Using GameStop as a bank | Hacker News Reader

Using GameStop as a bank

kottke.org

123 pointsseivan79 comments

Consider a venn diagram containing "people smart enough to game GameStop into being their bank", "people not smart enough to avoid overdrafts", and "people not creative enough just to set up a prepaid debit card system for themselves". In the overlapping space of these three circles, you'll find this guy, and a very confused leprechaun riding a unicorn.

Best laugh I've had all day.

people not smart enough to avoid overdrafts

Remember that historically, banks have processed transactions in whatever order is most likely to produce an overdraft, even if the same set of transactions, processed in chronological order, would not produce an overdraft. Also note that the complaint is not that he overdrafted, but that he can't turn off the overdraft "protection" that charges him a fee -- he'd rather just have the transaction declined, and can't get his bank to do that.

Can you produce a source on the "banks have processed transactions in whatever order is most likely to produce an overdraft"?

Wikipedia article has some sources on it: http://en.wikipedia.org/wiki/Overdraft#Transaction_processin...

Here's an example: http://consumerist.com/2013/10/22/bank-of-america-stops-over...

Most big banks have done this for a while and only recently abandoned or are abandoning the practice. I anticipate a large class-ation suit and payout within the next few years, because they took this to wildly abusive levels. For example a few years ago I went out one day and made 2 small (<$10) debit card purchases, passed an ATM of my bank and made a cash deposit, and then made a larger purchase an hour later (which was why I had deposited the cash, as I had a low balance). Chronologically this was all good, but thanks to transaction re-ordering I got hit with $105 in fees (#35 x 3).* I got it reversed, but the sad fact is that for a long time the transactions shown on your account and your available balance were treated as fictions to be re-arranged at the bank's convenience if doing so would yield fee income.

* eg for illustration, though I don't remember the specifics:

  a. starting balance       $30
  b. debit card      -$10 = $20
  c. debit card      -$10 = $10
  d. cash deposit    +$60 = $70
  e. debit card      -$65 = $ 5

Which all looked fine at the time (eg checking recent transactions and available balance at ATM following deposit), but 24 hours later the transactions had been reordered from smallest to largest and my account looked like this:

  a. starting balance       $30
  e. debit card      -$65 =-$35
  A. Overdraft fee!  -$35 =-$70
  d. cash deposit    +$60 =-$10
  b. debit card      -$10 =-$20
  B. Overdraft fee!  -$35 =-$55
  c. debit card      -$10 =-$65
  C. Overdraft fee!  -$35=-$100

I wish I were making this up, but sadly not. I was just lucky enough to have the smarts and time to go into a branch and browbeat a manager into getting the charges reversed. However, my understanding is that millions of people have been ripped off by this trick in recent years.

Most accountants would list numbers and place them in ()'s for negative values.

This really breaks my mind when it comes to transactions though, as ALL transactions SHOULD be globally ordered.

It's not the order most likely to produce an overdraft, it's the order that produces the most overdrafts.

$500 - $1 - $2 - $3 - $4 - $5 - $1000 sounds like one overdraft but if it's processed in the reverse order it's 6 overdrafts.

I did this in that order in college, probably 9 years ago. Obviously the mistake was my fault, but imagine my surprise when I went online to fix it and pay the $35 fee and found that it was over $200. When I called SunTrust they told me that their policy was to process payments from largest to smallest.

This was my second overdraft, the first time my card "worked" so I assumed that there was more money in my account than I remembered (wasn't aware of overdrafts at the time).

Here's a good one someone linked below

http://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-ba...

I am fairly certain that it is illegal not to allow disabling of overdraft protection. When I went to my old bank's branch, I asked for it to be turned off, and they said "We need a letter written to this effect."

I asked for a piece of paper, addressed the branch manager, and asked in a sentence to disable it for my account. They seemed perturbed that I would do this while the line was waiting behind me, but frankly, it's their policy.

I had it turned off immediately.

You forgot "People who have a small enough amount of money to not exceed the number of games available for pre-order."

