A Funny Story About AIR MILES and LCBO

Not exactly manufactured spending, but along the lines of points manufacturing, I recently read a short 30 page ebook by C. Lawsum called “The Air Miles Scheme”. In this ebook the author details an extravagant and unethical scheme in which he was able to make off with six figures in Air Miles.

The summary of the story follows.

The author (we’ll call him C.) was a senior non-management employee at LCBO in Ontario. This was the very early days of Air Miles program, and during C’s tenure he witnessed the first Air Miles stickers go up as LCBO begin awarding Air Miles for liquor purchases.

Being the early days of the Air Miles reward program, C observed that almost every customer when asked, did not have an Air Miles card to scan or a collector’s number. C saw an opportunity – I’m sure you can all hazard a guess what happens next. C started scanning his own Air Miles card…

Of course, this was quite obvious and made a loud sound each time he scanned. It wouldn’t be difficult for customers to identify what he was doing here. So C took a logical next step to scale his scheme. He disguised his Air Miles as a special donation card. When customers didn’t have their own card C would ask if they minded donating the Air Miles to the ‘charity’, which ultimately resulted in the miles being credited to his own account. Genius.

Of course, this story (whether true or not) ended tragically when C accidentally pulled the scheme on a customer who happened to be on the executive board for the LCBO. They promptly reported him and put his head on a platter, so to speak. C was fired. Ironically, he was also dating the daughter of the LCBO’s head auditor. So he lost his girlfriend as well.

But, C still made off with 150,000+ Air Miles! How did LCBO not claw these back? Well they did, but at the time their auditing processed were… a little archaic. Instead of identifying the Air Miles number of C, they used footage to identify the transactions where C scanned his card. Fortunately, they only picked up when he was using his undisguised card. So they only identified and requested 6,000 Air Miles to be clawed back…

Now, I’m not sure how much of this story is true or sensationalized, but it is hilarious nonetheless. There are a few important lessons from it that I think relate to manufactured spending:

The “anti fiber rule”: never be regular. Don’t leave a traceable pattern. This is especially true with schemes that scale. If you’re loading money somewhere, don’t do the same amount every time, don’t do it every day, mix it in with legitimate spending and so on. The story detailed an example of this where a cashier got got skimming from the till because their cash outs were always correct except for Fridays where they were $100 short…
“The trick to lifting money from the till is to never be greedy.” Quoted in the story, this is generally applicable: maybe greed is not always good. However there is some nuance. In my experience, it depends on the specific method. There are certain MS opportunities that have been time-limited and low risk, where it makes sense to just do as much as fast as possible. Other times, its better to do a slow burn and milk the method as long as you can. Often, doing too much is directly what leads to shutdowns (of both the method and of the individual user).

Lastly, don’t underestimate the incompetence of quality control processes and IT systems, as evidenced by the auditor in this story. You’d be surprised what you can get away with, and what even established quality control processes in companies can overlook. Just because a policy or a T&C states something, doesn’t mean it is actually enforced in practice.

Until next time, happy manufactured spending 🙂

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Matt Astro

Contributor at Frugal Flyer

Matt is a technophile and math nerd who discovered travel hacking in 2015. His favorite points-powered trip to date was visiting Estonia. Matt takes no shame in being far too frugal. In fact, he would probably go as far as calling himself cheap. Seriously, if there is a way to get something for free, Matt will find it and take advantage of it (and then maybe write about it here).