Did you make the swift switch from American Express BlueBird to RedBird? Well it looks like Target has started shutting down RedBird accounts that appear to be abusing the system. There’s no confirmation yet if it’s Target or Amex shutting down the accounts, but my money sits on Target. Otherwise Amex would have started shutting down BlueBird accounts a long time ago.
What is RedBird?
RedBird is Target’s answer to the BlueBird that Walmart has had for a couple of years now. RedBird is new and it’s not in every state right now. The big reason why people were switching from BlueBird to RedBird is because Target [currently] allows customers to load their RedBird account with a credit card payment. In return the customer earns miles and they don’t have to pay any fees.
BlueBird does NOT accept credit card as a loading option, but cash or debit. Since gift cards now come with a PIN, most BlueBird customers buy Visa gift cards with their credit card and then deposit the gift cards via their BlueBird account at Walmart.
On the flip side, I’ve read reports where Target does NOT accept gift cards as a payment option and Target employees are trained to ask and verify. Walmart isn’t “officially” supposed to accept gift cards, but Walmart is more loose with their rules and the employees are not trained as well. Some Walmart locations also have a money center kiosk which allow you to deposit your gift cards without any human interaction. Target does not have this option.
RedBird account shutdowns
RFDMinnesota from FlyerTalk is first to report that his RedBird account was shutdown for the following reasons:
Repeated suspicious activity on your account has been documented as followed:
- Register “Cash” Reloads in $1000 or $500 increments.
- Withdrawls and/or bill pays equal to the account balance immediately following “Cash” Reloads.
Here is the image posted by RFDMinnesota:
What does this all mean?
There are some who are calling it a “hoax”. While I would like to think so, RFDMinnesota has been a member of FlyerTalk for more than 2 years and has a substation number of posts. The e-mail also looks legit and he has nothing to gain from trying to fool everyone.
How to avoid RedBird shutdown
Some are saying that if you load in odd amounts and don’t withdraw the money right away, this could avoid account closure. Other RedBird card holders suggest that customers should be charging purchases to their RedBird card after loading money. This is all speculation and there’s no guarantee that this will keep you under the radar.
I don’t think there’s any safe way to avoid your RedBird account from being shutdown unless you’re actually using your RedBird account for its intended purpose. If you continue to load money to your RedBird card and withdraw money immediately, tread with caution!
This is exactly why I wasn’t so quick to make the switch over to RedBird. Target is much more aware of what’s going on and their IT department is probably on high alert still after their data breach in late 2011.
Switch back to BlueBird?
Personally, I would. I’ve been saying on Twitter and my blog comments for sometime now that I was very skeptical of RedBird. I like Target better than Walmart, but their operation is much more sophisticated. I still think Target is on high alert from their big data breach that happened a couple years ago.
Another reason why I thought Target was allowing customers to load their RedBird account with credit card was to get everyone to switch over and then after they had enough customers, change the policy to block credit cards as a loading option.
If you do decide to cancel RedBird, I believe your account has to be closed for at least 30 days before signing up for BlueBird again.
Will this affect BlueBird customers?
At this time we don’t know if it’s Target or American Express that is closing the accounts. Again, I think it’s more Target than American Express. Since I’ve never read reports of a BlueBird account being shutdown, I don’t think we have to worry at this point.
What BlueBird customers should worry about– Lately there have been rumors that Walmart is going to block gift cards as a loading option. Please read this article for more info on that. So far I’ve been able to load gift cards without a hitch. However, Walmart could still be working on finalizing the implementation.
I hate to say I told you so, but when something seems too good to be true, it probably is. Loading credit card to a RedBird account FREE OF CHARGE? Immediately I thought, this is not going to last! I wish it was wrong, but I was always leary of RedBird.