Yesterday, I wrote about my $82,000 manufactured spending challenge and how I ventured away from my original plan by cashing out American Express gift cards via Google Wallet. I’ve gotten some emails from folks with questions about this and since there was so much interest in this topic, I decided to address it and explain some possible pitfalls of using this service.
Google Wallet is similar to Amazon Payments: You use the service to send money to other Google Wallet users. A while back, Google Wallet was free to use. You could send money via credit cards and there would be no charge. The gravy train came to an end, and Google soon tacked on a 2.9% fee for credit card transactions. It’s obviously not ideal to use Google Wallet to manufacture spend directly with your credit card, since 3% is an insane premium to pay for the 1 point per $1 earned on most credit cards.
However, Google Wallet can be a cheap, easy way to unload your American Express gift cards without so much hassle. I would only do this only under two circumstances:
1. If you’re trying to meet credit card spending requirements. Some folks have recently reported issues trying to load Amex for Target with American Express gift cards. If you’re in this bucket or you simply don’t have the time for multiple trips to Target, Google Wallet is a good alternative.
2. If you’re earning at least 2.5% cash back. If you’re simply generating points via manufactured spending, using Google Wallet makes sense as long as you are earning at least 2.5% cash back from a shopping portal to off-set the 2.9% transaction fee.
The key here is making sure that you’re off-setting as much of the 2.9% fee as possible. Yes, you’re foregoing any cash profits generated from Amex gift cards purchased via shopping portals, but you’re also saving time and hassle by doing this. If you’re going this route, it’s important that you keep the following in mind:
Google Wallet imposes a limit of $10,000 per transaction/$50,000 per five day period. You can also add money to your own Google Wallet account, up to $500 per 30 days. These funds can then be cashed out via money transfer.
While these are the limits imposed by Google Wallet, don’t go nuts. Yes, I could well meet my $82k in spending requirements this way but that would be idiotic and probably get me in trouble – especially since you are asked for your SSN and your transactions are tracked just like those $3k+ money order purchases at Walmart. So go easy and don’t send more than $4,000 per month combined. Why $4,000? It’s just an arbitrary number I made up that I use as a limit per manufactured spending source, per person.
In my experience, transferring funds to another person is pretty much instant. Transferring the funds to your bank account takes about 2-3 days. Keep this in mind if you need to make a credit card payment using the funds on your American Express gift card.
Not all gift cards can be unloaded
I’ve been able to successfully use Amex gift cards purchased from the Amex website to send money via Google Wallet. In my experience, you need to leave at least $0.01 on the card in order for the transaction to go through. However, not all Amex gift cards can be unloaded this way.
A while back I ordered a Simon Mall gift card online as a last push to meet a spending requirement and instead of the Visa gift card, I received an Amex. I tried unloading this card via Google Wallet and even leaving $20 on the card didn’t work. The transaction simply wouldn’t go through. This is worth noting if you have any Amex gift cards that weren’t purchased directly from American Express.
It’s important to note that Google Wallet shouldn’t be a primary manufactured spending tool, but rather as a back-up for unloading Amex gift cards conveniently. The cheapest option is still to buy Amex gift cards via shopping portals and then cash out via Amex for Target. If you’re left holding a few thousand dollars in Amex gift cards after Target cashiers repeatedly turned you away, Google Wallet is one way to cash out. So don’t abuse this tool because it will get you in trouble and the last thing you want to do is piss off Google or end up under investigation for money laundering because you cashed out way too many gift cards.
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