This is finance. Anon is storing his assets, dealing with uncertainty.

In 'Poor Economics' there was a chapter about saving in West Africa. Apparently the way some people there do it by contributing some money in a pool on a periodical basis and each time the group meets, the pool is immediately given to one member, whose turn it is. So if you are in $10-per day group that withdraws once a month, you can be sure that once every 30 days you'll withdraw your $300, without worrying too much about banks, withdrawal fees, etc.

It's actually very widespread in all sorts of countries and cultures.

There was a good Planet Money show that talked about it here: http://www.npr.org/blogs/money/2013/06/18/193176928/episode-...

http://en.wikipedia.org/wiki/Susu_(savings)

What is going on with that Wikipedia article. The first two sentences are written badly to the point of being incomprehensible.

If you understand German (I couldn’t find the French version) you can also watch this about the same principle: https://www.youtube.com/watch?v=1A2LYK9x9eM&t=325s

It’s basically identical to the Susu in the Wikipedia article you linked to (and many of the same points are made in the radio and TV show), but this time it’s called a Tontine and it’s being used in France (imported from Africa): http://en.wikipedia.org/wiki/Tontine

The Tontine described in that article is a bit different from what you were describing and from what Susu is – but the Tontine described in the TV show is basically identical to the one described in the radio show.

I think this idea first appeared in the United States. I'm sure there's a story about how Ford sold the Model T. Few people could afford to purchase up front, so groups of people joined together and paid a set amount each month. Say $50 amongst 100 people. Each month, they'd buy a Model T and a few lucky people would get the car. So, rather than 100 people waiting a year to purchase, on average they waited only 6 months. That spawned the creation of mail order, then revolving credit, and the Western world has never looked back.

Wow. What a great idea. Worst case is exactly the same as if you just saved up the money the old way. If there was 160 people doing this for 500 a month for a new Tesla, I would probably join.

The worst case is that the people without Teslas are taking the people with Teslas to collections.

Even if everybody plays fair, some people are likely to have bad luck and start missing payments.

I've heard somewhere that, until recently, in Myanmar sim cards were so expensive (couple grands each) that they were used as assets (like gold teeth, but more convenient to use).

http://en.wikipedia.org/wiki/Tandas

This seems like satire to me, I wouldn't read to much into it. And I think that the fact that some people are taking it seriously just proves that it's actually pretty good satire.

"The stories and information posted here are artistic works of fiction and falsehood. Only a fool would take anything posted here as fact."

That's only /b/ though. Based on post numbers this is from /v/, but yeah, anyone can lie.

Two words: counterparty risk.

If GameStop goes under, I don't know where "customers who have pre-orders" end up on the line of 'creditors'.

Same as other unsecured creditors, unless the company convinces the bankruptcy court & the other creditors it's to the benefit of the business in the long run to give them what they paid for.

Most corporate bankruptcies are restructurings, not liquidations.

That's why I transferred all of my earnings to BTC via MTGoX.

Instead of posting judgement over this guy it would be more interesting to talk about other financial hacks.

One 'hack' I do is to use my credit card outside my country, but when I get paid in my own country my family repays the credit card debt with that money; is cheaper than using wire-transfer (i.e. western union) or direct bank transfer.

I'm not sure if I understand. Essentially you're saying your credit card company has a better exchange rate than the other two services?

Yes, I can believe that is what he is saying. Certain banks/credit cards have relationships with foreign institutions that can cause unexpectedly low fees, given the right circumstances. On top of which, I've found that both Western Union and bank-to-bank transfers, on the whole, are a huge ripoff on both rates and fees--especially for frequent, small volume scenarios.

