what is round trip transaction

What are Round-Trip Transactions?

Complete Explanation of Round Tripping including Purpose, Example, & Risks

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In the complex world of financial markets and corporate accounting, the term “round-trip transactions” often surfaces amidst discussions of financial ethics, regulatory compliance, and corporate governance.

These transactions, while not inherently illicit, tread a fine line between strategic financial management and the murky waters of manipulative practices.

This comprehensive guide aims to unravel the intricacies of round-trip transactions, shedding light on their purposes, risks, and the legal and ethical considerations they entail.

• Round-Trip Transactions Meaning

Key Takeaways

The purpose of round-trip transactions, how is round tripping used, round tripping example, the risks and implications of round-trip transactions, legal and regulatory framework, ethical considerations of round trip transactions, detecting and preventing round-trip transactions, what exactly defines a round-trip transaction in financial terms, why might a company engage in round-trip transactions, what are the potential risks of engaging in round-trip transactions, how can round-trip transactions be identified or prevented.

Round-trip transactions refer to a series of transactions in which a company sells an asset to another party with the agreement that the asset will be bought back at a later date, usually at a similar or predetermined price.

This cycle creates the appearance of genuine business activity without any substantive change in the company’s financial position or the asset’s ownership. While round-trip transactions span various industries, they are notably prevalent in the energy sector and financial markets, where companies might engage in these deals to inflate revenue figures or to create a facade of heightened market activity.

The distinction between legitimate and manipulative uses of round-trip transactions hinges on intent and disclosure. Legitimate uses are typically transparent and aim to achieve lawful financial or operational objectives, such as hedging against price fluctuations. Conversely, manipulative practices are designed to deceive stakeholders or regulatory bodies about a company’s true financial health or market activity.

Manipulative Impact on Financial Statements : Round-tripping is primarily used to artificially inflate a company’s revenue and trading volume, misleading stakeholders about the company’s true financial performance and market activity.

Legal and Ethical Risks : Engaging in round-trip transactions carries significant legal and ethical risks, including regulatory penalties and reputational damage, as these practices can be considered deceptive and manipulative.

Importance of Transparency and Regulation : The detection and prevention of round-trip transactions highlight the importance of transparent accounting practices and stringent regulatory oversight to ensure the integrity of financial markets and protect investor interests.

Round tripping is often used to artificially inflate a company’s revenue and trading volume, creating the appearance of a higher level of business activity than actually exists.

This practice can be employed to meet financial targets, influence stock prices, or enhance the attractiveness of the company to investors by manipulating financial statements. By artificially inflating revenue, a company can appear more financially robust and liquid than it truly is, potentially influencing stock prices and investor perception.

The allure of round-trip transactions lies in their ability to temporarily enhance a company’s financial standing without necessitating actual business growth or operational improvements. This can make a company more attractive to investors, lenders, and analysts in the short term, albeit at significant risk.

Companies might engage in round-trip transactions in several different ways. Here are the most common round-trip transactions:

Inflating Revenue : A company may engage in round-tripping by selling an asset to another entity and buying it back at a similar price. These transactions can be recorded as legitimate sales and purchases, artificially inflating the company’s revenue and sales volume without any real change in its economic situation, misleading stakeholders about the company’s financial performance.

Boosting Asset Turnover : By repeatedly selling and repurchasing assets in round-trip transactions, a company can give the impression of higher asset turnover than is actually the case. This can make the company appear more efficient in its use of assets, potentially misleading investors about its operational effectiveness.

Manipulating Market Activity: In the case of publicly traded companies, round-trip transactions can be used to create an illusion of heightened trading activity for the company’s shares. This can influence stock prices by suggesting a higher demand for the shares than actually exists, potentially attracting more investors based on misleading information.

An example of round-tripping involves a company, Company A, selling an asset to Company B for $1 million. Shortly thereafter, Company B sells the same asset back to Company A for approximately the same price, say $1.01 million.

