GCM Portal Policy Change Hits Us Hard – Let’s Adapt and Overcome!
There have been multiple reports that Gift Card Mall (GCM) will limit portal rewards to the first $2k in purchases per calendar month across all portals effective June 29th. It’s safe to say all GCM enthusiasts in our hobby are negatively affected by this change. Although this change is quite a blow, we can adapt to keep our hobby lucrative. Let’s take a look at the impact of the GCM portal policy change and step through options for optimal credit card rewards.
Why the GCM Portal Policy Change Matters
As many of you know, points and miles hobbyists have greatly minimized costs by earning portal rewards with GCM Visa Gift Card (VGC) orders. Historically, each GCM account holder could earn portal rewards on up to $60k of monthly spend across all portals. With the prevailing 1% portal earning rate, that’s $600 or 60,000 Membership Rewards monthly (via Rakuten, my favorite). With the new policy, the new maximum monthly portal earning dives to $20 or 2,000 Membership Rewards. Ouch.
Further highlighting the impact, with an order of $9.5k in VGC’s, Amex Platinum for Schwab cardholders like me were able to decrease their out of pocket costs to $5.25, or a 0.055% cost via the Rakuten Membership Rewards portal. Cash portal earners made out great, as well, earning $95 in the same example. That option is gone effective June 29th.
Those active in this hobby often implement two-player mode with their spouse or partner, so that could bring earning up to $40 or 4,000 Membership Rewards under the new policy. And so far, this policy hasn’t been announced for Giftcards.com. But no matter how you slice it, this new GCM policy is a significantly negative change for all of us.
All is not lost, however. Let’s look at some alternatives to continue earning great credit card rewards at a high scale.
Option #1. Simon Malls and Outlets
Simon malls and outlets have offered $1k VGC’s for a $3.95 fee for an extended period to in-person shoppers. While the $3.95 fee has been technically advertised as a promotion, it has been extended multiple times, to the point Simon announced it has been extended indefinitely. Cost via Simon malls and outlets come out to 0.4%, much higher than GCM, but not painful. From my perspective, I can absorb the 0.4% cost; the biggest drawback to Simon is earning rewards on Amex cards isn’t an option. Beyond the 0.4% cost, consider the money/time costs involved with driving to Simon malls and outlets.
Option #2. Simon Online
I’ve previously described why buying VGC’s via Simon online wasn’t a big deal to me, primarily due to my love for GCM. GCM won out for me primarily due to the portal rewards. Given that GCM will eliminate portal rewards after $2k of spend, I can no longer hold lack of portal rewards against Simon Online. Therefore, it’s time to take another look at Simon online.
Like Simon malls and outlets, Simon online charges a $3.95 fee for each $1k VGC. Simon online orders also include a $10 processing fee. And finally come the shipping fees, which vary based on location, but we’ll assume $10 per order based on what I’ve heard others being charged. These processing and shipping fees are the same per order, whether you order a $1k VGC or ~$25k VGC’s. Therefore, in order to minimize costs, a customer would need to make a $25k order. For a $25k order, cost ends up around 0.475%. For a $10k order, most similar to my previous GCM example, cost is approximately 0.595%.
Currently, there is a free shipping promotion with Simon online orders, so that can lower cost a bit. Simon has also run other online offers, as well. While having the ability to make a $25k order is great, many of us don’t want to hold that much VGC at any one time. Just another consideration there! And, again, there is no rewards earning on Amex cards for Simon online purchases.
Option #3. Office Stores During Promotions
Hobbyists continue to earn 5% cash back (or 5 Ultimate Rewards when transferred to an eligible account) with Chase Ink Business Cash and its predecessors at office stores like Staples, Office Depot, and Office Max. Some also hold no-longer-available Amex cards that earn at similar rates. Depending on the sale and the VGC type purchased, costs are zero or go negative (a money maker in addition to credit card rewards). Even with the lesser sales and more expensive VGC types, fees end up around 1% at the most. While this costs noticeably more than other options, the 5% earn rate more than compensates for the higher fee. Additionally, until the end of September, Chase earning for holders of both the Ink Business Cash and Sapphire Reserve can turn into 7.5% cash back.
Option #4. Grocery Stores
VGC costs at grocery stores are consistently in the ~$5-$6 range for a $500 card, resulting in a 1-1.2% cost. Hobbyists make out best by using credit cards with a grocery store bonus category and, hopefully, earning fuel rewards on the purchase. Some stores offer fuel rewards on $500 VGC purchases at times, but this is very region-dependent. Others offer a periodic rebate on a $500 VGC purchase, like Kroger recently offering $2 off in my area. Again, this is very dependent on your location and can be tough to scale. From my perspective, I presume a 1-1.2% cost, and any other promos or rewards I end up receiving to minimize cost is just gravy.
