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V14 2011 INDEX       E-SYLUM ARCHIVE

The E-Sylum: Volume 14, Number 29, July 17, 2011, Article 19

TURNING DOLLAR COINS INTO FREE TRAVEL

This week National Public Radio aired another story about the U'S' government's dollar coins program. Arthur Shippee forwarded this story. It's not a new phenomenon, but clearly a loophole still being exploited. -Editor

frequent-flyer-coin 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.

"We've used them to go on trips around the world," says Jane Liaw, a 35-year-old public health researcher and science writer in San Francisco. Liaw says she and her husband, who use a variety of tricks for earning miles, are planning trips to Greece and Turkey, "all on miles and points."

Liaw says she spends some of the coins at the local farmer's market and stores.

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.

As long as the dollar coin scheme is viable without a crackdown by credit card issuers, for example there will be enthusiasts like Ben Schlappig, who writes the travel hacker blog One Mile At A Time.

"I'm not as heavy a hitter as other people, I guess," Schlappig says. "I've ordered probably, maybe 30 or 40,000 worth."

Schlappig, who says he has "a few million miles" and top-tier status with several airlines, orders at the Mint's limit.

"Just last week I came back from a trip from Australia and Singapore and Malaysia all in first class, just on miles," he says, "partly thanks to the dollar coin program."

To read the complete article, see: How Frequent Fliers Exploit A Government Program To Get Free Trips (www.npr.org/blogs/money/2011/07/13/137795995/how-frequent-fliers
-exploit-a-government-program-to-get-free-trips)

Wayne Homren, Editor

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