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Comment by jsf01 | Hacker News Reader

Think about it like this. The logical conclusion of people acting like you did is that credit card issuers increase interest rates to make up for their losses. That makes life worse for everyone but the people exploiting the loophole. You’re no different from the people who exaggerate their losses to insurance companies in order to claim extra insurance money. Because of them, premiums have gone up. You might see yourself as some kind of Robinhood figure, but ultimately it’s going to be the other people participating in your network that suffer.

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Thanks for the reply. There is a clear difference between claiming extra insurance money and what I'm doing: lying to get more insurance money is fraud, while what I'm doing is exactly what the service is intended for (sending money to others for free).

But using your framework of, "if everyone did this, how would this affect the business and others using the business," then I (and many others) are doing a lot of other unethical things. Ad blocking and card counting (in blackjack) clearly would be deemed unethical under this criteria, but here's a bunch of other more tangible examples.

There's a popular pastry place that has 50% off sales on Sunday afternoon because they are closing Monday so they sell the remaining stock at a significant discount before close. I only go there on Sunday afternoons, but if everyone did that, then the prices would go up for all.

Another thing I do is using the books, video games, movies, and streaming services offered by my library and never buy any real media. But if everyone did this, then bookstores, theaters, and streaming companies would go bankrupt.

You may be following the letter of the law but not the spirit of the law.

The cashback was created as an incentive, you found a way to exploit the business model for personal gain in ways that can have an impact on others ability to enjoy the system while having a material impact on the provider of the service. Most in your position will say "but I am only a small piece of the cog" however, if a small minority starts to think the same way, it can have a real impact on a variety of things, including trust between parties.

Everyone tries to rationalize their actions, whether it is or becomes socially acceptable is another matter.

Well, everyone that takes a VC subsidized ride on Uber is also having a negative impact on their business. If the business makes rules that are unsustainable for their business, it’s their fault. They could very easily set limits to curb abuse.

Uber are obviously trying to get people to use their service. If using their service is bad for them, that's their fault because they were deliberately trying to encourage a behaviour that was detrimental to their business.

That is different from finding a way through the rules which is clearly unintended.

You don't think offering cash back is a way to get people to use their service?

Of course it is. Do you really think that they wanted to pay eighteen thousand dollars for someone to rapidly transfer money back and forth?

Hopefully they had the financial wherewithal to model outliers in their profit model.

It's not the user's responsibilty to ensure these incentives are sustainable. Look at what happened with the Hoover free flight program.

The user is the one, well, using it! Sure, in some cases it's not obvious if you're abusing the system but this seems pretty clear.

The best way I've seen businesses get around this issue is to just have an upper limit on the incentive like interest applies only to the first $x. Its often a nice bonus for people that were going to use them anyway but not enough for people to justify exploiting the incentive alone.

> while what I'm doing is exactly what the service is intended for

The service was intended to pay you significant sums to move money back and forth?

Interesting discussion. Certainly, some of this fails simply by not agreeing upon what is ethical. For instance, people can claim that blocking ads is an unethical action, but if the ads themselves are attempting illegal things (and some are), then blocking ads has a quite legitimate and useful purpose.

I’m going to preface what I’m about to write by saying yes I understand life happens and I’ve carried a balance on a credit card charging high interest at one point in my life.

- If you have a credit card with decent cash back/rewards program. The interest rate is going to be higher. If you are carrying a balance month to month. You’re doing it wrong.

- If life happens and you do end up with a balance and your credit is decent, you should be able to get a no interest for x months, no interest balance transfer.

Credit Cards aren’t a life necessity. Homeowners insurance and car insurance are. Taking advantage of the rules as they exist is not unethical. Insurance fraud is both unethical and illegal.

> The logical conclusion of people acting like you did is that credit card issuers increase interest rates to make up for their losses.

Actually no, they pay for it directly out of transaction fees levied on sellers (which are usually around 3-5%). Some of that they take for themselves, and some they use for consumer rewards. It's a great way to make a lot of money and keep consumers incentivized to use them.

Economically, it's sort of like crappy product/service things licensed to prisons (like video telephones) that charge hefty fees to the inmates and their families, and give a significant portion of those fees back to the prisons. They're taking advantage of the incentives they can provide to the decision makers (prison administrators, or consumers in the case of credit cards) to overcharge the other party (inmates, or vendors), and make a lot of money in the process.

It's very different - one of those people is lying.

Your scenario only happens if the credit card company is incompetent. But then the bad guy is the incompetence really...

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