This sequence of transactions makes it appear as though Company A has engaged in $1 million worth of sales, thereby inflating its revenue figures, even though there has been no real change in the economic position of either company.

This practice can be used to manipulate financial statements and give an inflated impression of the company’s financial health and trading volume, potentially misleading investors and regulators.

The primary risk associated with round-trip transactions is the potential for legal repercussions and loss of investor trust. Regulatory bodies in many jurisdictions scrutinize such practices closely, and companies found guilty of using round-trip transactions to manipulate financial outcomes can face hefty fines, legal sanctions, and reputational damage.

Notable incidents, such as the Enron scandal, highlight the catastrophic impact that deceptive financial practices can have on stock prices, market stability, and investor confidence.

Moreover, round-trip transactions can distort market perceptions, leading to inefficient capital allocation and undermining the integrity of financial markets. The artificial inflation of activity or liquidity can mislead stakeholders about market demand, price stability, and the true value of assets involved.

The legal status of round-trip transactions varies by jurisdiction, but there is a growing trend towards stricter regulation and oversight. Financial regulatory bodies worldwide have implemented guidelines and reporting requirements to curb the abuse of such transactions.

The role of auditors and financial regulators is pivotal in detecting manipulative practices, necessitating rigorous examination of financial records, transaction trails, and disclosure statements.

Beyond legal implications, round-trip transactions pose significant ethical dilemmas. The fine line between creative accounting and outright fraud is often blurred, challenging companies to maintain integrity and transparency in their financial reporting.

Ethical business practices and robust corporate governance structures are crucial in mitigating the temptation to engage in deceptive financial maneuvers.

Companies must foster a culture of honesty and accountability, ensuring that all stakeholders can rely on the veracity of financial statements and market activities.

For investors and regulators, identifying potential round-trip transactions involves scrutinizing sudden spikes in revenue or trading volume without corresponding changes in market conditions or company operations. Vigilance and due diligence are essential in assessing the authenticity of reported financial health and operational activity.

Companies, on their part, can prevent misuse by adopting transparent accounting practices, regularly auditing financial records, and ensuring that all transactions are conducted at arm’s length and properly disclosed. As the financial landscape evolves, so too must the strategies for maintaining fairness and integrity in corporate reporting and market transactions.

Round-trip transactions, while a legitimate tool in certain contexts, present a complex challenge in the realm of financial ethics and regulation. As companies navigate the pressures of financial performance and market competitiveness, the temptation to engage in such practices underscores the importance of robust regulatory frameworks, corporate governance, and ethical leadership.

The future of round-trip transactions will undoubtedly be shaped by ongoing efforts to balance financial innovation with transparency and integrity, ensuring the stability and trustworthiness of markets and corporate institutions. In this ever-changing environment, the collective responsibility of companies, regulators, and investors to foster transparency and integrity has never been more critical.

Frequently Asked Questions

A round-trip transaction refers to a set of transactions where an asset is sold and subsequently repurchased by the original seller, often at a similar price, to artificially inflate volume or revenue without any real change in asset ownership.

Companies may use round-trip transactions to meet financial targets or create the illusion of increased business activity, thereby enhancing their financial statements or market valuation temporarily.

Round-trip transactions can lead to legal penalties, reputational damage, and a loss of investor trust if used to manipulate financial statements or deceive stakeholders.

Identifying round-trip transactions involves scrutinizing financial records for transactions that inflate company activity without real economic substance, while prevention requires transparent accounting practices and rigorous financial oversight.

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Shaun Conrad is a Certified Public Accountant and CPA exam expert with a passion for teaching. After almost a decade of experience in public accounting, he created MyAccountingCourse.com to help people learn accounting & finance, pass the CPA exam, and start their career.

The Meaning of "Round Tripping" in Accounting

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The accounting slang term "round tripping" refers to a series of transactions between companies that bolster the revenue of the companies involved but that, in the end, don't provide real economic benefit to either company. While not necessarily illegal, round tripping is at best disingenuous. It's important for a scrupulous businessperson to be able to recognize when a transaction may amount to round tripping – and, just as important, to know when a transaction that may look like round tripping is in fact legitimate.

