The star of today’s story is the much-beloved king of shutdowns, Miles per Day. He bought Amazon gift cards through various channels, loaded them into his Amazon account, and used the balance to buy Best Buy gift cards and place some orders. Then Amazon emailed him saying his account had been shut down and all of his gift card balance had been confiscated.
Setting aside for the moment whether he actually violated any rules, from Amazon’s perspective, loading a large amount of gift cards purchased from various stores into a single account looks a lot like what people do when they use stolen credit cards to buy Amazon gift cards and then cash them out. If the cardholder notices the fraud and files a dispute with the bank, the loss is usually borne by the merchant that sold the card. That said, since these are Amazon gift cards, it is possible Amazon has agreements with the merchants involved, so Amazon may also take a loss. Confiscating high-risk accounts is therefore not a bad option: if the account really is fraudulent, then the thief is out of luck and Amazon wins; if the account was shut down by mistake and the user complains, Amazon can at most restore the account and gift card balance. They may take a reputational hit with that customer, but financially they still come out ahead.
Of course, for the rest of us, my personal suggestion is not to load too many Amazon gift cards into your account all at once. It is better to add them only when you are actually about to make a purchase. However, Miles per Day is known for hitting things hard, and the scale he operates at is certainly not something ordinary users can match. If you are just casually buying for 5x credit card category bonuses, you probably do not need to worry too much.
As a veteran, his response is also worth learning from. Generally speaking, the only way to avoid getting taken advantage of is to push back:
I think I’m going to have to BBB, CFPB, write to my attorney general, etc because it seems illegal that they can confiscate my GC balance without even giving me a specific reason as to why they closed my account.