Posted by Chuck on November 2, 2017
Manufactured Spending

Published on November 2nd, 2017 | by Chuck

98

New USPS Memo: Gift Cards are Not Accepted to Buy Money Orders



Milesperday just posted a memo which was sent out (regionally?) indicating that prepaid gift debit cards are not a valid debit card to buy money orders at the USPS. The memo also states that it will be hard-coded soon into the registers not to accept prepaid cards for money orders. 

The memo also gives tips to the cashiers so they can recognize someone who is using a gift card:

  • If a customer has a stack of debit cards, preloaded for $500 or $250 each, and they want to buy money orders with them, they are almost certainly not linked to the customer’s account.
  • Gift cards do not normally have the chip embedded in them.
  • Gift cards do not have the customer’s name on them.
  • Gift cards will of then say so on the front of the card.


For now, it could still be possible to buy money orders at USPS depending on the cashier, but keep this in mind before you load up on gift cards, and ensure you have a backup plan.

USPS money orders are the favored method of most heavy MSers for the past year or two. This is partially due to the fact that Walmart got more difficult to deal with, not all cards work anymore at Walmart, and additionally, Amex stopped allowing MS on Bluebird/Serve cards. Another factor is that at some point in the past few years the USPS system was updated and in the process began allowing many more prepaid debit cards as payment methods than had been previously allowed.





98 Responses to New USPS Memo: Gift Cards are Not Accepted to Buy Money Orders

  1. Matthew says:

    Ugh. omg. What the hell am I supposed to do now?

  2. Justin says:

    I predicted at the beginning of 2017 that all VGC–>MO options would be dead within 2 years. Walmarts in my area have cracked down and looks like USPS is as well.

    Accepting business partners for a business that only sells VGCs and MOs…

    • Bryant says:

      I’m in on that business!

      • calwatch says:

        It wouldn’t be that profitable. I have a friend of a friend who is willing to run a few thousand of debit VGC a month in return for cash (from a business, basically converting cash sales into card sales with a net zero impact) and will charge 1.5%. The big players have signed these special deals for debit payments, but small businesses don’t have access to those.

  3. bodiddely says:

    This is horrible news. Hope that hardcoding takes a long time 🙁

  4. Audrey says:

    I thought Metabank gc were already hard coded not to work. They haven’t worked around here ((NJ) for a while now.

  5. AL says:

    I got a MO this morning and saw they had a new POS software interface. Knew that couldn’t be good

    • Jon says:

      Al, did your transaction still go through? Any problems given by the clerk?

      Also, general location?

      Appreciate the DP

      • Andrew says:

        I noticed the new software interface at my local USPS last week but was able to do a split payment for my MO as usual. I haven’t tried again since, however.

  6. Max says:

    WHAT THE FUCK.

    Seriously, FUCK USPS. They benefit from these transactions. There is no actual fraud problem (this reminds me of “voter fraud” if anything). A number of smart savvy consumers are benefiting from a service USPS provides. As a result, they can’t stand that and are trying to kill it. Does every government (or… closely tied to government) organization want nothing but inconvenience and irritation from regular people?

    It’s a combination of spite at savvy consumers and maybe pressure from banks. We are the citizens, not the banks. This sort of action is detestable.

    • WR says:

      Angry, bitter and stupid is no way to go through life.

    • Darv says:

      While I don’t MS, it has always been hard for me to imagine this on a number of levels. For one thing, it’s the mere perception of fraud or suspicious activity that they or any other supplier/merchant is trying to avoid. You aren’t committing fraud but to anybody reviewing the activity, it’s an obvious red flag, just like buying the same amount over and over on an Amex card is a red flag for their RAT.

      I personally would not be able to handle the anxiety of carrying around thousands of dollars in Visa/MC/Amex gift cards to liquidate, but that’s just me. We all have different risk tolerances. If just one of these $500 cards goes missing or doesn’t work, whether because of actual fraud by someone else, then your profit margin is gone just like that.

      But if I’m somebody in risk management at the USPS, I would ban this stuff too. It’s definitely suspicious activity and as such can give auditors the perception of fraud and it’s not something anybody there wants to manage.

