How Frequent Fliers Exploit A Government Program : Planet Money Travel enthusiasts buy thousands of coins with credit cards that award frequent-flier miles for purchases. The government picks up the tab for shipping.
NPR logo

How Frequent Fliers Exploit A Government Program To Get Free Trips

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
How Frequent Fliers Exploit A Government Program To Get Free Trips

How Frequent Fliers Exploit A Government Program To Get Free Trips

  • Download
  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript


And we have a follow up story now based on our recent report about how a billion $1 coins are sitting unused in government vaults. There appeared to be a bright spot in that story. The mint was managing to unload some of the dollar coins through a program that ships them to people through the mail.

Turns out many of those coins are not getting to into the world either. Some people have been ordering the coins in a clever scheme to rack up frequent flyer miles. They use their credit cards to buy the coins and then deposit the coins unused at a bank. Robert Benincasa with our investigative team and David Kestenbaum with Planet Money have the story.

DAVID KESTENBAUM: The U.S. Mint first figured out something funny was going on and tried to fix things back in 2008.�

ROBERT BENINCASA: The Mints mail order program was intended to help get the coins out to collectors and small businesses. The mint even offered free shipping in neat little boxes.�

KESTENBAUM: But Tom Jurkowsky, a spokesman for the Mint, said the mint started getting these strange reports from banks.

Mr. TOM JURKOWSKY (Spokesman, U.S. Mint): Dollar coins were being returned for deposit unopened. And still in their United States mint boxes.

BENINCASA: A handful of people were mail ordering an enormous number of coins. Why? It was a way of getting free frequent flyer miles.

KESTENBAUM: People would order the coins on a credit card that awarded frequent flyer miles for every dollar spent. When the coins arrived in the mail, they could just take the coins to the bank, deposit them and use that money to pay off the credit card.

BENINCASA: Bingo, lots of free frequent flyer miles and free champagne in first class.

Mr. JURKOWSKY: There were some that were ordering, you know, 600,000, 700,000 coins.

KESTENBAUM: Wow, thats a lot to carry to the bank.

(Soundbite of laughter)

Mr. JURKOWSKY: That is a lot of coins. Do we feel a little bit violated? Yes, and thats why we aggressively sought measures to eliminate what we called an abuse. Its an abuse of the system. Its not right.

KESTENBAUM: The Mint sent letters to the top abusers who were also it turns out its top customers. And the Mint put limits on how many coins individuals could order. No more than 1,000 coins per order. And no more than one order every 10 days.

BENINCASA: The number of coins ordered from the Mint has declined. But our reporting suggests many people are still ordering the coins to get frequent flyer miles.

Meet Tim Brooks, an aerospace engineer in California.

Mr. TIM BROOKS (Aerospace Engineer): I have ordered two orders; one for $500 and one for $750.

KESTENBAUM: And Jane Liaw, a health researcher at Berkeley.

Ms. JANE LIAW (Health Researcher, UC Berkeley): My husband and I are travel hackers.

KESTENBAUM: When was the last time you did this?

Ms. LIAW: Oh just a few weeks ago. So thats why we still have a bunch of coins sitting in our living room.

BENINCASA: And Ben Shlappig, who writes a travel blog called One Mile at a Time.

Mr. BEN SHLAPPIG (Blogger, One Mile at a Time): Im not as heavy of a hitter as other people. I guess Ive ordered probably maybe 30 or $40,000 worth.

KESTENBAUM: 30 or $40,000 worth of dollar coins


KESTENBAUM: Ben Shlappig says he orders as many as he can. A thousand coins, pretty much every 10 days.

Mr. SCHLAPPIG: Just last week I came back from Australia and Singapore and Malaysia, all in first class just on miles. Partly thanks to the, you know, dollar coin program.

BENINCASA: All these people told us they try to spend the coins, to put them into circulation. But if they cant, they deposit the rest at a bank.

KESTENBAUM: And even if they do spend them all, if the people they give the coins to dont want the coins, the coins are likely to end up at a bank and eventually in a government vault.

BENINCASA: The Mint says it has sent 284 million $1 coins through the mail order program. Its hard to know how many are going to travel hackers. But it could be a sizable fraction.

KESTENBAUM: A survey done by the Federal Reserve, and provided to NPR, looked at the types of dollar coins piling up in its vaults. The survey found that for Native American/Sacagawea dollar coins, which are only available through mail order, 60 percent of those end up in vaults - 60 percent.

BENINCASA: And one travel website, Flyer Talk, has over 15,000 posts on ordering coins from the Mint.

KESTENBAUM: The Fed just released its annual report to Congress on dollar coins. The report says there are now 1.2 billion dollar coins sitting in government vaults.

BENINCASA: Both the Fed and the Mint are calling on Congress to change the law, so they wont be required to mint more coins than the economy needs.

KESTENBAUM: So far, no one in Congress has taken up the issue.

Im David Kestenbaum

BENINCASA: And Im Robert Benincasa, NPR News.


Copyright © 2011 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.