What credit cards have the best grocery store bonus rates? This is one of the most-asked questions in the hobby, but it’s always worth asking given how much this hobby changes. Here are the big ones from my perspective:
Amex:
- Gold: 4x Membership Rewards, up to $25k of annual spend.
- Everyday Preferred: 4.5x Membership Rewards (with 30 transactions in a statements cycle), up to $6k of annual spend.
- Blue Cash Preferred: 6% cash back up to $6k of annual spend.
- Delta Gold: 2x miles uncapped. Currently 4x through July 31st!
- Hilton Surpass: 6x points, uncapped. Free weekend night certificate with $15k of annual spend at grocery stores. Currently 12x through July 31st!
- Hilton Aspire: Currently 12x through July 31st!
Chase:
- Freedom: 5x through June 30th (quarterly bonus category), up to $1.5k of spend.
- Sapphire Preferred: 3x Ultimate Rewards through June 30th, up to $1.5k of spend.
- Sapphire Reserve: 5x Ultimate Rewards through June 30th, up to $1.5k of spend.
Citi:
- Premier: 3x ThankYou points, uncapped.
Again, this is not an all-inclusive list of grocery store bonuses, and plenty of categories exist beyond grocery and office stores. Ensure to review your credit card portfolio and personal situation to determine which card is best for your planned redemptions.
Option #5. Giftcards.com
There hasn’t yet been any change announced to portal earning with Giftcards.com, but I wouldn’t be surprised if or when this happens. Nonetheless, portal earning up to $60k of monthly spend continues. Giftcards.com charges a higher $6.95 fee per VGC, and trackable shipping is $8.29. The biggest negative with Giftcards.com is the $2.5k order limit (including the VGC activation fees). The largest order I can make while minimizing cost is four $500 VGC’s and one $465 VGC. With Schwab cashout, my cost is 0.5%. With the same purchase, a cash portal earner’s cost is 0.75%. I’ve historically liked Giftcards.com because they accept Discover; GCM does not.
Analysis
Cash Back Fans Lose the Biggest
First, I want to reiterate that GCM hits us all hard with this negative change. From my perspective, cash back fans are taking the biggest blow. Why? Because many cash back credit cards earn flat rates for all spend; we cannot take these cards other places to earn at bonus rates to absorb higher costs. Many of us use these cash back cards (Citi Double Cash and PenFed Power Cash Rewards are just two examples) to earn solid 2% cash back with minimal cost via GCM. For instance, I earned 1.945% cash back on all of my GCM spend after the tiny cost. On June 29th, that’s gone.
Grocery Stores
Now that we are left with higher cost alternatives, focusing and prioritizing bonus spend categories, like grocery stores, is of even higher importance. And this especially applies to any bonus spend categories that are temporary (mostly grocery stores). If you highly value Ultimate Rewards, finish Sapphire Preferred, Reserve, and Freedom spending. Also, if you get great value out of Hilton and/or Delta currencies, focus spending on the Surpass/Aspire and Delta Gold. If you value other currencies with temporary categories which I did not list, ensure to include those! I’ve already maxed out my Reserve and Freedom spending; I’m putting spend on Delta Gold and a bit on Hilton Aspire, as well.
Next, focus on permanent bonus categories, like Amex Gold, Everyday Preferred, Blue Cash Preferred, and Citi Premier. Order your spend based on which currency you value the most, whether or not any of the cards I listed are included. I’ll max out the Gold and Everyday Preferred card bonus categories in addition to some Premier spending. I’ll also do a bit of Premier spending for 3x at gas stations.
Of course, if you value some of the permanent bonus categories higher than the temporary bonuses, reprioritize as appropriate.
Office Stores
Concurrent to the above two bonus situations, insert office store spending on the Chase Ink Business Cash (or other similar-bonus cards) if and when VGC promotions are held. For me, I prioritize this option over grocery store bonuses, but your situation may be different.
Simon and Giftcards.com
If you have more spend needed after that, consider Simon malls and outlets (0.4% cost) for any rewards-earning cards other than Amex. If you like the convenience of Simon online or don’t have a Simon location nearby, you can accept the higher online costs (starting at ~0.475%). For what it’s worth, I’ll be hoofing it to my local Simon outlet, but I won’t pursue online (for now). I plan to focus my cash back card spend (including Discover it Miles, Citi Double Cash, PenFed Power Cash Rewards) at my local Simon outlet. Giftcards.com is a nice, small order option, and I’ll pursue that if or when I can’t get to my local Simon outlet.
