The miles hounds have throught through these scenarios pretty thoroughly :)
WHILE airmiles < MAXINT do { load, withdraw, pay card bill }
Round and round the money goes. :)
Obviously the fee-free aspect was unusual, perhaps an oversight but more likely an attempt to get some critical mass in the online payments market which, at the time, was primarily only PayPal and a UK outfit called "NoChex" (which of course DID charge a fee.)
Eventually a loading fee did arrive, and a little later on, the service closed up shop entirely.
A lot of airline miles were earned at the expense of the US government.
The cost to the mint to produce a coin is far less than the face value.
Whether anyone was actually hurt depends on how the cost to distribute this way compares to the normal cost to distribute new currency.
And, assuming this method was more expensive, calculating who was hurt and by how much would take me a few hours. Maybe someone else has that more on the top of their head.