      • Darv says:

        On top of this, I would never mess around with the USPS. I think it’s one thing to play games with Walmart or CVS but I wouldn’t want to make the USPS mad. I’ve read some bad stories about it and I wouldn’t want a government official at my door over…whatever.

        I used to work at a bank. If you see something suspicious, that is out of the ordinary, it is supposed to get reported, if not to the government, to a bank official. MS methods are simply not normal, and unlinked debit cards represent risk to all involved parties. If done in volume, I can understand why the USPS doesn’t want to be part of that.

        • Electroman says:

          Yes, if you mess with USPS, the people they send are Postal Inspectors. A nice-sounding name, but they can be very intimidating if they want to – and yes, they are law enforcement officers.

    • Ferris says:

      You are obviously not a “regular person”. There are certain regulations institutions dealing with money have to enforce. Don’t forget what MSers do is often what money launderers do as well, minus the legality and intent.

      The $500 VGC churning will be over before too long. After that, you’ll be able to use your Chase Freedom and Ink 5% categories (maybe) and that will be it.

  7. James B. says:

    Another clockwise turn on the spigot for consolidating GCs. This appears to take effect immediately, although some USPS terminals are not hard-coded yet.

  8. Pissed off says:

    I’m out. Nice knowing everyone

  9. Joe says:

    The Horror…

  10. calwatch says:

    Here’s the F101 document referred to, which states that pin based debit cards are allowed but never specifically calls out gift cards: https://apwu.org/sites/apwu/files/resource-files/F-101%20Field%20Accounting%20Procedures%2010-13.pdf

    I suspect that the personalized gift cards bought at giftcards.com and GCM will still work, but it will likely be similar to WM where suspicious cashiers will check for a name.

    • banananon says:

      GC.com and GCM are all Meta now… so good luck with that.

      • Anthony says:

        Are they hardcoded against Meta? I also thought they had some MCs?

        • Mimi says:

          The PO has been hardcoded for Metas for about a year(?) now but Bancorp vanillas are still working. It’ll definitely arouse suspicion now if one does split payments of $500 each, one swipe of non Meta VGC may still work as long as the cashier does not ask to see the card.

    • Aaron Myers says:

      I was just about to post this, any pin-based debit cards should work… that’s the ‘official USPS policy’

    • PSJc1eAmawCjwfbdf says:

      This is from Oct 2013. They send out updates periodically. I haven’t been able to locate a newer version (in entirety) yet though

  11. barrytuneup says:

    bought 4 k at 2 different PO this AM. Used 8 OV cards. No problem. Upstate NY. Saw new software has been installed, but still worked fine. The clerks here never ask to see any card I use. Hope this update takes forever.

    • Vic says:

      Thank for the DP.

      If I may ask, how did you know there’s new software installed?

      • barrytuneup says:

        the terminal has a different look: a small icon on bottom right, the dots when you input pin are now big stars and the screen asking to swipe card is not dark as before.

    • Abelian Grape says:

      Did you fill out the form (I’m too lazy to look up its number)?

      One thing I’ve absolutely never done is buy $3k of MO in a day from different POs to avoid filling out the form. It’s one thing to get shut down by AmEx or Chase; quite another to run afoul of the feds.

    • John says:

      What is OV card ? Thanks

  12. TomT says:

    Bummer. Even with a friendly local USPS office, I am glad I decided to switch to bank account funding as my primary means of MS, strictly for sign-up bonuses. I’ve never been interested in MS beyond that.

  13. Vic says:

    Bye bye Estella and Mary. I will miss those day when I see you everyday 🙁

  14. ZZ says:

    DP: OneVanilla by bancorp was rejected yesterday. I tried 2 different USPS in my area, all the same.

  15. Don says:

    Good. If I never hear the phrase “manufactured spending” again, it will be too soon.

    • rick b says:

      leave and don’t return, you jealous bitter a-hole

      • Don says:

        Nothing to do with being bitter and jealous. I have a fistful of credit cards and could have MS’d like crazy. The whole thing was an absurd loophole and it’s nuts it lasted so long.

