a close up of a credit card reader
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With secret message groups and tricks of the trade to churn out millions of points, without actually spending any real money, manufactured spending is an endlessly fascinating topic.

For the points and miles obsessed, it’s gone from hobby to fanatical obsession over recent years, as innovative new products were manipulated into becoming tools to amass enough points to charter a jet, no matter how limited the income.

For years, banks and merchants turned a blind eye, but the recent Amex move to shut down many abusive manufactured spenders appears to have created a ripple effect, with Walmart now forbidding the practice, and tasking employees with stopping it.

a close up of a credit card reader

Manufactured Spending: TL;DR

Manufactured spending is a dark art form. It involves exploiting opportunities to earn often thousands of points per day, without actually incurring any expenses, using a credit card to pay for something that can then be converted back into cash, to pay the original bill. Much more on the subject here.

Many of the most extreme hobbyists would argue manufactured spending isn’t outright illegal, but even then, it flies in the face of “fair use” terms and conditions set out by credit cards and payment solutions.

Plus, the only people in normal terms to wash or obscure money this way, are typically involved in criminal enterprises from drug gangs to funding terrorism. No matter how you slice it, John and Jane Smith just don’t typically go to such great lengths like placing money orders to random gas station parking lots to hamster wheel their funds, so be it illegal or not, it raises red flags galore.

Particularly, at credit card companies tasked with credit card fraud prevention, which costs the industry over $11billion annually. No credit card issuer wants to be the one the bad guys on the news used.

Walmart Starts Manufactured Spending Shutdown

Walmart has been a central player in the manufactured spending game, as a place where people would frequently create money orders, thus starting the hamster wheel of funding the money order directly or indirectly with a credit card which would earn points, and then paying off the credit card bill with the money order.

There were many ways Walmart was regularly exploited by manufactured spenders, willingly, or not, in recent years.

But according to an internal Walmart memo leaked to Flyertalk, and discussed on Frequent Miler, Walmart has now tasked employees with stomping out manufactured spending practices, and to deny transactions they suspect are engaged in such activity, from December 19th, 2020 forward.

The subsequent discussion on Flyertalk is a reminder of just how far people are/were willing to go for points, and how far methods were taken.

Questions remain whether the protocols will be “hard coded” into Walmart payment systems to prevent the most common avenues from being used, and if they’re not, it’s unlikely that a front line employee would regularly be on the case enough to stop what can be a fascinatingly devilish and clever practice.

Gilbert Ott

Gilbert Ott is an ever curious traveler and one of the world's leading travel experts. His adventures take him all over the globe, often spanning over 200,000 miles a year and his travel exploits are regularly...

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