Name Origins of "Round Tripping"

The name for the practice comes from "round trip" – a journey that takes you from one place to another and then back to your starting point. In essence, that's what's happening with financial round tripping: The companies involved start out in a certain financial position, and then they engage in a series of transactions. When all those transactions are settled, they're in the same financial position they were in when they started. They've made a "round trip." Such deals are also known as "lazy Susans."

Round Tripping: Meaning

A common round-tripping maneuver involves reciprocal sales of identical assets. Imagine you own an office supply store, and the owner of a stationery store comes to you with a proposal. He'll buy a pallet (40 cases) of copy paper from you at your retail price of $30 a case, for a total of $1,200. Meanwhile, you'll buy a pallet of the identical paper from him at the same price, $1,200. He's proposing a round-tripping deal. Other, more flagrant examples might include mutual payments for nonexistent "services," or one company "investing" in another, with the second company turning around and using the money to buy goods or services from the first.

Purpose of Round Tripping

According to Accounting Tools , the point of round tripping is to inflate revenue – to make a company look like it's doing more business than it really is. Although the bottom line for any company is profit, observers often judge a company's growth and size by its sales revenue. Round-trip deals generally don't inflate profit; after all, the $1,200 in revenue you would earn from selling paper to the stationery store would be offset by the $1,200 expense of buying an equal amount of paper. But each company gets that additional $1,200 in revenue, so it appears a little bigger and more active than it would without the round trip.

Legitimate Round Tripping Transactions

Say your office supply store has a delivery van whose tires are shot. You go to the tire shop next door and buy a new set of radials for $600. Three weeks later, the owner of the tire shop comes in and buys paper, printer ink, pens and other stuff worth $600 for his business. This would not be a round-trip situation. Each of you had a legitimate business purpose for these transactions; the fact that you both wound up with $600 in revenue and $600 in expenses, for a net profit of zero, is immaterial. Round tripping is about setting up reciprocal deals with no legitimate business purpose.

Legality of Round Tripping

The fact that legitimate deals can look like lazy Susans makes it hard to simply outlaw the practice. That said, WallStreet Mojo indicates that if a company is using self-canceling transactions to make its numbers look better to investors or lenders (which is the purpose of round tripping), it can be prosecuted for fraud. For instance, the Securities and Exchange Commission might charge several software companies relating to a round tripping fraud scheme for a series of transactions that an agency says provides no economic benefit and are intended only to boost the company's reported revenue.

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Rount-Trip Trading Definition, Legitimate & Unethical Examples

Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician (CMT).

What Is Round-Trip Trading?

Round-trip trading, or "round-tripping," usually refers to the unethical practice of purchasing and selling shares of the same security over and over again in an attempt to manipulate observers into believing that the security is in higher demand than it actually is. By creating fake trading volume , round-tripping can also interfere with technical analysis based on volume data.

This sort of churning behavior differs greatly from the legal open and close transactions of day traders or ordinary investors. After all, every investor ultimately completes a round trip when they buy and later sell a security.

Key Takeaways

• Round-trip trading generally refers to an unethical market-manipulation technique involving a series of wash trades.
• Repeatedly buying and selling securities will inflate trading volume and balance sheet figures to game the activity and interest in a stock.
• Round-trip trading has been seen in several high-profile scandals, including the Enron collapse.

Understanding Round-Trip Trading

Round-trip trading is an attempt to create the appearance of a high volume of trades, without the company behind the security experiencing an increase in income or earnings . These types of trades can be carried out in several ways, but most commonly are completed by a single trader selling and purchasing the security on the same trading day, or by two companies buying and selling securities between themselves. This practice is also known as churning or making wash trades .

