At the beginning of March I wrote about the possibility of Target shutting down Amex RedBird accounts for suspicious activity. There’s no confirmation yet if this was legit or a hoax. However, it is leading more towards a hoax since more readers have not stepped forward claiming the same fate of their RedBird account.

A fellow blogger that I follow, Million Mile Secrets, wrote yesterday and how him and his wife are switching to RedBird. While the switch may work for some, I wanted to point out issues that I have with the RedBird. Daraius did not mention that gift cards may not be accepted as a loading option. Furthermore, buying gift cards in bonus categories are a huge advantage to BlueBird customers.

RedBird is a relatively new product that is being offered by Target. You can’t pick it up in every Target store (yet). It works the same way as BlueBird, but the big reason why so many people are flocking from BlueBird to RedBird is the fact that you can load up to $5,000 per month with a credit card and earn miles. There are no fees involved and you don’t have to run around buying gift cards like you do with the BlueBird card. Should you switch from BlueBird to RedBird?

(More here on what you need to know about American Express BlueBird)

Target RedBird Benefits

I really like the fact that you receive 5% off your entire purchase at Target when you use your RedBird card. I used to grocery shop at Target before I switched to Whole Foods. For someone who buys almost all their household products from Target, including groceries, there’s absolutely nothing to stop you from loading your RedBird card at the customer service desk before you shop and then pay with your RedBird card at the checkout to save 5% on your entire purchase.

Amex RedBird card

Save 5% on your entire Target purchase each time you pay with your Target RedBird card.

Not interested in saving 5%? If you’re like me and you only use your RedBird/BlueBird card to manufacture spend so you can earn airline miles and points, then you’ll be happy to know that Target accepts credit cards as a form of payment to load money to your RedBird account. Target could change this at any time and this would leave many manufactured spenders stranded.

Can I load gift cards to RedBird?

I’ve seen mixed results on this. While NoonRader posted in Daraius’ comments that he can load gift cards to his RedBird card, Target cashiers are not supposed to accept gift cards if they check.

There’s a large FlyerTalk discussion here that talks about the Amex RedBird card. In the Wiki, it mentions gift cards and loading them to RedBird:

Q: Can we load Redbird with Target gift cards at Target?
When loading, the register displays a large message saying that gift cards cannot be used to pay for this transaction.

While there are reports on FlyerTalk that gift cards do load as credit and debit, be prepared to show your ID if the cashier asks. I’ve never once been asked at Walmart and I like the fact that I can be discreet and load money at the Walmart kiosk.

I have 6 BlueBird cards and load $30k a month at 2 Walmart locations. I just don’t think I could pull this off at Target without being noticed. Does anyone else feel that Target employees are trained better?

Simon Mall Visa gift cards manufactured spending

I like buying gift cards from different stores and then depositing them via BlueBird because it mixes up my spending habits. I can also be discreet at Walmart by using the kiosk they have setup in the customer service area.

Why would anyone want to load gift cards if Target accepts credit cards as a funding option?

First, I have credit cards that offer bonus points for spending in certain categories like grocery. While I am paying an activation fee on each gift card, I can earn more points versus the minimum points I’d earn at Target for using that credit card as a funding option.

Second, some credit cards companies (Chase and American Express) tend to adapt fast to to manufactured spending habits. Let’s say I want to charge $15,000 in 1 month to a credit card for an upcoming trip, the credit card company is probably going to be suspicious if they see large purchase amounts at Target. This would be a good time for American Express to turn off all your cards and request you to fax in your taxes for a financial review. Since I know Walmart and BlueBird accept gift cards at their ATM machines as a funding option, I can visit multiple locations in my neighborhood that I know sell gift cards. In return, I can split my large purchases up among different stores and this looks less suspicious to the credit card company.

Finally, if Target does decide to pull the plug on accepting credit cards as a funding option, I don’t want to be stuck with a card that doesn’t allow me to earn miles anymore!

Gift cards at the grocery store

Officially, Target is not supposed to accept Visa gift cars as a loading option to RedBird. Some readers don’t have a problem doing this, but you could be asked to show your ID. As RedBird picks up, I imagine Target will eventually switch the rules.

Should you make the switch to RedBird?

Maybe. If nothing what I mentioned above is a concern to you, then by all means make the switch. You can always go back to BlueBird should there be any drastic changes that happen with the RedBird card.

Personally, I like having the discretion that Walmart and BlueBird have going on with the kiosks that are setup at my 2 local Walmart locations. This does mean I’m paying minimum of $237 a month in gift card activation fees (ouch!) I load $30k a month. $3.95 gift card activation fee x 60 cards = $237. So I definitely see why RedBird is so attractive to many manufactured spenders.

I can’t tell you what to do. I’m just playing devil’s advocate and want readers to be fully aware of what could or could not happen if they make the switch.