When I worked in Canada, I used the no-ATM-fee agreement [1] between ScotiaBank and Bank of America to convert USD to CAD and transfer money between the accounts. This involved the rather odd procedure of going to a ScotiaBank ATM, withdrawing a lot of CAD off of the USD in the BofA account, and stuffing the cash right back into the ATM as a deposit on the ScotiaBank account. Any other procedure, including using a teller or trying an online wire transfer, would have been more expensive and inconvenient. The above had no per-transaction fees and only a 3% conversion fee added to the market rate, which is about average compared to credit cards. (Any of Western Union's "instant" options for this kind of transaction require about 9% in fees.)

There are some credit cards with no foreign transaction fees, which is what I would use today if I had to do it again. Using such a card to purchase items in the foreign country, and then paying off the balance with the home country bank, results in "free" currency conversion. That's what GP is referring to.

[1]: http://en.wikipedia.org/wiki/Global_ATM_Alliance

Yup, I did the same thing in China by withdrawing RMB from my bank account at Bank of America at a China Construction Bank ATM and immediately depositing it in my local account. Zero fees and good exchange rate.

The only annoying part was that the amount I needed to pay my initial rent + security deposit was more than my daily withdrawal limit, so I had to transfer up to the limit three days in a row to get enough money in there to start.

I heard from a colleague that this deal no longer exists.

I opened a CCB account before my last trip to the US. I was charged a 3USD ATM fee at the BofA ATM. I don't know what exchange rate was applied when the 303USD was converted to CNY, but most Chinese banks load these transactions much less than those in the UK (which usually charge 2.25% to 2.75% above the Visa wholesale rate).

Yeah, that was in 2009. I don't know if CCB/BoA still have the no-fee agreement.

But now I have a checking account at Schwab that refunds all ATM fees, including internationally, so I could do it with that.

FWIW, I opened a French HSBC account (I am a US citizen, btw) and used the ATM withdraw-deposit trick you just described in order to produce Euros for local use. I was subsequently called in by the bank because they found my high denomination cash deposits very suspicious and requested that I stop doing it.

I wanted to offer an anecdotal warning that such a trick may work fine, or it may ruffle feathers; just be aware.

I once worked for a German company that would pay me by bank transfer. It's a lot cheaper to send international transfers around the EU now, but then fees were high and transfers took quite a bit of time. So I went out to Germany, set up an account at DeutscheBank there using an uncle's place as a mailing address. Got my debit card, used it to get cash from the DB ATMs in my country.

This guy complains about overdraft fees. Isn't the simple solution not to overdraft? Almost any bank has online access to your account, and ATM/Debit transactions seem to show up immediately. If you are getting toward the end of your pay cycle, make a daily check of your balance. Have a habit of mentally subtracting some fixed amount (say, 1,000) from your balance whenever you look at it, so you always have a cushion too. BTW, when you have a bank turn off overdraft privileges, that applies to your debit card only (i.e., instead of letting a transaction go through it will get denied at the terminal). But any check or automatic withdraw will still generate an overdraft fee.

If you need something a bit simpler, set up two accounts -- one for recurring bills, a second one just for your debit card. Have your paycheck split accordingly between the two accounts (or set up an bi-weekly transfer to coincide with your paycheck deposits). Any utility bills, mortgage / rent payment, etc comes out of the bills account. Then you never miss an important bill payment. Bonus -- to make this work, you need a bit more going into the bills account than what goes out. At the end of the year, you will then have a surprise savings balance sitting there.

Man, no offense, but you sound like someone who has never worked paycheck to paycheck. I'm not endorsing his banking scheme, but I can sympathize with the shityt overdraft fees are.

Also "seem to come in order" is not really good enough when you are down to 5 or 10 dollars left. Also, I have seen many examples of banks processing things out of order to maximize the overdraft fees. Ie. processing larger transactions before smaller ones that occured before them chronologically, so that a number of 4 or 5 dollar purchases would end up each having a $35 overdraft fee.

For 95% of situations it would be much more in the customers interest to just reject the transactions. But the banks make a killing off of exploiting the people who can least afford it (those with almost no money in their account).

edit: downvotes? Anyone care to actually tell me what is downvote worthy in this post? The guy's recommendation to "subtract 1000" from whatever your balance is is totally infeasible for a large portion of the population.