Round-trip trading can easily be confused with legitimate trading practices, such as the frequent round-trip trades made by pattern day traders. These traders typically execute many transactions on the same day . However, they do have minimum standards they must practice, such as keeping at least $25,000 of account equity before completing these types of transactions, and reporting their net gains or losses on the transactions as income, rather than pretending gains are investments and losses are expenses.

Another instance of acceptable round-trip trades is a swap trade, where institutions will sell securities to another individual or institution while agreeing to repurchase the same amount at the same price in the future. Commercial banks and derivative products practice this type of trading regularly. But the dynamics of this kind of trading do not inflate volume statistics or balance sheet values.

Example of Round-Trip Trading

One of the most famous instances of round-trip trading was the case of the collapse of Enron in 2001. By moving high-value stocks to off-balance-sheet special purpose vehicles (SPVs) in exchange for cash or a promissory note , Enron was able to make it look like it was continuing to earn a profit while hedging assets on its balance sheets.

These transfers were backed by Enron’s stocks, making the illusion a veritable house of cards waiting to collapse. And collapse it did. In addition to other poor and deceptive bookkeeping practices, Enron was able to fool Wall Street and the public into believing that the company was still one of the largest and most profitably secure institutions in the world when, in fact, it was barely treading water.

The Securities and Exchange Commission (SEC) opened an investigation into the activities and several people were prosecuted and imprisoned. The accounting firm that handled Enron’s bookkeeping also went under because of its participation in the deceit. The firm was found guilty of obstruction of justice by shredding paperwork that would implicate members of the board and high-ranking Enron employees.

U.S. Securities and Exchange Commission. “ Margin Rules for Day Trading .” Accessed May 10, 2021.

U.S. Securities and Exchange Commission. " SEC v. Andrew S. Fastow ." Accessed May 10, 2021.

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Home > Finance > Round Trip Transaction Costs Definition

Round Trip Transaction Costs Definition

Published: January 22, 2024

Learn the definition of round trip transaction costs in finance and understand how they impact investments. Find out how to calculate and minimize these costs for better financial management.

• Definition starting with R

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Understanding Round Trip Transaction Costs

When it comes to finance, there are various concepts and terms that can be confusing. Today, we’re going to dive deep into understanding round trip transaction costs. So, if you’re interested in learning more about this topic, you’ve come to the right place!

Key Takeaways:

• Round trip transaction costs refer to the total expenses associated with buying and selling an investment.
• These costs consist of brokerage fees, commissions, taxes, and other charges.

Now that we know the key takeaways, let’s delve into the definition and explanation of round trip transaction costs.

What are Round Trip Transaction Costs?

Round trip transaction costs can be defined as the total expenses incurred when an investor buys and sells an investment. It’s important to note that these costs go beyond the actual purchase and sale price of the investment.

When you decide to buy or sell securities such as stocks, bonds, or mutual funds, there are various additional expenses involved. These expenses include brokerage fees, commissions, taxes, and other charges. All these costs together make up the round trip transaction costs.

Calculating Round Trip Transaction Costs:

Calculating round trip transaction costs can be a bit tricky as it involves considering multiple factors. Here’s a general breakdown of the various costs to consider:

• Brokerage Fees and Commissions: These are charges imposed by the broker for executing the transaction on your behalf. They are usually a percentage of the trade value or a fixed fee per trade.
• Taxes: Depending on your country’s tax laws, you may need to pay taxes on the gains made from the investment. It’s essential to factor in these taxes when calculating the round trip transaction costs.
• Exchange Fees: If you’re trading on an exchange, there may be additional fees charged by the exchange itself. These fees vary from one exchange to another and can impact your overall round trip transaction costs.
• Spread: The spread is the difference between the buying and selling prices of an investment. It represents the cost the market maker charges for facilitating the transaction. It’s crucial to consider the spread when calculating round trip transaction costs, especially in highly liquid markets.
• Other Charges: Depending on the investment and the broker you’re using, there may be other charges associated with the transaction. These charges can include custody fees, wire transfer fees, or account maintenance fees. Always check the terms and conditions and the fee schedule provided by your broker to ensure you are aware of any hidden charges.

