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Pt 101287

News From The Future: Travel Hacking with Failed Government Currency

We recently reported on the the government’s failed effort to persuade Americans to use dollar coins.

But the coins have found at least one group of fans: Travel enthusiasts who buy thousands of dollar coins with credit cards that award frequent-flier miles for purchases.

Once in possession of the coins — shipped to them by the government for free — they can deposit them into their bank accounts and pay off the credit card bills. The result: a free ticket to anywhere.

The problem is that even if so-called “travel hackers” like Liaw put some of the coins in circulation, their purchases from the Mint contribute to a huge and growing buildup of one-dollar coins in Federal Reserve vaults.
 
The mountain of coins is the unintended result of a 2005 act of Congress. The law requires that more and more coins be minted, despite a lack of demand by the public.

Still better than Bit Coins…

Phillip Torrone

Editor at large – Make magazine. Creative director – Adafruit Industries, contributing editor – Popular Science. Previously: Founded – Hack-a-Day, how-to editor – Engadget, Director of product development – Fallon Worldwide, Technology Director – Braincraft.


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Comments

  1. Anonymous says:

    I routinely get $1 coins from the Portland area’s MAX light rail system. It’s kind of cool putting in a $20 bill and getting this shower of coins clattering down as change.

    I’d like to buy $100 – $200 worth of them, put handfuls of them in white
    cloth bags marked “$”, and give them out as Christmas gifts.

  2. Anonymous says:

    I routinely get $1 coins from the Portland area’s MAX light rail system. It’s kind of cool putting in a $20 bill and getting this shower of coins clattering down as change.

    I’d like to buy $100 – $200 worth of them, put handfuls of them in white
    cloth bags marked “$”, and give them out as Christmas gifts.

  3. Darryl Pearle says:

    Why don’t they just take the $1 bills out of circulation the way they did in Canada? Eventually the $1 coins would become normal.

    1. fuzzy says:

      because people would complain like never before, her the smallest bill we have is worth ~10$, less than that is coins, heavy, noisy, annoying . The mint want coins because they last forever so they are cheaper in the long run.  And I’m sure the dancers at your local “”gentlemens club” would hate it too ;)

      1. Darryl Pearle says:

        Agreed that the coins are terrible.. in Canada we have these HUGE $1 and $2 coins and they sure are annoying. I was just saying that if the US mint’s goal is to replace low denomination bills with coins, then they simply need to retire the bills from circulation – apparently the US population just won’t accept the coins given a choice. Here in Canada I haven’t seen $1 or $2 bills in years. And it isn’t because we all squealed with delight and demanded the coins over the bills; it’s because the bills went away and we had no choice.

    2. fuzzy says:

      because people would complain like never before, her the smallest bill we have is worth ~10$, less than that is coins, heavy, noisy, annoying . The mint want coins because they last forever so they are cheaper in the long run.  And I’m sure the dancers at your local “”gentlemens club” would hate it too ;)

    3. VRAndy says:

      “Save the Greenback Foundation” is the primary reason the $1s haven’t been withdrawn.

      They’re a lobby group made up of Printing and Engraving employees, determined to stop the USA from following the rest of the world in this regard.

    4. Erik McCloud says:

      Because, it’s terrible for the end users. Experiment: Put 20 $1 bills in your front pocket or wallet that you carry in your back pocket. Now do the same thing with 20 $1 coins. Heavier, louder, and more cumbersome. $1 bills are a more efficient mode of carry. The US government should just buck up and drop the $1 coin.

      1. VRAndy says:

        That’s not a useful argument. That argument works just as well for the eradication of ALL forms of  coinage.  Remember, the dollar keeps going down in value. Our parents and grandparents used coins for the unit of value that we now call a “dollar”.  ( “Back in my day a cup of coffee only cost a quarter!”)

        I would argue that the dollar’s value has reached the point where it isn’t worth putting it with my “Folding money” anymore.   All it does is clutter my every-day-carry wallet with tiny units of currency that I would rather have dumped into my stay-at-home change jar.

        I say, demote the dollar to small change, and eliminate the penny.