        People flying first class all over the world after buying and liquidating gift cards. Loony tunes.

        • mjs says:

          Thanks for clarifying you’re not bitter and jealous. Just bitter, jealous, and too lazy or self-hating to do it yourself.

        • AlwaysFlying says:

          Well I frequently fly economy and on occasion business on very long hauls. Most of my points come from CC sign ups and work purchases. Those first class flights are either memories or sales pitches of credit card selling blogs 😉

        • Mser says:

          Well, as a MSer, I thought it was nuts too. But it’s legal, the banks didn’t object and willingly gave tens of millions of points and substantial cashback. It’s beyond laughable that banks incentivised sales and not profits, but that’s how their bonus pay/options were set up by their Boards. It was the more the merrier and who cares about shareholders? Who are we to criticize their decisions? Or worse yet, be stupid enough to fail to accept their largesse? About time some clued-in consumers were able to loss center. I get as much pleasure knowing I’m a huge loss center to some bank as I get from travel. 😉

  16. zap says:

    Just got a 1K MO with 500 oneVanilla VGC + 500 MCGC from the Safeway promo 30 mins ago.

  17. TheMonkeyTech says:

    Which ahole blogger went on a tv show and demonstrated the VGC-MO process? I blame that guy, we need to lynch him.

    • David says:

      Wait…what? Where did you see this. It was a Webex right not an actual TV show.

      • TheMonkeyTech says:

        It was television for sure, I’m trying to remember what the program was called.

        Webex is pointchaser, its an okay website but I don’t think the following is large enough to draw much attention.

        After they closed the Venmo/AGC loophole, that hurt hard. This is just as bad since the closest walmart is over 30 miles away for me.

        • Jags says:

          It was Richard Quest on CNN International. They did a friggin’ circle diagram “CC -> VGC -> MO -> Bank Account -> CC bill”

  18. Justin says:

    I honestly think there is very little fraud in the giftcard to money order transaction because there should be a pretty clear paper trail from the fraudulent purchase to the deposit of the money order.

    Therefore, I think it is simply a matter of the giftcard issuing banks losing money on the cards if they aren’t profiting from interchange fees from credit card transactions.

    Then, the banks put pressure on the money order retailers using “fraud” as the reason they shouldn’t accept them.

    • TheMonkeyTech says:

      That makes a lot of sense actually!

      We churners have been taking blow after blow in the last 2 years…

    • The fraud doesn’t occur in the GC->MO step of the process, but rather the Stolen CC->VGC step. GC->MO is just a great way to turn the proceeds of fraud into cash, but GC->MO isn’t fraudulent in itself.

      • Justin says:

        What I mean is that they should know which giftcards were purchased with the stolen credit card and then which money orders were purchased with the giftcards. Now, they just have to find where those particulat money orders are deposited or cashed to find the perpetrator.

        This seems like too easy of a way to get caught to actually work for fraud.

  19. RightNYer says:

    I agree with the others who say fraud is just a smokescreen. The real issue is that the gift card sellers lose money if they are used to purchase money orders. As it is, they get 2% if used for spending, but only $.19 (I believe) if used in a PIN based debit transaction. Let’s use the below numbers as an example. If a grocery store can sell a $500 card for $505.95, and assuming they’re paying $10 in fees, that must mean that the grocery store is only paying $490 (at most) for it to be worthwhile. The issuer is getting the $5.95 activation fee + $10 in fees when spent, so the issuer is making a $5.95 profit. If the Issuer is only getting the $.19, they’re losing at least $4 per card. I suspect that they put pressure on Walmart and USPS. If anything, using cash to buy money orders would be more indicative of money laundering.

    • WR says:

      Yeah right, it’s “Big GC” pulling the strings behind the scene! Right.

      • RightNYer says:

        “Big GC” represents large national banking associations. If you don’t think they have sway in the government, you’re deluding yourself.

        • calwatch says:

          I tend to think it is the USPS which is now seeing increased volume in MO sales. Prior to MS the last time I bought a USPS MO was for eBay purchases in the pre-Paypal era. The MO fees are fine for smaller dollar amounts but may not be sufficient when people are doing $1000 ones.