Last, but certainly not least, consider GCM ordering via your favorite portals prior to the GCM portal policy change on June 29th, particularly if you can handle holding a higher total value of VGC’s.
GCM Portal Policy Change – Conclusion
This GCM portal policy change affects many hobbyists’ spending strategies. I have read some suspicions/hopes that this change is only temporary. From my perspective, I’m planning for the worst, and I will be pleasantly surprised if GCM reverts back to the previous or similar portal limits. Taking a step back, let’s remember that this hobby is fun, lucrative, and will continue to be both on June 29th and thereafter. How have your credit card spend plans changed or not changed?
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I’m not going to cry a tear for any of these lenders. I’m sure they have high powered and intelligent folks at the table when these cards and multiplier categories are created. They should know that folks are going to manipulate the system.
They create the card and the rules yet they still cry when we find a way to win in spite of them. I’ll continue to do what I do, in moderation of course, but I have no intent on stopping.
What could have made them to make a such a decision?60,000 to 2000 is a big drop
I don’t see the $1k VGC at Simon anymore – the highest card load is $500. This means big difference on fees. At the same time, a better option is giftcards.com – still with 1% cashback for up to $60k in monthly purchases. Would be interesting to see how much it lasts, since GC is owned by GCM.
Dracula,
That’s a bummer you can’t get $1k’s at your Simon location anymore. I agree that the giftcards.com option is a bit better option for you if you are only able to get $500’s at Simon Mall.
Just curious (and not being a smart a**) – what do you do with all the gift cards? I saw someone complaint that Amex held their points award because they had over a million points one month via groceries ($83K to get there).
I don’t understand what people are doing with these purchase levels. It seems like something at least unethical or not in compliance with the rules of the cards and promotions. I’ve got the majority of my points and miles the old fashioned way (traveling for 35 years) so don’t understand why issues like this even matter.
Don’t get me wrong I run through over $150,000 a year on my cards (all my expenses in retirement) and try to maximize them but the scheme you described sounds out of line with the intent of the program.
That is why you see so much stuff get shutdown: The Sacagawea Dollar scam; the $6000 grocery limit added to Blue Cash Preferred; the shutdowns of the Redbird and Bluebird accountholders; the removal of the Walmart Moneycenter kiosks, etc. etc.
All those changes happened because a few people ran huge amounts of money through each of those, so the companies made changes to stop those people. I think your example, $83k in grocery spending, would be an obvious red flag to a credit card company. I cannot imagine trying to fake $80k of grocery purchases and thinking the credit card company would be too stupid to catch it.
This is why American Express now includes language in their card agreements that excludes “purchases of travelers checks, purchases or reloading of prepaid cards, purchases of gift cards” from earning the bonuses.
With $150k of cc spend on expenses in retirement, it sounds like you’re out of touch with most people in lots of ways.
I realize I am very blessed to have all I have and the ability to live the lifestyle I do.
I was a senior executive for 4 different national companies and am very well set. I have no debt (wrote a 7 figure check for my last house and haven’t had a car loan in 20 years) so I fully realize I’m not the average guy.
This is the age old conflict of “intent.”
The intent of credit card companies is to lure you in with huge sign up bonuses in hopes that you will accumulate debt with high interest rate so that they can make outsize profit that they otherwise couldn’t with debit card, mortgages, car loans, etc.
The intent of the individuals who do not generally have 6 figure spending is to produce an avenue where they can generate high spend on credit card and regain the money with or without a profit margin. Some may say that “manufactured spending” is unethical as you are not using the card as intended. But if you are actually using it as intent, then you wouldn’t be paying off the cc in full each month. One can also argue that credit card companies charging 20+% interest rate, especially those with poor FICO score, is unethical as they prey on those who are most financially vulnerable.
Either way, cc companies know that they will still come out ahead because of the merchant swipe fee whether an individual is paying interest or not.
The irony is that I find many in this circle eventually branch out into true small businesses like ventures such as merchandise reselling, discounted gift card sale, ticket reselling, blogging, travel vlogging, personal finance life coach, and so forth.
In summary, you can read an article like this and decide, oh it has nothing to do with me and move on.
Are you the same guy that was giving Jeff the business over at Million Mile Guy because of his Hilton spend on grocery and the points he’s earned? Telling him that you’re part of the 1% and a retired corporate executive? Just trying to make sure you’re not the same guy running around these blogs ragging on folks because they play the game different than you do.
I thought you can’t get MR pts buying GC/VGC at grocery store, am I terriblly wrong?
Ktc,
Many have been able to. If you haven’t or never tried but are interested, start slow to determine if it’s an option for you.