      2. VRAndy says:

        That’s not a useful argument. That argument works just as well for the eradication of ALL forms of  coinage.  Remember, the dollar keeps going down in value. Our parents and grandparents used coins for the unit of value that we now call a “dollar”.  ( “Back in my day a cup of coffee only cost a quarter!”)

        I would argue that the dollar’s value has reached the point where it isn’t worth putting it with my “Folding money” anymore.   All it does is clutter my every-day-carry wallet with tiny units of currency that I would rather have dumped into my stay-at-home change jar.

        I say, demote the dollar to small change, and eliminate the penny.

        1. Matt Emerson says:

          Why not make the penny from another metal?

          At current metal prices it costs $0.0085 to make the current clad Penny. It’d cost $0.003 to make aluminum pennies and for the super-cost cutting solution: $0.00003 for a steel penny. That’s $3.33 worth of currency for every cent spent on metal.

          1. VRAndy says:

            Why make it at all?

        2. Matt Emerson says:

          Why not make the penny from another metal?

          At current metal prices it costs $0.0085 to make the current clad Penny. It’d cost $0.003 to make aluminum pennies and for the super-cost cutting solution: $0.00003 for a steel penny. That’s $3.33 worth of currency for every cent spent on metal.

    5. Erik McCloud says:

      Because, it’s terrible for the end users. Experiment: Put 20 $1 bills in your front pocket or wallet that you carry in your back pocket. Now do the same thing with 20 $1 coins. Heavier, louder, and more cumbersome. $1 bills are a more efficient mode of carry. The US government should just buck up and drop the $1 coin.

  4. Anonymous says:

    Years ago, the Feds committed the same SNAFU with savings bonds: you could buy savings bonds with your credit card (and the gov’t paid the credit card fee), pocket the cash-back or airline miles, and redeem the bonds immediately.

    They just never learn, do they?

  5. Anonymous says:

    Years ago, the Feds committed the same SNAFU with savings bonds: you could buy savings bonds with your credit card (and the gov’t paid the credit card fee), pocket the cash-back or airline miles, and redeem the bonds immediately.

    They just never learn, do they?

  6. VRAndy says:

    This is news from the PAST.  Years ago, now.

    Supposedly the credit cards have finally started viewing these transactions as “Cash Advances” which are not eligible for rewards.

    The Mint has also put a limit on the number of the coins you can buy in a given time period without contacting a representative and requesting a bulk shipment.

    1. Anonymous says:

      @openid-52751:disqus the limit is only a recent development – i think this will come up over and and over again and why i thought it was pretty interesting.

  7. rybashka says:

    The point of this program is to get more dollar coins into circulation.  The Mint’s website makes clear that the intent is not to allow people to get the coins and then to immediately deposit the rolls into their bank accounts.

    Given the credit card charges and the cost for postage, each $250 worth of coins probably costs taxpayers about $20 to process and ship.  Given that each mileage point is worth less than $0.02, you would be spending $20 of taxpayer money in order to get less than $5 worth of mileage points.  We should not, in good faith, do this if we are not willing to further the goal of this program by actually spending the money.

  8. I would rather do like Canada and have $1 and even $2 coins in circulation.  With more snack machines and toll booths needing $1 or more, it gets really annoying trying to stuff a paper $1 or $5 note in the machine, and then getting the machine to even accept it.

    Although the Susan B. Anthony dollar coin looked too much like a quarter, the Sacagawea (sp?) coins are much better and preferred by me.  BTW, most banks I go to don’t even stock these coins, the best way to get them is to go to the post office.  Their stamp dispensing machines and tellers usually use these coins. 

  9. Ken says:

    I like how the USMint website recognizes this but still does it… they put a limit on your max purchases every 10 days now, but still….

    “The immediate bank deposit of $1 coins
    ordered through this program does not result in their introduction into
    circulation and, therefore, does not comply with the intended purpose of
    the program.”

    ooooooOOOO, better stop buying them! LOL

  10. Andrew Rossignol says:

    How is this better than Bitcoins?