Walmart Manufactured Spending Policy Memo: “That activity should be stopped”

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The points & miles world is abuzz with talk about a memo titled “Manufactured Spending Policy” that reportedly went out to Walmart employees.  The memo states that Walmart has decided to stop allowing manufactured spending transactions starting December 19th, 2020 (this coming Saturday).  It appears that rather than automating the process, Walmart is leaving it up to their employees to identify and stop these transactions.

The Flyertalk post shown above included a photo of the memo.  Doctor of Credit posted a similar photo here.

Memo Text

Here’s the text of the memo:

Effective: December 19, 2020

Policy

Manufactured spending or rewards points churning is the practice of using a credit or debit card that earns rewards to buy cash like products (Money Orders, Gift Cards, Bill Payment), and then using those cash like products to pay off the credit card balance or deposit them directly into their bank account. Manufactured spenders seek to do this activity because rewards earned are often greater than the fees incurred for buying the cash-like products.

This activity creates significant customer service and operational impacts for our stores due to the lengthy nature of the transactions. As a result, Walmart has decided not to allow manufactured spending transactions. If you become aware that a customer is engaging in manufactured spending transactions, that activity should be stopped.

If you think you are witnessing manufactured spending you should decline to process the transaction.

Contacts

If you have questions, please consult with your supervisor for assistance, and/or reach out to your Regional Ethics and Compliance Director

My Take

This could be an elaborate hoax, but my bet is that the memo is real.  Opportunities for manufacturing spend at Walmart have been dripping away for quite a while.  Since this policy is left to employees to enforce, it’s not really the “final nail,” but it’s certainly a huge hit.

As a general go-forward approach, those who have relied on Walmart for manufactured spending have a few options:

  1. Pay to increase spend.  There are often ways to pay bills via credit card but where you have to pay a fee.  For example, Plastiq charges 2.85% to pay bills by credit card.  This is worth doing only if you are getting a big spend bonus that more than makes up for that fee.  However, if you mainly collect rewards through big credit card welcome bonuses, it can be a great approach to doing so.
  2. Look for local opportunities.  Options for buying money orders or paying bills with debit gift cards are mostly local these days.  People have found options that work at regional chains or independent stores.  The way to find these is to experiment yourself and to try to find others in your geographical area to work with.  If you want it to last, share what you find with each other, but not with the internet.
  3. Experiment with new options.  New reloadable cards, money sending services, and bill payment services pop up all the time.  And sometimes old services add new functionality.  If you’re lucky and persistent, you may find something that does what you need.

Manufactured Spending is not illegal.  The Walmart memo indirectly confirms this by explaining that their reason for stopping it is because of the “lengthy nature of the transactions.”  If they thought it was illegal, they would have said so.  That said, manufactured spending techniques have become harder and harder to find, especially ones that are available nationwide.  When profitable techniques become well known, they inevitably get shut down.  My advice: find a tight network to share ideas and findings, then keep what you find to yourselves.

See also: Manufactured Spending Complete Guide

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DonDover

Using gift cards to purchase money orders at Walmart is now dead to me. Abruptly, several weeks ago all my neighboring Walmarts’ systems refused to accept my $200 (Meta/Staples) or $500 (Meta/giftcardmall) gift cards regardless of the amount of the m.o. I’ve tried each of them more than once over this time period asking for different amounts with no avail. For me, this MS channel is over and done.

John

Been going to my local Walmart for years to purchase MO with Visa gift card to meet credit card minimum spend. Went today and the rep said they are no longer to allow gift cards for MO. I guess he saw the card (I usually try to cover the “gift card” writing on the card with my finger when swiping). So I guess this memo is real. Ended up going to a neighborhood Walmart right after and was able to purchase MO with gift card.

ABC

Does anyone know whether $500 Visa gift cards sold at Walmart (which are issued by Green Dot) can be easily used to purchase money orders at grocery stores that sell money orders? The packaging states that the cards can be used as debit cards with PIN being the last 4 digits of the card. But I’m cautious about anything issued by Green Dot. Thx.

karma

Just went to 3 different Walmart in MA and have been going there for a long time and they all know me but today they all declined to load BB using gift card. Asked only cash and debit (No gift card). So looks like YMMV and possibly local but winter has arrived (at least for me! ). Now i have to figure out clever way to get rid of good amount of gift card stash! Any ideas?

