Manufactured can be challenging, and it’s likely going to get much more difficult, and soon. Rumors are continuing to circulate about upcoming changes to Moneygram’s rules inside Walmart’s MoneyCenters across the country. Here are some rumored changes that might forever alter your manufactured spend prowess:
- Mandatory ID required for money orders over $100
- $8,000 money order limit per 30 day rolling period
- single payment source for money orders; no more multiple swipes
- acknowledgement and possibly record of what money order is for or who it’s for
- increased money order fees at some locations
These changes are rumored to start at or near November 1, and the probability of one or some of them going into effect, seem extremely likely. That’s not alot of time, especially considering some of these changes are massively detrimental. Moneygram already has a rolling 30-day $8,000 limit for bill pay, so implementing similar caps on money orders would be easy, especially if ID is captured for virtually any MO that would be sold.
The changes that Moneygram has implemented over the past year or so are a bit puzzling. I’m guessing that the vast majority of customers at Walmart buying $8,000 in money orders on a regular basis are manufactured spenders from the points and miles hobby. The question I’d have for Moneygram is why are they continuously making negative changes to Walmart’s money order program? Moneygram is a publicly traded company, and you’d think that selling more money orders would be good for business? Even though Walmart leases Moneygram’s machines for money orders, I’d guess that Moneygram makes some money from the sale of money orders, but maybe that assumption is wrong. Maybe the anti-money laundering reporting requirements are a pain for Moneygram, and manufactured spending is creating a blurred line between criminals and those just wanting travel rewards? At this point, I’m not sure the explanation matters, as the trend line for Moneygram and manufactured spend isn’t positive.
Times They Are A Changin (Already)
Yesterday I visited a local Walmart and asked for a single money order (MO) for $999.12. In that past that money order amount, together with the $0.88 fee, would produce a $1,000 money order. Since it was $1,000 or less, it would also normally avoid handing over ID that is entered into Walmart’s KYC (Know Your Customer) database, however yesterday that was not the case. That $999.12 money order triggered the Walmart cashier to ask for my ID. So some negative changes are already happening in my area.
Past these possible negative changes, there are downstream effects like people migrating to other forms of MS, overwhelming those, and bringing premature death and shutdowns to those methods. But c’est la vie (such is life). If you are doing manufactured spend, you may want to liquidate and lighten your gift card stack before November 1, as none of us know what will really happen after that date.
The Near End
There’s always an opportunity cost involved with manufactured spend. Do you prefer cash vs. travel rewards? If you prefer travel rewards, which travel rewards and why? These change would put much more pressure on those choices, as points, miles and cash back rewards would be much more difficult to acquire. Manufactured spend isn’t going to die, even if all of these penal rules are imposed. However, if all of these changes do go into effect, it will significantly hamper MS, especially for those doing higher volume.