www.CostaRicaTicas.com

OK let me try to explain this as best I can.

I have a friend who works at a gas station here during the school year. Anyways I went in today just to pass some time and pass along a Merry X-mas.

I wasnt really paying attention to anything at first, but after awhile I realized he was asking random people that were paying for gas in cash, if he could use his card instead. Now, I didnt know what he meant by card at first as I was standing to the side in an angle I couldnt see the counter.

After everyone left, I asked him to give me the details on the whole "card" thing. It turns out, when people pay in cash, and no one else is in the store he asks them if he can charge the gas to his Royal Bank AA Advantage card. He takes the cash they initially were using to pay, and just pays off the card.

At first I though, this has to be some kind of fraud, but then after thinking - its perfectly legal is it not? In turn hes been racking up insane amounts of points, just because they arent even his purchases.

Still, Im just waiting until Royal Bank notices the insane amount of activity from one location for insane amounts of money. I mean, if you were them and noticed a 19 year old was putting like 5000$+ worth the gas on his card a month, wouldnt you find it a bit weird?


Anyways, after all is said and done, is it actually legal to do what hes doing?

yes

Do you really think someone is actually monitoring his credit card?

This is all done by computer programs.

The only thing that would cause it to be "flagged" would be "unusual" activity.
Since he has already established this pattern of "spending" the program shouldn't cause it to be flagged.

Too bad he isn't using a Delta AMEX SkyMiles card. He would get DOUBLE miles for gasoline purchases.

Weird, I should try it then

VISA hates me though, they wont let me have gold cards.

Ever hear of the term 'fraud'? The dude is not purchasing actual gas for his own, just trying to find a way to beat the system.

If he gets caught, he may not be looking at jail time, but things can get awfully rough on him.

I would not do it if I were you.

This bozo is costing his employer several percent in fees per transation. It is one thing to charge all ones personal expenses for the miles, but cheaing someone else will be grounds for termination. Hope he gains his points before he loses his job!

i say do it, in fact i was thinking about doing the same thing myself. notj just with gas but all kinds of purchases... i'm sure i can get creative if it means racking up miles.

thanks for the tip.

Charge it!!

There's always someone trying to beat the system. Legal or not, I'm surprised that the Gas Station is allowing him to do this. They're the ones who have to eat the 3% (give or take) processing fee on their merchant account. They don't have to pay anything for cash transactions, but there is fee on all credit card transactions. IMHO, I don't see this scenario lasting very long. "Smoke 'em if ya got 'em" !!!

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You ALWAYS have an option ....... "NEXT" !!!

Jmacaula, I answered above and mentioned fraud. I feel strongly, no matter who says what, that this is illegal and you would be guilty of fraud. Pure and simple fraud. Cheating a company out of a gift that was not earned, or earned WITH INTENT to lie (fraud).

When I think of the legality of any matter, I always put myself in the position of a juror and having the credit card company explain to me the workings and how dollars are applied to gifts. Now you have some young man, even asking permission of the buyers if this is OK, however it is not just up to the buyers, it is up to the credit card company as they are applying gifts for dollars spent. Now if he were to call the credit card company and have them say OK, he had best get it in writing that everything is fine and dandy.

Instead of asking us guys, when it comes to something of this manner, I would seek out an attorney. The 100 bucks or so you would pay him would be better than having your new husband Bruno make you pick up the soap, in the shower, at the local county lockup.

This scheme, while most likely unethical, hardly rises to the level of criminal fraud. I would seriously doubt you could find a prosecuting attorney who would bother to take the case to court.

A more interesting scenario is does it constitute commercial fraud? Is the credit card company being fraudulently induced to give something of value without receiving something in return and therefore could they recover damages in a civil procedure?

I think everyone will agree that "rewards" programs are marketed to reward not the consumer but the credit card company. Every time you sign that credit card slip a percentage of the sale goes to the credit card company so they want you to charge not pay cash. If you accept that as valid then the credit card company has lost nothing. The young man is helping them achieve what the program was intended to accomplish.

Seems like this would make an interesting discussion to hear both sides.

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Pura Vida
Only Irish coffee provides in a single glass all four
essential food groups:
alcohol, caffeine, sugar and fat.
Alex Levine

I tend to take a conservative line............better safe than sorry.

I agree with Scott P. Although the CC company probably is getting a hard on with all the charges, the merchant is paying fees to the CC company. Why do you think at some places (even CRT sponsored discounts) you pay MORE for using a CC? It's because the merchant must pay, as Mikey-B pointed out, about 2-3% per transaction. Let's say that the employee does this to the tune of $500/day, that's up to $15/day coming out of the pocket of the station owner.

Do I think it's wrong? Yes. Do I think it's illegal? Not sure. I'm sure that it could be construed as theft. Very, very gray area here. However, depending upon how long this employee has been doing this, I'm SURE someone has noticed. Most probably the person (owner?) who does the daily reconcilliation has noticed and will put an end to it.

dapanz1

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Paradise= Sitting outside the Bodega in Panama City about 1 am. Drinking cool Balboas with cool friends and blazin' hot Colombianas. I want to be there..RIGHT NOW!

If the owner or the manager of the gas station did not notice the spike in CC sales and a corresponding dip in cash sales they are really sleeping at the switch. If they were concerned they would have halted the practice within 2 or 3 days of its inception.

_________________
Pura Vida
Only Irish coffee provides in a single glass all four
essential food groups:
alcohol, caffeine, sugar and fat.
Alex Levine

Well put Dapanz1.
As a multi-business owner, I accept credit cards for payment with 2 of my companies. I'm charged (by my CC company) 2.5% on all Visa/Mastercard transactions, and 3% on all AMEX transactions. Because my accounts are set up with "Gross Billing", all CC fees are (automatically) deducted from my business account at the end of each month, and I recieve my monthly statement regarding all CC charges.

To me, every dollar that I eat from CC charges comes out of my pocket. Yes, it's a write-off, a standard business expense, but it still sucks! My annual CC fees are between $12K - $14K. And I do this as a courtesy/convenience to my customers. (How many ZB sessions would that be) ?!?!?!?!?

No business owner likes to pay the CC fees to their merchant company. Whether it's fraud or not, I don't see it lasting very long.

Jmac, tell your friend to enjoy it while it lasts. And remember, un-employment compensation is only 2/3 of your normal pay. After he loses his job, he'd better be able to live on 2/3 of a gas-station employees' income until he finds another job.

_________________
You ALWAYS have an option ....... "NEXT" !!!

Interesting.

Ill agree with most of you here, it is a VERY grey area. It can easily be argued either way, with very strong cases.

The thing is, alot of gas purchases are done with credit cards I find, at least for "fill ups" and high amounts. So, say the gas station has 200 CC transactions a day. Do you think they would really notice if my buddy was only charging say 10 x 60$ purchases to his card? Its 600$ to him, but to the company its hardly anything.