Loyalty points are money

Surely the ultimate proof that loyalty points are in fact a form of money is that people steal them.

It is not unusual to hear people at conferences about payments (e.g., me) talk about loyalty points and say that they are already a form of money, which is sort of true. The concrete proof that they are form of money is that people steal them. Remember the proliferation of recent stories about Tesco loyalty points being the subject of widespread attack.

Tesco customers have complained that vouchers worth hundreds of pounds have disappeared from their online rewards accounts, raising the possibility that thieves hacked into the company’s system.

[From Tesco calls in police after dozens of customers complain that their Clubcard accounts have been emptied online | Mail Online]

In case you were wondering where these stolen loyalty points are going to, well…

Screengrabs taken from Silk Road 2, the successor to the original site, reveal that its most popular items for sale until recently were Tesco Clubcard vouchers. Vouchers worth £100 each, offered by a vendor using the handle Revivalry, were selling for $61 (£43).

[From Silk Road website did roaring trade in Tesco Clubcard vouchers | Society | The Observer]

Seriously: last weekend, the most popular items for sale on the darkest of dark webs, the spawn of Bitcoin and Satan, Silk Road, were Tesco vouchers. Not terrorist training manuals, ketamine samplers or child porn DVDs, but Tesco vouchers. In other words, money. Sold at a discount. And a pretty big discount (not that I know what money launderers generally charge for this sort of thing). Pound notes selling for 43p.

Yes, these vouchers are money. As I’ve written before, a John Lewis voucher, a Clubcard voucher, a Marks & Spencer’s voucher, are all means of exchange that trade at par. I have personal experience of this and will state unequivocally that I will accept John Lewis vouchers as de facto legal tender for the discharge of debits incurred. I spend a fortune at Amazon, so Amazon e-vouchers are money. Anywhere I spend money, there is the potential for a money substitute. Surely this is where e-money is taking us.

When I was originally mulling over the threats to supermarkets throughout the land, I heard a report on BBC Radio about the Metropolitan Police calling for something to be done about ticket fraud for pop concerts and sporting events, running at about £40m per annum in London, if I heard correctly.

The Metropolitan Police’s specialist ticket fraud unit has called on the government to introduce legislation around the resale of tickets to gigs and sports events.

[From BBC – Newsbeat – Police call for ticket resale legal regulation]

This is ludicrous. It is absurd that ticketing reselling is illegal at all, If you bought a ticket, you should be entitled to do what you like with it. But that’s by the by. The source of these problems are the same as the source of the loyalty points problems and most other fraud problems: As you might expect, the lack of an identity infrastructure. Identity is the money, but it’s also the new loyalty card, the pop concert ticket and the sporting event ticket.