Secret Weapon Labs

Dear SWL-readers,

I must apologize. The DNS refresh of scretweaponlabs.com took the site though a digital purgatory over the past couple of days and for all of you that beared through it and came back. I’m sincerely appreciative and would love to offer thanks for your patience.

The following came through to me via email so I can’t post a source and offer a link,yet, but I will include the author’s name (John Crudele). It is completely legitimate. Please feel free to leave a comment if you have any idea where this came from.

May 16, 2006 — We paid 6 cents a gallon for gasoline on Long Island last week.

Six CENTS a gallon. And it’s the same price anywhere else once I tell you the secret.

As you might have guessed, we did have to be a little creative to get a $3 gallon of regular gas down to just pennies. But it actually wasn’t all that difficult thanks to a useful flaw in the Bank of America’s Keep The Change debit card promotion.

As the bank explains in its brochures, if someone uses Bank of America’s check card to purchase a sandwich for $4.50, the bank will round off the amount to the higher dollar - in this case $5 - and will put 50 cents away for you in a savings account.

The same applies to all purchases, the ads say, including “every tank of gas.”

All that change - up to $250 - will be turned over to you in a year from the time of the purchase. “Using your Bank of America Visa Check Card is always a smart way to spend,” says the promotional material.

Well, consider Bank of America out-smarted. And Sheldon Evans, a reader of this column and the owner of The Tax Advantage, showed me how last week.

I met him at a self-service gas station in Roslyn in a real cloak-and-dagger operation, and we proceeded to put about 10 gallons of $3.22 a gallon Exxon regular into the tank of his Lexus GS 330.

The total cost - after the rebate - was just 66 cents, or 6.6 cents a gallon.

“At this time of rising gasoline prices, I’m grateful to Bank of America for being so generous,” says Evans, who is thinking about doing a book on the wise use of credit cards.

“I might even go for 7 cents a gallon at my next fill-up.”

Of course, we could have filled the tank. Thirty gallons would have cost us only about $1.80, but it was the amount of time this process took - certainly not the money - that was the deterrent.

Beating the system was easy.

First, it’s best to do this at a self-service station although one with an obliging - not to mention, patient - attendant will also work.

1. Swipe your Keep The Change debit card and pump exactly $1.01 worth of gas. Make sure you stop the meter at precisely that amount for maximum savings and max annoyance for Bank of America.

2. That’ll give you a 99-cent rebate from Keep The Change.

3. So, that approximately one-third a gallon of gas actually costs you 2 cents. (The difference between the $1.01 you put on your debit card and the 99 cents you’ll eventually get back.)

4. End that transaction.

5. Now, repeat the process. Swipe the bank card, pump $1.01 worth of gas and end the transaction again.

6. Now do it a third time. Swipe, pump $1.01 of gas and complete the deal. You now have $3.03 worth of Exxon’s gas and - once your rebates kick in - you will have paid 2 cents for each transaction or 6 cents for $3.03 worth of gas. The full gallon will cost you about 6.6 cents.

If your reflexes aren’t very good and you happen to let the pump go to, say, $1.03 or $1.04, your cost will nudge up to 10 cents a gallon.

Evans showed me his bank statements as proof, but the inner workings of the Keep The Change system are complicated.

Customers have to put $750 of their own money into a checking account and $300 in a savings account at the bank, and each rebate (that 99 cents, for instance, that you get back on a gasoline transaction) is withdrawn from that account.

After a year, a customer gets back the amount withdrawn plus a matching sum from Bank of America.

At that time, Evans will have his original $250 restored, plus he’ll get another $250 from the bank. For the first three months, Bank of America will give you penny-for-penny the amount of change. After that, you get just 5 percent.

But Evans says he has set up a series of checking accounts and maxed out on Bank of America’s offer twice already and is on his third go-round.

And he plans to keep doing what he’s doing until the bank wises up and changes the rule - which, he and I suspect, won’t be long after this story runs.