Why Are Round Trip Transaction Costs Important?

Round trip transaction costs are important because they directly impact your overall investment returns. These costs can eat into your profits or increase your losses. By understanding and minimizing these costs, you can improve your chances of achieving better investment results.

Moreover, being aware of round trip transaction costs can also help you evaluate the efficiency of your investment strategy. It allows you to compare the costs associated with different investments or trading strategies and choose the most cost-effective approach.

In Conclusion

Round trip transaction costs are a crucial aspect of investing. Understanding these costs and incorporating them into your investment strategy can help you make more informed decisions and maximize your returns. By considering factors such as brokerage fees, commissions, taxes, and other charges, you’ll have a clearer picture of the overall costs associated with buying and selling investments. So, next time you’re making an investment, remember to factor in the round trip transaction costs.

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Round Trip Transaction Costs

What Are Round Trip Transaction Costs?

Round trip transaction costs allude to all the costs incurred in a securities or other financial transaction. Round trip transaction costs include commissions , exchange fees, bid/ask spreads, market impact costs, and occasionally taxes. Since such transaction costs can dissolve a substantial portion of trading profits, traders and investors endeavor to keep them as low as could really be expected. Round trip transaction costs are otherwise called round turn transaction costs.

How Round Trip Transaction Costs Work

The impact of round trip transaction costs relies upon the asset involved in the transaction. Transaction costs in real estate investment, for instance, can be fundamentally higher as a percentage of the asset compared to securities transactions. This is on the grounds that real estate transaction costs include registration fees, legal expenses, and transfer taxes, as well as listing fees and specialist's commission.

Round trip transaction costs have declined fundamentally throughout the course of recent a long time due to the nullification of fixed brokerage commissions and the multiplication of discount brokerages . Subsequently, transaction costs are at this point not the obstacle to active investing that they were in the past.

The concept of 'round trip transaction costs' is like that of the ' all-in cost ,' which is each cost involved in a financial transaction. The term 'all-in costs' is utilized to explain the total fees and interest included in a financial transaction, like a loan or CD purchase, or in a securities trade.

Round Trip Transaction Costs and Profitability

At the point when an investor trades a security, they might enroll a financial advisor or broker to assist them with doing so. That advisor or broker undoubtedly will charge a fee for their services. At times, an advisor will enroll a broker to execute the transaction, and that means the advisor, as well as the broker, will actually want to charge a fee for their services in the purchase. Investors should factor in the cumulative costs to determine whether an investment was profitable or caused a loss.

Round Trip Transaction Costs Example

Shares of Main Street Public House Corp. have a bid price of $20 and a ask price of $20.10. There is a $10 brokerage commission . In the event that you bought 100 shares, immediately sell all of them at the bid and ask prices above, what might the round-trip transaction costs be?

Purchase: ($20.10 per share x 100 shares) + $10 brokerage commission = $2,020

Deal: ($20 per share x 100 shares) - $10 brokerage commission = $1,990

The round-trip transaction cost is: $2,020 - $1,990 = $30

• The concept of 'round trip transaction costs' is like that of the 'all-in cost,' which is each cost involved in a financial transaction.
• Throughout recent many years, round trip transaction costs have declined fundamentally due to the termination of fixed brokerage commissions, yet at the same time remain a factor to think about in purchasing a security.
• Round trip transaction costs allude to all the costs incurred in a financial transaction, for example, commissions and exchange fees.

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Sometimes known as round trip transactions or by the fanciful designation of Lazy Susans, round-tripping is a strategy in which an asset is sold to another business with the agreement that the asset will be repurchased by the original owner at some point in the future. This process is sometimes used as a means of increasing the apparent amount of sales and revenue generated by the seller during a specific financial period. While a relatively common process, not everyone in the financial community considers this a proper method of doing business.