Shouldn't this be an illegal banking practice?

I don't know if it's legal or not but I've never seen any guarantee that transactions will be processed in the order they are made. And the people who it happens to aren't the type of people who can afford an attorney anyway.

Historically it was legal; I want to say it was banned a couple years back, but I'm not confident about that.

It wasn't banned and it is still quite legal. Overdraft fees are banks' bread and butter. They continue to process withdrawals before deposits and many process them in the order that maximizes overdrafts.

http://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-ba...

Wow, thanks for that link.

In 2012, banks took in $32 billion in overdraft fees up $400 million from the previous year. The record was hit in 2009 with $37 billion in overdraft fees collected by banks.

Luckily there are some new kids on the block that (say they) won't ever rent-seek with fees. https://www.simple.com/ is one I know of.

> The guy's recommendation to "subtract 1000" from whatever your balance is is totally infeasible for a large portion of the population.

I liked how the example used $1000, too. As if poor people even have that much in total. A better example would have been +/- $10, but a lot of people here have absolutely no comprehension of poverty in the US.

Spot on right there. From the archived thread linked below:

>I'm not exactly a rich [person] so interest means very little to me. At most I keep about $1000 in the bank even though I try my best to save up.

My apologies -- I meant 100, hit an extra key. And for the record, yes I am currently living mostly paycheck to paycheck, although I make decent money (my own fault -- I've got a live-in significant other, she can't work any more due to disability, and I've had to take over her expenses, including car payment [her's and one of her kid's), meds, etc.) But even so, I'm able to do odd jobs for people, and that all goes into a buffer balance. Yes, I can't compare myself to someone on minimum wage, but when everything you make goes to existing obligations (again, I could have said no to a lot of things, but when it is the choice between more credit card debt for a vet bill, and putting down a pet that has been instrumental in drawing a certain family member out of deep depression...)

Bonus -- to make this work, you need a bit more going into the bills account than what goes out.

Easier said than done. Working in a mall he's probably not making top $. Theoretically you can have your bank decline a transaction rather than charging you an overdraft fee, but in practice they often ignore such requests, claiming that they're trying to save their customers from embarrassment, though I think most people would rather be slightly embarrassed than pay a $35 fee.

Overdraft fees used to be quite low, like 45 or $10 so if you did it occasionally it wouldn't be a big deal, but after the financial crisis most banks jacked them up substantially.

What is the difference between this guy's scheme and not using the debit card for purposes other than withdrawing cash at ATMs ever? As an added bonus, your cash at the bank stays as cash theoretically forever rather than converting itself into a video game.

I doubt Gamestop accountants are too thrilled about having to do extra work, or potentially be accused of money laundering or running an unlicensed money transmitted business.

They can put an end to this overnight by having a simple TOC having to be signed on every preorder. In US you wouldn't want to break TOC...

I think the larger point of this is that this guy found a system not intended for this at all, and it still works better than businesses set up for this purpose.

I dunno, my bank not only pays me 3% interest on a current account with free withdrawals from most ATMs and free payments to other bank accounts, it also doesn't send me computer games I don't want if I don't forget to cancel them.

What bank pays 3%?

Santander in the UK. It's a big market share ploy, but it's a good one, and there isn't really any catch.

Quality contribution(s) in an anonymous community? Who'd a thunk!

Really? That's what passes for journalism? Straight up copy garbage from reddit, which copied it from 4chan, and republish it without adding ANY original thought to it? That's normal on Buzzfeed, but I didn't know kottke.org was this worthless.

Kottke isn't a journalist, he's a blogger.

Gamification is clearly the future of banking.

Or he could... just... I dunno. Use cash. If cash = empty, then no more purchase? Because clearly the guy can't handle his finances using debit cards and keeps on overdrafting his account.

By using cash, if his/her house gets robbed, s/he would lose the whole paycheck. Hell, for all we know, s/he might not even be able to trust the people s/he lives with.

