately “miss” one shipment (or 1x merchandise since you send 3x most of the time) if you are new. Sometimes they also come out a couple days (or a couple of weeks) later and say oh that AirPod box from weeks ago is empty and just deduct it from your balance.
They know a lot of new accounts are there to meet minimum spending, which means you are technically earning 10-15x per dollar spend, and losing a package shouldn’t matter that much since you’ll be earning 100-150k on sign up bonus, hence a lot of below cost deals to cater the SUB folks.
A lot of shipments get “lost and stolen” too, especially over the weekend shipping and via Lazership or OnTrac. The AirPods especially since the package is small and there are blind spots inside Amazon warehouse. The delivery guys in DE also know what’s inside and will “take” some of them, knowing there is little repercussion doing so. Once you get shutdown by Amazon, Buying Groups will also tell you they never received the packages, because they know Amazon will not provide tracking #s to shutdown accounts, therefore there is no way for you to prove the items arrived.
This method is really only for the super casual who are meeting SUB and can afford losing a few hundred dollars, and the super heavy hitters that make the numbers work.
*Edited for spelling
Yeah. The margins are absolutely terrible, the risks are through the roof, and half these things are literal ponzi schemes.
Buying VGCs is a closed loop (you pay yourself) and if you’re holding the bag bc you can’t liquidate, well you still have a pretty fungible gift card on your hands. Biggest dangers are shutdown or fraud. Much more manageable and much smaller risks.
People who MS without understanding the underlying mechanics of the system they are gaming WILL get burned.
Yup there are a lot of things that can go wrong with Buying Groups, since there are lot of more parties involved than just your own closed loop system:
Your bank could shut you down (Chase, AMEX…etc)Merchant could shut you down (Amazon, Best Buy, Dell, Walmart…etc)Merchant warehouse could steal your package (camera blind spot)Merchant could send the wrong items or send fewer than expected (Walmart is especially notorious for this)Delivery drivers can steal packages (especially small ones like Airpods)Delivery drivers can leave packages at a random spot and marked as delivered. This happens a lot for same day late night shipments.The packages can arrived “damaged” when in reality it’s just not in resalable conditions (ie seal broken)Buying Group employees can steal packagesBuying Group can claim it never arrived and ask you to contact merchant to dispute. This adds to their bottom line profit.Buying Group can take weeks and months to pay out. BFP is notorious for this.
Also realize that almost all the employees involved in this process, are getting paid minimum or slightly above minimum wage. A package of AirPod is worth about $400-$500 and that really adds to their “income”, let alone Macbooks.
Yup there are a lot of things that can go wrong with Buying Groups, since there are lot of more parties involved than just your own closed loop system:
Also realize that almost all the employees involved in this process, are getting paid minimum or slightly above minimum wage. A package of AirPod is worth about $400-$500 and that really adds to their “income”, let alone Macbooks.
I’ve done over 250k at 2 different buying groups over the past 2-3 years and only had 1 minor issue that was corrected rather quickly by the group. If you pick the good groups then you shouldn’t have any issues really.
the problem is all the groups are good until something goes wrong and you have no recourse. at which point you’re likely floating a ton of money that you can’t recoup. you can’t trust most groups, and even the ones you can trust aren’t foolproof. any liquidity issues (and with margins this thin, liquidity issues are inevitable)? you’re dead.
if you know buying groups you know of a certain fitness supplement organization… that’s the speedrun ponzi scheme version anyways, but it illustrates the risks pretty cleanly #iykyk
Comparing buying groups to that ‘certain fitness supp org’ is not same thing really. And yes I participated in that one to a very limited extent and time. Again, the fact that myself – and many many others – have done thousands of dollars worth at some of the best buying groups is proof that it’s not as risky as you make it out to be. Most anything we do in this game is risky to a certain extent – buying groups is on the lower end of that scale. If we all based our decision making on the possibility that ‘something will go wrong’ we wouldn’t be in the game at all. Again, anything we do is up to each person to decide their own risk level and it’s your decision. But BG’s have been very successful for me for quite some time – and others as well. For me it’s replaced the WMT liquidation trips since that dried up for me (and I’m very happy to not have to go to a WMT anymore).
when everything’s humming smoothly, BGs aren’t a ponzi scheme, they aren’t MLMs…. but they’re a lot closer than people like to admit.
I agree risk threshold is very personal. You understand the risks. otoh most people vastly overestimate their risk threshold until they find themselves holding the bag and wildly overextended (again: see our friends in the fitness supplement business). something about pigs and hogs….
I guess I’m getting old and soft bc at a certain point I’d rather just get a second job or go back to school
Pretty much this – everything goes well until that one time. I already shared my experience in the comment above so i’m not going to repeat it.
If you go into BFMR’s Discord channel you will see a lot of people complaining about package lost, especially over the weekend ones that begin with tracking # TBABOS. and a lot of recent Amazon shutdown stories prior and during Prime Day.
Then don’t use BFMR. I bet if I went into any XYZ Corporation’s Discord/etc channel I’d find people complaining. And I bet half those complaining didn’t’ follow the correct procedures when ordering. I just think you’re painting an overly dark description of what can happen. On the one hand you list all these things that ‘could’ happen (but aren’t very likely at all) and then on the other hand agree that 99% of the time it works. We literally live our lives with things that work 99% of the time. As I’ve said, to each their own. Don’t use them if you don’t want to – but don’t paint this dark picture of them being ponzi schemes run by incompetent people who are just out to scam customers. The ones I, and many others, have used are not that. The ones that try that stuff don’t last long enough for anyone to know about them.