Terry

Make estimated tax payments.

https://frequentmiler.com/pay-taxes-via-credit-card/

I also use gift cards to prepay my utility bill and to make online charitable donations.

Terry

Just curious, but how often did you go these Walmarts and how many gift cards did you swipe each time.

Greg

My local Walmarts have not allowed money order purchases using GCs for over a year now.

wise2u

will test..and provide DP…really have no new cards, just chase freedom 5X for 12k in groceries that could be maxed before the 19th…if they let you do any before then…if not I have a less expensive backup than walmart (that i will save for new spend on future cards)…i need to check my tax office and see if they take debit swipes for my overpriced property tax bill in texas and have escrow send me a check…i’ve heard of people paying tax bills with change so i imagine hey have to take any form of payment.

wise2u

I have a lot of WM and WMFM locations near me the family markets have always been reliable…and i can see their reasoning with the everpresent long line at the superstores. The last superstore location in my loop quit allowing gift cards about 4 months ago, not just hit or miss but all the desk people from supervisor on down disallowed them…the WMFM let me buy since you posted , but one of my regular cashiers warned me about the memo and said they couldnt do it in the future….the other location said nothing and processed it with no comment….my guess is they might still do it, if I wait a month or 2 and let the memo be forgotten ..I will try $500 or $1000 in the future with my backup plan of using the gift cards to pay an insurance bill….you can switch car insurance and get a check refund from your current company, same with homeowners and I have found it agood idea to shop both yearly to get the best prices…but for now it looks like WM might be YMMV and likely dead at some locations….tis a shame, but it lasted longer than BB and the mint combined.

Kim

Tried $200 swipe at WM 3 different times for MO. Declined
Then tried $100 declined.

THEsocalledfan

Meta is limited to $99/swipe.

jeff

$99 does not work either. Maybe I should have tried $98.12 plus the 88 cent fee???

[…] still have options for liquidating gift cards.  Keep in mind that as of Saturday December 19th, Walmart has a policy against manufactured spending.  This is also a good opportunity for those who want to time-shift spend.  In other words, if you […]

voyager

Hi Greg, can I get into your “tight network” ? : )

Bob

@Greg: More specifically, any suggestions on how does one find or develop a “tight” local network for this purpose?

Recon

I wonder how wmts Policy of deciding “not to allow manufacturing spending transactions” will be interpreted and implemented. Does this mean disallowing purchase of $500 VGCs with a credit card? Or perhaps disallowing purchasing of MOs or loading of BB/Serves with “debit cards”. Or perhaps disallowing MO purchases or BB/Serve loads across multiple swipes.

Note that my daughter tried to purchase a couple of wmt $500 VGCs on her Freedom card yesterday for the 4Q 5X bonus and the cashier declined her saying cash/debit only for gift cards.

THEsocalledfan

While it is a sad day if true, timing could not be better with the end Meta working…..and new tricks appearing.

Nate

new tricks? do tell, please 😉

THEsocalledfan

Greg does a great job of giving clues…..just follow them!

Kai

I second this, do tell

Rob

Yeah, they can’t be wasting the time of their money center employees, they are the most expensive employees making $0.89 an hour more than all the others because they needed to get a 4 year degree in finance before they were qualified to operate the money order printer.

[…] points churning”. The meme has been reported on FlyerTalk, Doctor of Credit and Frequent Miler. Some are saying that it could just be a hoax, but it seems to fit in with recent issues at […]

It’s not a hoax. 2 stores have told me about it today and one showed me the memo.

Gary49er

I never shopped at WM prior to starting the old Bluebird shuffle. Now I shop at WM almost every day. Too bad management doesn’t realize how much other
business/income is associated with purchasing a money order.