  20. Rena says:

    I went to USPS 5 minutes ago, and was able to buy a $500 MO with OVGC.

    However my sunrise VGC (with pin) was declined – not sure if this is new, this was the first time I tried to use a non-OVGC.

  21. Daniel says:

    I noticed new POS UI yesterday. But didn’t realize this could be the signal of a huge event like this. The POS actually got another update since May, if you know what I mean.

    Now the real problem is how they interpret the word “soon”. If there is a clear timeline, at least we can act accordingly. Essentially, this “soon” word sounds like “immediately” to me, cause you never know when it will come.

  22. MarcoPolo says:

    Looks like RAT got the people again this time.
    There was a time when people used to get the RAT.
    This marks the beginning of the end of human race as we know it 🙂

  23. Ryan says:

    This is why I moved on from MS to reselling a year long ago. MS is too much work for too little benefit. At least with reselling while there is more risk and work, much larger profits.

  24. Superchurn says:

    well this is damned disappointing

  25. Mike says:

    If it is what it seems it might be, it’s bad. Very bad. And it won’t bring much joy to Ink Cash users. On the other hand, the memo carries a Visa card and I’ve been using MasterCards at USPS for the past year or so.

  26. Nick says:

    I don’t MS, but other than Square (which can run amok of their rules), MOs seem to be the best way to cash out these pesky rebate cards. You can buy store gift cards with them usually, but sometimes you just want the cash (especially if the card has hundreds of dollars on it and you don’t want to tie it up with one store).

  27. mny says:

    wow, bad news for sure.
    what these companies are going to realize soon though is that they may have killed off the churning of gift cards but their volumes are going to plunge. Then they’ll have to evaluate why they are even in the business. Who in their right mind on a regular basis buys a prepaid vgc/mc and pays over face value to do so ?? MS’ers help spread the cost of that business model, even though we might be loss leaders. Same exact thing as Staples selling copy paper at $0 after rebate, we help them justify truckload buys vs. smaller buys with higher wholesale prices.
    They might help kill off unprofitable sales but all those rack keepers who restock the gift cards aren’t going to have much to do either.
    Similar to ebay/PP not accepting ebay gift cards for gift cards / precious metals, I’m guessing ebay volumes have gone down dramatically. And now to get buyers interested, they offer their sellers huge concessions in precious metals that must be cutting into ebay profitability.
    As for the poster above who dislikes MS, not sure why that is to be honest. If many areas of MS dry up, it is going to make a lot of other areas less attractive to do business in as well imo, that includes all the travel deals, along with signup bonuses.

    Not a great way to start off the big gift card season 🙁

  28. Gerald says:

    My local post offices in the NYC area have disallowed gift cards for MO purchases for quite a while.

  29. Matthew says:

    It wouldn’t surprise me if USPS is cracking down bc of real money laundering. After all, gift cards can be purchased with cash, that can’t be traced, and theoretically, money orders could be treated slightly different than cash deposits since it’s a pseudo-check. It only takes a call from the FBI to ruin it for the rest of us buying MO legally.

    • MSer says:

      In last 5 years of MS, only once saw someone buying gcs with cash – and was $100s for Xmas gifts. I’d be surprised if all sorts of alarm bells weren’t going off if someone was buying $500 gcs in volume with cash like we do with ccs.

      This is likely coming from some useless minions in the bowels of laughably misnamed Homeland Security trying to justify their existence and deciding it’s money laundering in support of IS IS or some such hysterical nonsense.

    • RightNYer says:

      Why would you do that? You would just buy the money order directly with cash. No reason to have the Visa middle man.

      • Matthew says:

        Good point! Maybe less suspicion with debit? More likely some bad eggs are buying VGC with stolen CC actually. Or maybe it’s a simpler answer of USPS isn’t making money on MOs with VGC, especially when they’re doing 5x $200 VISA cards per MO. I think they pay a merchant fee per swipe. With one card, they make some money, but 5 over a $1.60 fee is probably unprofitable. At least with Walmart, they have a long-standing tradition of offering one-stop shopping, so if they’re losing a little bit of money on MO, they probably don’t care as much as they hope to sell other goods for the convenience of having everything. I admit that I often just do my shopping there when I need a few things and have MO to buy.