Actually, i have used almost all of them, or at least 10+ of them. BFMR wasn’t the only one that couldn’t “locate” the package. I am painting an overly dark picture because i have experienced the dark side.
With the exception of a couple bullet points that i don’t have proof on, i have experienced with most of these:
Chase is notorious for shutting down for credit cycling and using their own checking account for non business related things. AMEX does FR. Yes, i have gone through FR due to BG activities.
Amazon obviously shut me down. Best Buy put me as reseller long ago, BB will not ship any Apple product (even for personal) to my residence. Dell won’t ship to my home address unless i call. Walmart has shut down a couple of my accounts. (see below)
I don’t have proof for this because i don’t have camera footage obviously. A discord member mentioned this, citing having friends who work in Amazon warehouse and when employees steal, they find camera blind spots and steal smaller items.
Walmart ships wrong amount all the time. If you order 2x a lot of times they only ship 1x. What happened to that other 1x? Did the delivery driver take it? Did BG take it? I don’t know but it’s not there. It’s gotten so bad that 2x per order is not recommended. Several disputes later it led to Walmart shutdown. (see above).
The airpods are easily to be stolen in between the warehouse to the truck. The Airpods are small packages and easily be hidden from the cameras.
This happens all the time – see my Lazership and Ontrac comments. It’s gotten so bad that most BGs tell you not to ship overnight, because it’s then contracted to 3rd party like Shipt and not your usual UPS/Fedex. If you see the pictures that BGs share, sometimes these packages are just dropped off behind their trash chutes.
This happens quite often and most of the time it’s just returns. But it still goes into your Amazon/Walmart account history. A history of “returns” lead to account shutdowns.
I don’t have proof of this – but it is a possibility.
A couple of BGs are notorious for doing this. I have obviously stopped buying for them long ago once i found out. But you only find out from experiencing and losing it.
BFP was taking nearly 2 months to pay out. Same with MYS. BFMR pays out right away but they have receiving issues. Other big ones, some pay right away but scan slowly, some scan quickly and pay slowly.
In nowhere i said BGs are ponzi schemes. I didn’t say they are doing the same shady stuff like the supplement company, because they are not. I’m merely mentioning the issues i have experienced and i think you are painting a rather optimistic picture yourself, because all of the things i mentioned above, i encountered it on daily basis.
Noticed that i haven’t even mentioned the final straw yet? The Amazon shut down? $5k-$6k is just 3 iPad Air orders. If you think i’m painting an overly dark picture then i think you’re painting an overly optimistic picture, while the truth lies somewhere in between. Unfortunately for myself, I ended in the losing end and therefore my cautionary tales.
Since you don’t know the finances of the buying group, you run the risk of not getting paid.
Manufactured spending is no different than buying products to use in your business. Either way the intent is to make money. Since the credit card issuer gets the same interchange fee no matter what the intent of your purchase, your intent shouldn’t matter.
The reason why banks don’t like MS isn’t interchange (they don’t care). It’s the AML headache. I know you’re not money laundering, you know you’re not money laundering, even the banks know you’re not money laundering, but you’re creating an enormous headache for banks to fulfill their KYC responsibility to the regulators. They’re not going to go to bat for you when they can simply refuse your business.
cost refunds membership fees if you’re not happy with your membership.
At some point, Lucy is bound to let you kick it! Great post…good luck!
Every rewards program includes language about abuse. Every rewards program reserves the right to be arbitrary in deciding what constitutes an abuse. MS is by definition an abuse. How well your particular MS activity gets tolerated is not an endorsement of the practice. A card used for MS to get a sign up bonus and then not used is an abuse. Don’t kid yourself and say “its fine” because it is not. I am raining on the parade because this parade is highly unethical.
No one cares.
And that may be true.
He’s buying goods to resell. Literally buying consumer electronics from a retailer, selling them to a distributor, who then resells them. Is the issue you have that he ships the items directly there instead of to himself first??? Also, I don’t mean to be rude but this is a cc points/travel blog, GET WITH THE PROGRAM. That’s why people come to this site and others.
He has publicly declared his purpose is MS. Intent matters. Nothing about “the program” demands encouraging or even tolerating what is clearly an abuse. Sorry to those who like such things but MS is an abuse.
My intent is to make money reselling. I had not considered the possibility that I might earn a SUB in the process.
Why are you here Michael?
Ideas re using points/miles at great value
MS is abuse. I don’t see how buying groups are MS. You’re buying stuff from stores. It’s barely different than if you buy stuff for a relative & they pay you back.
MS isn’t abuse. It’s perfectly legal. Just like card counting is legal. Of course, neither the card issuers nor casinos are happy about being the ones who lose money rather than suckers, er, customers…
I won’t go so far as to call it unethical, but I would say that it is — on face — plainly a bad idea for 99% of people. It’s a huge amount of risk to assume at every level (retailers will ban you, card issuers will ban you, buying groups may not pay you) and float (thousands of dollars)…. for what? The points commuity is littered with countless people who have been burned by floating tens of thousands of dollars into buying groups (or ponzi schemes thinly disguised as buying groups), only to be left holding the bag. For what? Slighty accelerated churning Amex biz plat NLLs ?
For the amount of risk and float involved, I’d put it towards starting an actual small business. Put this one in the “juice is really really not worth the squeeze” category