Yea and gamespot might go bankrupt or a meteor could hit him on the head. I mean we aren't talking large sums of money here if he is over drafting his checking regularly.

Sounds like this scheme: http://www.youtube.com/watch?v=qesFpsi2mII

Why not just use a reload-able prepaid debit card if he/she is that bad at managing money? Managing your bank account is not that difficult.

I bank with Chase and they warn you if you get under the notification level you set, my phone will actually vibrate in my pocket with the message just after I swipe the card. Also even if you do overdraft and you get notified (with Chase)and can go make a cash deposit that same day and they won't charge you any fees. BOA is a different beast, stay far, far away from BOA if you can.

It strikes me as really weird that a company would take your money for a preorder. It's not really a thing here in the UK, I don't think. Amazon certainly doesn't take my money before the product actually ships, and large stores like GAME or HMV only take a small, non-refundable deposit.

When I worked at GAME we didn't even take a deposit. Managers are pushed to get as many preorders as they can, and as a store it directly affects how many units of a game you get in so there's a big incentive there. It got to the point when we'd ask people if they wanted to preorder anything just in case they wanted it later; there was no obligation to buy it so no harm to the customer and the store would benefit by getting more stock.

It was always fun looking at the preorder list.. there were quite a few vapourware titles on it.

Or just buy games with your rewards credit card, return them for a cash refund, then pay off your credit card bill with the cash.

You can return new games if they are unopened, used games within 7 days. You get free points and GameStop foots the bill for the credit card fee.

Not sure if it's illegal, but definitely a dick move.

not to mention that if gamestop changes their return policy, you could end up getting royally fucked.

Every store I've heard of refunds credit card purchases to the card in question, not cash (although with a no-receipt you can sometimes exchange it for store credit, & possibly sell that at a smaller discount than the rewards payoff), and every credit card I've ever heard of doesn't give you rewards if the charges are reversed (either because of a refund or a chargeback).

Many stores (eg, Home Depot) also track their customers' refunds and will stop allowing you to return merchandise if you're an outlier.

Right, but GameStop lets you return credit card purchases for cash.

Just last month I returned a used game that I didn't like they gave me cash even though the original purchase was with a credit card.

My guess is that since they've already eaten the processing % to debit your card they don't want to pay it again to credit your card. Not sure if large scale retail still pays on the reverse, I'm assuming.

Bet that works real well for paying bills / making online purchases

This is retarded. What happens if GameStop goes belly up? You could be out the games and the money. I think this must be a trolling.

Games are like porn - is the best way for people to procrastinate and delay facing the real life issues.

This industry will die the last.

I realize the game industry won't go away overnight but individual companies will always come and go. The same plan would have been equally plausible with CD stores in the 90's.

Mall bookstores and music/movie stores have already died...

I'm kinda confused, has this dude never heard of Credit cards? Or is he already so bad at money that his credit score is too low?

Sounds better than keeping your money in bitcoins

Money laundering?

Walmart gives cash back when you return something purchased on a credit card. Not sure what the parameters of this are, but I had it happen once with a ~$300 purchase and it was weird and very "money launder-y"

Walmart gift cards on cardpool.com generally have a pretty tight spread and high supply (liquidity?).

I'm kind of curious how many Walmart cards are actually bought as a legitimate gift rather than as some kind of vehicle to transfer money.

I guess Aaron Greenspan needs to sue Gamestop now...

If anyone wishes for whatever reason to read the original thread, http://archive.foolz.us/v/thread/235956257/#235956257 here. Caution: it may contain content that you find offensive, but was posted in jest in the original context. There is also content that is offensive and posted with the intent to offend. There is also content that is funny, but was posted with the intent to offend. There is no known algorithm to distinguish between them. Read with caution. Images are not archived, only thumbnails.

Edit: And before I forget. This thread is on the videogames board, but some people post pictures of anime girls wearing clothes. I've seen people get extremely angry at that practise, so if you're one of them, turn images off or something.

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