  30. Mimi says:

    This hurts the same way for a lot of MSers as the first wave of Redbird followed months later by BB/Serve mass shutdown:(

  31. reuvenhunt says:

    When one door opens, another opens.
    Here’s my MSing history.
    First I found Amazon Payments. I MSed $1k/month.
    Then I found Red Card. I MSed $5k/month but only got 1x.
    Then I found Serve. I MSed $5k/month but mostly on 5x categories.
    Then I found MO’s. I upped my MSing to $10-20k/month.
    Here’s to brighter futures!

  32. kupalzky1 says:

    this is how USPS lose any businesses from us MSer, if they are only smart charge double and you will make money.

    did MO today I noticed something new in their card reader. but didnt really pay attention. $2k MO – in NYC

  33. Bill says:

    I see the new icon for secured in the lower right corner of the card machine; that was new for today.

    Thankfullt I was able to cash out my last 2k of vanilla.

  34. RightNYer says:

    I thought most people who MS still use Walmart to get MOs. Why are more people using the PO?

    • Kupalzky1 says:

      No walmart in nyc lol

    • Al says:

      WM cut back to 2 swipes from 4. PO didn’t accept my Metabank VGCs.

      • Mimi says:

        The midwest WM I went to still took 4 swipes this morning so it must be YMMV and not hardcoded. Once it’s hardcoded to their system, it’ll be enforced in all regions.

    • Mimi says:

      you’ll be surprised how many people have turned to the PO since a lot of “birds” died. Either they have no WM, MS unfriendly WM, grocery stores in their area accept only cash for MO or USPS is their only option to buy MOs. I guess the sudden surge in MO purchases by the thousands may have triggered this policy. On FT, there are those saying they buy $10K of MOs on a daily basis because they can; I am not surprised the postmaster general finally took notice.

    • TheMonkeyTech says:

      No Walmart within a 40 minute drive of San Francisco. And the one Walmart in Palo Alto that is a 45 minute drive away – the money order system is always “down”.

  35. Time Traveling says:

    In other news: Forget your checked luggage. Finnair is weighing passengers…

    https://cnbc.com/2017/11/02/forget-your-checked-luggage-this-airline-is-weighing-passengers.html

  36. Don says:

    Until it is hard coded for a $50 investment off eby you could always start cloning the gift cards to a bank issued Debit card with your name on it. I am not sure on the legalities but if you own both cards I don’t see how it could be an issue. Most of us probably have a stack of old cards from the accounts we have churned.

  37. Chaser123 says:

    Hopefull the lines get shorter now at the post office.

  38. NBG says:

    I can see why USPS would do this. If they see a spike in MO using GC’s, that is just a matter of time to have some news outlet reporting along the lines of saying ‘US Govt encourages money laundering’ (even though it is not for those with MS intent). The money they earn with the fees vs the bad publicity/headache isn’t worthwhile for a govt agency. I might be wrong, but that is just my thought about this.

    On a lighter note: All MS/churners should unite and form a legal company and accept members for a annual fee (to pay for the existence) and allow legal MS and penalize member folks for not churning (have a anti-RAT team) :).. At the end, all loop-holes will dry up and we will be left with nothing (imagine Mad Max:Fury Road with MS folks).

  39. Prem says:

    Just went to 2 PO’s and was able to do MO’s without any issue……touchwood

    Guess Make merry while the Sun Shines as we’ll know it is going to eclipse SOON😡

  40. kirk says:

    i just did greendot like 5 minutes ago and the clerk was business as usual. didn’t even look when i was swiping.

    498 mo + 1.20 fee = 499.20 + 0.80 *amazon reload
    round number with no cents makes me feel ‘safer’. :p

  41. Maifriend says:

    Went to PO at 4pm PST in San Jose, CA. Unloaded 4 VGC, no issue.

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