Re-visiting the US Mint Direct Ship Coin Program


UPDATE:  The US Mint announced today (7/22/11) they are ending the program.  Blame NPR.


Many readers will recall I stopped participating in the gaming of the US Mint Direct Ship Program for credit card rewards on ethical grounds.  Basically, I used to buy about $2k worth of $1 coins each month on my Schwab 2% credit card (earning $40 in rewards) and directly depositing the vast majority of the coins.  Then, I'd pay the card off using the money I had deposited.  There's more detail on the process in this post (Money Laundering for the US Government), but it's relatively simple.  I stopped in May of 2010 once I became aware of the following disclaimer on the US Mint website:

The intended purpose of the Circulating $1 Coin Direct Ship Program is to make $1 coins readily available to the public, at no additional cost, so they can be easily introduced into circulation—particularly by using them for retail transactions, vending, and mass transit.  Increased circulation of $1 coins saves the Nation money.  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.

So, doing this appears to be in direct violation of the spirit of the message above.  However, take a moment to read and digest this article from NPR ($1 Billion That Nobody Wants).  I don't know about you, but I found the article infuriating with regards to the waste and disgraceful legislation around it.  These coins aren't really getting circulated.  There's a massive backlog.  The reality is if I'm spending/circulating 1 roll of the $1 coins for every $2k I'm buying, that's still better than having them sit in Federal Reserve vaults.  With a problem this large, they should be thanking me for the minor role I'm willing to play in their circulation problem.  

So, I'm back in the game.  And yes, I'm violating the spirit of the terms by only circulating some coins, but at least I'm doing something.

PS If your mortgage is with a local bank, this is a great way to make your mortgage payments ostensibly by credit card.

PPS  Dear Federal Government, if you ever want $1 coins to start circulating, you'll have to phase out the $1 bill.


Posted in Credit Cards, Ethics, Hustler Tagged with: , ,
  • jef

    just noticed under the frequently asked quesitons on the mint's site – they are claiming " The purchase of $1 coins under the Circulating $1 Coin Direct Ship Program is a cash equivalent or cash-like transaction. Ordinarily, such purchases are not elegible for credit card rewards, cash-back, cash rebate, and similar programs. Check with your card issuer for its terms and conditions. "
        seems like they are now saying you can't get the 2% or miles back on your credit card and if really like a cash advance, the interest charges start immediately as charged?
    what have you seen on your latest purchase?

    • Jef,

      My latest purchase has not gone through yet, but I think that’s a scare tactic. I’ve never had it treated that way before, and the credit card issuers are not incentivized to do this since it would cease all the transactions that they’re currently getting fees from. Of course, if it shows up that way, I’ll come back and update accordingly. It’s important to note that every card policy may be different.

      If anyone reading this is familiar with cards that do treat as a cash advance, please comment so we all know to avoid them!

  • Mark

    Read the fine print of your credit card agreement.  Mine (american express) specifically mentions that cash equivalent purchases are excluded from rewards.  If there's nothing specific in your agreement I'd start with a test purchase and see if the rewards go through before going hog wild.  🙂

  • I'd love to know how this works out for you–I'm thinking about trying this myself, but my CC terms say cash-equivalent purchases don't earn rewards…boo!

    • I’ll be happy to report back. I’ve got $1k sitting on my desk right now 🙂

  • Coins deposited.  This is near the beginning of the cycle for the card I used so it's going to be a while before I can confirm that the coins are eligible for the reward.

  • Chas

    Slug:  I was looking at the US Mint Website and see that there's a $4.95 shipping fee even for the Circulating $1 Coin Direct Ship Program. Were you charged shipping? 

    Just curious as everyone seems to be all "ga-ga" over getting something "for free". While $4.95 is a little under 1 cent per coin…it doesn't make it free.

    Thanks in advance 

    • Chas,

      This is commonly brought up. Once you advance to the checkout, the shipping costs are removed. There are NO shipping costs through the $1 coin Direct Ship program. It is FREE shipping.

      Thanks for the opportunity to clarify this!