The credit card company doesn't lose money. They charge a settlement fee to the government, which more than covers the cost of the rewards program. So only the government (ie, the taxpayers) lose out here.
The taxpayers also don't lose out because the mint makes the coins and mails them and pays the credit card settlement fee for less than the face value of the coins.
Nobody loses, except people who object to the subtle inflation by seigniorage. The Federal Reserve can control that anyway.
Re:The frequent fliers who flew too much
by sachitgupta on Sunday May 06, 2012 @07:41PM
(#3936841)
You can also use it to get frequent flier miles - a lot of cards offer 50,000+ miles on reaching a certain minimum purchase.
Here's someone who bought $15,000 in coins: http://advancedriskology.com/the-day-i-bought-15000/
$15k is pretty small. I think there are some members of Flyertalk.com who managed to churn far more than that during the programs run.
Re:The frequent fliers who flew too much
by pavel_lishin on Monday May 07, 2012 @12:34PM
(#3939708)
Why is the transaction bogus?
That "hack" has the nasty characteristic of probably making everybody lose, maybe more than the $200 the guy was getting.
I imagine shipping was not free for the government, which also probably paid the credit card operator a fee. The credit card operator is losing money by paying rewards on a bogus transaction.