From Forbes:
It goes something like this: The U.S. Mint, through a 2005 act of Congress, is required to place $1 billion worth of the golden presidential and Sacagewea dollars into circulation in an effort to stimulate general use. The only problem is, the coins haven't really caught on with the general public. But there is one group of people that have enthusiastically embraced their use: travel hackers, so called because they aggressively look for loopholes in promotional programs and for tips on travel websites for ways in which to make the best use of their travel dollars. Much of this "hacking" involves taking advantage of frequent flier programs in unique and innovative ways.
The dollar coin trick involves purchasing large amounts of coins with a frequent flier card, waiting for the Mint to ship the coins (free shipping!), and then taking the coins to the bank, where they are deposited and the money is used to pay the credit card charges. No money is lost, the frequent flier miles rack up, and travelers can use them for upgrades or completely free flights whenever they want. According to NPR's Planet Money, which broadcast a story about the scheme on Wednesday morning, the Mint caught on when some customers started buying hundreds of thousands of dollars worth of free coins, so it has since limited purchases to $1,000 every ten days. But 3,000 free frequent fliers miles per month still isn't a bad deal.
Contrary to some reports, the practice hasn't ended since the Mint enacted the new rules; it's only slowed down. You can find the web page for the Mint's coin program here.
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