Kai

Gary, is BB/serve still working for you? VGC loads at the register still work for me at my local WM. It has been a few weeks since I have made a run tho. Was trying to let things simmer down a little.

JoshF

I just loaded a $500 VGC at WM yesterday with no issue. It wouldn’t work for me a month ago though.

Kai

Mc or cashier?

JoshF

Cashier

Kim

Are you loading the old Bb serve card or a newer version ? Only 1 load per day? Thanks

TravelBloggerBuzz

The end is…near…er.

@AlohaDaveKennedy: Haven’t you retired yet from the game? 🙂

[…] Looks like the end of an era at Walmart? Or is it? Update: Walmart Manufactured Spending Policy Memo: “That activity should be stopped”. […]

Harv

how can the memo say at the very bottom that it was last modified Dec. 19th which is 5 days into the future?

david

I think that’s just classic WM incompetence. People were referring to that as a smoking gun and how this is all somehow fake. Maybe… but very unlikely.

Dima

Have not heard anything personally, but local MSers I know IRL have been told about the memo by their ‘regular’ CSRs. Pretty confident that the memo is real.

David Criegel

SOPs at many companies show a revision date of when they are implemented. I wrote an SOP today with a revision date of January 1, 2021 and I don’t consider my company to be incompetent. But I realize many enjoy pointing out what they perceive to be someone else’s mistakes.

Allan

I thought the limit was capped at $49 for MOs? Has that been confirmed?

Lea

No, because there are people out there buying money orders for things other than MS and you don’t want to prevent them from buying them when needed. In my experience over half of those folks pay cash and the rest are using a bank debit card.

Recon

It is currently $99/swipe for metabank issued cards (simon, staples, office depot), but you can still do $500/swipe for non-metabank issued cards like those sold at wmt or many grocery stores.

jeff

sorry. they have “killed” the $99 swipes of Meta Bank Staples and Office Depot Cards. I tried yesterday. It was a no go. Must be hard coded in now.

Lea

I find the “lengthy nature of the transactions” statement to be amusing. It takes far longer for someone to send a WM-to-WM money transfer than it does for me to swipe 4 VGCs. And if the line is super-long I leave and come back another time.

But hopefully you’re right that they’re counting on employees to enforce vs. hard-coding in the system. That might mean we could still do this every now and then.

AlohaDaveKennedy

For those religiously employed in MS, Walmart has created a hostile work environment. People should be free to practice their chosen religion and protest any infringement upon their religious freedom.

LarryInNYC

Hah. First Church of Metabank, N.A.

rick b

Hey bud, where have you been hiding? You’re greatly missed on FT.

LarryInNYC

I agree that the stated “lengthy nature of the transactions” doesn’t sound like the real reason for not allowing the transactions. I suspect it’s the exposure to other, less savory, money-for-money transactions.

WR2

It’s actually the lengthy nature of the transactions in combination with the tiny profit margin. Other legit customers might actually be buying stuff at Walmart, MSers not so much. MSers are simply not profitable customers. You should know that if you’re profiting from a zero(or really negative) value add transaction, somebody is losing a lot of money, so maybe don’t act so indignant.

LarryInNYC

It’s not the seller of the money order that’s losing money. They’re not making much, but that’s because of their pricing on the service. If they priced as a percentage, or a step function based on the amount of the MO they could make whatever they wanted. I’m not an MS-er myself, but I bet there are plenty of cases in which people would happily pay a half percent, or even a percent, to cash out gift cards. $0.89 may not be worth it to Walmart, but $5.00 or $10.00 for sure would be.

I’ve never understood the economics of selling money (gift cards) at 1% or less markup. I assume someone is taking a hair cut but it’s got to be the seller (if the credit card company takes more than 1%) or the credit card company (if the transaction + award costs exceed their fee).

WR2

When you factor in the cost of offering the MO service: labor, equipment, real estate, risk, etc., It is clearly a loss leader to get people in the store to buy stuff. MSers are not buying stuff, hence they are unprofitable, while offering the service to legit customers may be profitable.

[…] Walmart Manufactured Spending Policy Memo: “That activity should be stopped” […]