Assault on Twin Cities Manufactured Spend
16 May. 2018
Assault on Twin Cities Manufactured Spend

Another One Bites the Dust

Just one year ago the Twin Cities was a bit of a honey hole.  It was like a large manufactured spending (MS) fire.  Besides providing comfort and warmth, you could toss just about anything into it and end up with a positive result.  Now that raging fire is down to mostly embers, and many of those embers have burnt out altogether.

Last week I wrote about how MoneyGram is Squeezing Local Walmarts in this area.  After coming back from 2.5 weeks in Eastern Europe, the news that some of the best Walmart stores in town were not allowing more than 4 debit card swipes (or $2,000) for money orders.  Some stores did away with allowing multiple debit (gift) cards altogether.  One store in particular allowed $10k worth of MS transactions before I left for my trip, and now allows none at all.  That negative movement has kept momentum, and has now taken one of the most reliable supermarkets with it.

The Day the Music Died

Lately I’ve mixed in some MS with exercise, and yesterday I did a small MS run on my bike.  The routine of late has been to bike several miles to a local Cub Foods supermarket and liquidate $2k worth of Visa Vanilla debit (gift) cards, then bike a bit more, run 3.5 miles or so, and bike back home.  It’s been a nice routine since I’ve arrived back from my European trip just over a week ago, especially now that the weather is warm here.

There was a 16 year old that I hadn’t seen before running the service desk inside the supermarket.  We made quick small talk and proceeded into the transaction:  4 money orders for $499.21 each (or $2k total with money order fees included).  I brought 4 vanilla debit (gift) cards with me and started swiping.  The first 3 cards were accepted, and the 4th card went through just fine as well.  The kid behind the desk didn’t approve the final card though, but rather leaned forward slightly and asked to see my cards.  Why he waited until the very last card to ask about the cards is a bit late in the game, but it was the hand that was dealt.

“No problem,” I said confidently.  I’d been coming to the store for years and hadn’t been turned away once.  He looked a bit puzzled from the cards and said he needed to ask one of the managers.  I knew the manager in question.  Heck, I’d asked her out on a date before!

“Bring her over,” I asked the kid, as she’s easy on the eyes even if the news wasn’t good.

And the news wasn’t good.  She told me that on Friday the store received a memo from MoneyGram and it said that it could no longer accept non-bank debit cards for any money order transactions.  She said that if the store violated MoneyGram’s order, it could loose it’s license (to use MoneyGram’s products and services).  In the 5-7 minutes that we talked, a few other managers passed by intermittently and all were on the exact same page.  They were so in sync on the new policy that they could have completed each other’s sentences.  As a very small positive, the managers didn’t know how to cancel the cards that had been approved so 3 of my 4 money orders were approved and printed.

The Beginning of the Middle of the End

The store’s sudden demise is sad because it’s been a reliable way to unload nearly all types of manufactured spending debit (gift) cards, namely Vanillas.  In Minnesota, the Mall of America sells $500 Vanillas ($1k maximum per day) with only a $2 fee per card.  Without a supermarket to unload those cards at, the liquidity landscape for those types of cards is pretty baron.  And without a plan B, buying lots of Vanilla branded gift cards isn’t a wise move at all.

In this area, Cub Foods is odd because last year there were many, if not most, of its stores in the Twin Cities that were allowing manufactured spend.  Then a corporate letter circulated to stores and the vast majority of them dried up, not allowing multiple debit cards swipes at all.  Two (non-corporate) stores remained though, basically untouched by the bad news from corporate.  They have remained MS friendly until now.  A report about another points runner the store being turning away came in yesterday, but I thought it was a one-off, or outlier.  I don’t have confirmation yet that the other store in town is gone too, but will check into the situation there soon.  It make sense that both are toast though, and probably for good.

Who What Why

MoneyGram has made some serious moves against MS in the Twin Cities in the past year, but most notably in the past 30 days.  I think people who have been doing MS here should be very cautious in how they proceed and evaluate if they are going to MS going forward.  Getting cards for MS is easy, liquidation is the key.  If you don’t have a means to unload cards that you buy, then you’re stuck with those cards and plus the fees that you paid for them.  It’s not a good problem to have, especially when the amounts we’re talking can easily be in the thousands, not hundreds, of dollars.

Why the demise of MS and the MoneyGram crackdown has come to the Twin Cities is a bit of a mystery.  Manufactured spending has become more popular here in the past few years.  I’ve met new people doing MS at locals stores, and store workers that I’ve befriended have told me about more new faces participating in the hobby too. Frequent Traveler University (FTU) was in Minneapolis last summer too, and the manufactured spending sessions were well attended.  However, I doubt that event had much effect on the local MS scene as most of the attendees were from out of town.  One guy in a local points meet-up group used to work at MoneyGram.  One of my friends thinks he was a spy looking to subvert the manufactured landscape in the metro.  Conspiracy theories live in the points world too!  This blog may have had something to do with the local MS increase too, so I’m not immune from critique or guilt as well.  But whatever the reason, MS here went from great, to where it is at now:  thin ice.



Last year there were at least half a dozen Walmarts that allowed $10k plus in manufactured spending and a dozen or so Cub Foods that were MS friendly too.  The MS landscape here has changed dramatically and for the worse.  Minneapolis-St. Paul was a shining star in the MS world for a period of time, but it’s now on the endangered species list and the status seems to only be degrading.

If you live in the area, I’d think twice about buying cards (Vanillas) that can’t be liquidated at Walmarts.  It also might be wise to step back and consider if MS in this area is something you want to hold hands with right now.  The time, and effort to unload decent volume is going to be substantial.  For those in the area, if you continue to MS at any level, do you have a plan B or C to unload your cards if your main liquidation source dries up or changes for the worse?

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