Tuesday, September 27, 2016
A Guest Post by John @laptoptravel
A lot of frequent flyers who are deeper into what many call ‘the hobby’ look for techniques and strategies to lower their cost of travel. Following RenésPoints blog, many of you are kept aware of strategies for flying cheaply to get great trips for less money or to get qualifying miles for status.
One of my strategies is to use methods to achieve elite status with hotels much like many do with airlines. Often, this requires a certain number of nights or stays in a year to reach a certain level. Obviously, doing this at the least out-of-pocket expense is the goal.
Over the past two years I have noticed a trend of discounted gift cards being available for purchase online; many of these through gift card resellers such as Raise, GiftCard Zen and a few others. EBay also offered a slew of options on a regular basis.
As a Hyatt Diamond member, I regularly spend 25+ nights per year in one of their properties. Platinum status can be earned by simply holding the Chase Hyatt credit card. Diamond status can be achieved by either staying a minimum of 50 nights or 25 stays each year. The advantage of Diamond status comes with four annual Diamond Suite Upgrades that are confirmed at the time of booking (for stays up to seven nights) plus free club or lounge access. Additionally, a daily breakfast benefit is given to these top status members.
Which brings me to the point of this post; all strategies come with some form of risk. In my case, a hazard to earning status came at the hands of online criminals.
Over the course of the last eighteen months I would say I have bought more than a dozen hotel gift cards, all discounted and many for Hyatt Hotels. Using shopping portals on top of some discounted cards I have realized an average savings of about 17%. There also have been some great exceptions…and there is where we pick up this story and a warning to buyers.
The old adage “When it’s too good to be true, it is” is 99% accurate. I noticed that EBay had several Hyatt gift cards running at more than a 20% discount; some as much as 33%! In most cases, this should raise a red flag, but if you go and try to follow the seller’s history and feedback of selling you can sometimes mitigate your worries.
After some screening, I purchased a $500 Hyatt gift card for less than $400 and planned to use that as part of my re-qualification for Hyatt Diamond status this year. I had many nights booked at various Hyatts throughout the U.S.
It did not take long until everything came unraveled. I always make my reservations using my Chase Hyatt credit card (stored in my Hyatt Gold Passport profile) and then present it at check-in. At that time I advise the clerk that I will be using a Hyatt gift card to pay the final bill.
Having recently done 16 Hyatts in 16 nights earlier this year, and utilizing the same strategy I had no worries. However, at checkout the next morning I presented my Hyatt gift card (actually an e-certificate, not a physical card) and was promptly told there was no value on the certificate. With no recourse at the moment I paid the bill with my Hyatt credit card and asked for the manager’s business card.
At the next opportunity, I contacted Hyatt Concierge (via Twitter) and in a brief conversation was told that Hyatt could not check on the certificates since I had not been the primary purchaser; in fact I was a buyer from a reseller.
Having worked in law and computer science previously, I set out on a mission to learn more about my seller of this certificate. At the same time, I filed a complaint against the seller with PayPal. After all, I was out a card valued at $500 with nothing to show for it except my purchase transaction. By the way, you might want to read this article I wrote on PayPal’s changing terms and how that affects buyers of gift cards going forward.
PayPal was a little hesitant to offer any compensation initially. That just made me more diligent in tracking down my seller. Fortunately for me, this seller ran afoul of the police in a credit card scam. I was able to locate an arrest and a plea deal by the seller over the fraudulent use of legitimate credit card numbers and accounts, but placed on manufactured fraudulent credit cards; she and her brother were making or buying their own. They then used these cards to purchase legitimate gift cards and then set out to make easy money by selling them on the gift card reselling markets.
So, apparently, she was buying say a $500 gift card with no cost out of her pocket and so selling it for say $300 or $400 was quick, easy money. Problem is they ran into a clerk in a retail store who got suspicious and contacted the police. Shortly thereafter police arrived on the scene and discovered the two holding dozens of these ‘fake’ credit cards and thousands of dollars of gift cards; supposedly purchased with these credit cards.
The seller of my gift card certificate was the same woman in the picture and the story. I was able to take all of this information after speaking to an investigator and confirming with the police and court records and present that to PayPal who immediately ruled in my favor and returned my purchase cost.
Now, I was fortunate in the timing and my diligence. Otherwise, I am not sure what PayPal’s ultimate resolution to my case would have been.
It is worth noting that Hyatt has had more than its share of problems with gift cards. Just follow this FlyerTalk thread on the subject. Additionally, Hyatt had thousands of dollars of their gift cards and egift cards pulled from the reseller market this summer. Once where there were thousands in value today there are less than 30 cards/certificates on the reseller’s market.
Now this type of occurrence can happen anywhere with any type of transaction. In fact, you do not even have to be a willing participant. Take the example of Wells Fargo employees creating fake bank accounts to earn bonuses! Fraud is a major problem in this internet world. René posted an article here on the blog on how credit card thieves were using this same technique to buy iPhones. Of course, this makes a lot of things more difficult for honest folks who are just trying to save money.
My point is that purchasing certain monetary equivalents on the internet has huge risks and a buyer needs to understand that and have a course of action. Research your seller’s history; check the terms and conditions for refunds and disputes. Also, and this should go without saying; use your gift cards and certificates very soon after a purchase! Time is not your friend in this arena.
If you play it smart though, you can get some great deals and cut your travel and vacation costs.
Do you have a similar story of a transaction that went wrong? Do you trust gift cards sold online? What has been your experience? Please share your comments and questions below. – John @laptoptravel