Typically, round-tripping involves the sale of an asset that is not essential to the core operation of the business. Since the asset is more or less unused, the temporary sale strategy will not impact the function of the business in any manner. It will allow the business to count the proceeds from the sale as part of the revenue that is generated for the period in which the transaction takes place. As a result, the company can claim to have higher sales volume, a fact that is likely to attract more attention from investors as well as raise the business’s public profile among consumers.

Key to the process of round-tripping is the agreement to repurchase the sold asset at some future point. Often, the repurchase is for the same asset, although in some cases, an asset of similar type and value may be substituted. In terms of the repurchase price, the original owner may pay the same amount that was accepted for the initial sale, or possibly pay slightly more, depending on the terms agreed upon by the two businesses.

There are dangers associated with the use of round-tripping. One is that a company can become so involved with this sort of activity that it becomes extremely difficult to determine what portion of the generated revenue is from actual sales and what is generated through the use of Lazy Susans. In addition, the repurchase aspect of the strategy can sometimes create a degree of financial hardship for the business that exceeds any benefits derived from the original sale. Some investors choose to not deal with companies known to engage in frequent round-tripping as a matter of personal conscience.

Many different types of companies have made use of round-tripping in the past. A number of manufacturing companies have engaged in this type of asset bartering , as have many energy trading conglomerates. In recent years, prominent Internet providers and related businesses have also made use of this type of financial strategy. This has led some regulatory agencies, such as the Securities and Exchange Commission in the United States, to determine that counting revenues from these types of transactions among sale figures is misleading and therefore improper.

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What is a Round Trip Transaction?

Round trip transaction refers to the total incurred cost in a securities or similar financial transaction. Round trip transactions ultimately increase money flow in the market during the recession. These transactions also increase liquidity in an adverse market situation. You can use round-trip transactions in standard tax planning programs.

Round Trip Transaction Examples

Examples of the round trip transaction include:

• Example 1: Exchange fees
• Example 2: Commissions
• Example 3: Market impact costs
• Example 4: Bid or Ask spreads
• Example 5: Occasional taxes

Here is a comprehensive article about the round trip transaction.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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Round-trip transactions costs

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What Is A Round-Trip Transaction?

Companies in New York have become quite proficient at limiting their tax burdens. Some of these strategies are legal, and some are not. While taking advantage of loopholes in the system can sometimes be extremely rewarding, you need to steer clear of any illegal activity. If you are caught evading taxes illegally, you may face considerable consequences. One of these illegal strategies is a “round-trip transaction.” But what exactly is a round-trip transaction, and why is it illegal?

A Real-Life Example of a Round-Trip Transaction  

To understand what a round-trip transaction actually looks like, it is helpful to examine a real-world example. On November 28th of 2022, it was reported that the CEO of Iconix Brand Group had been found guilty of accounting fraud. The scheme helped Iconix Group inflate its revenue and earnings per share through false filings made with the SEC. In the words of one US attorney, he “cooked the books.”

The CEO was specifically accused of orchestrating a string of “round-trip” transactions. These involved inducing another company to pay artificially inflated buy-in purchases. The CEO then promised this company that they would eventually be reimbursed in full for these purchases. This is a classic example of a “round-trip” transaction, and it helped the CEO artificially inflate the value of his company. This private agreement was hidden from the company’s lawyers and outside auditors.

As a result, the CEO was convicted of one count of securities fraud, six counts of making false filings with the SEC, and one count of improperly influencing the conduct of audits. Each of these counts carries a maximum prison sentence of 20 years. So to answer the question: Yes, you can go to prison for making round-trip transactions.

The Definition of a Round-Trip Transaction  

Investopedia defines a round-trip transaction – otherwise known as “round-tripping” as an unethical practice that involves “purchasing and reselling shares of the same security over and over again in an attempt to manipulate observers into believing that the security is in higher demand than it actually is.” They also note that this practice has led to the complete collapse of several high-profile companies, including Enron.

Wikipedia gives a broader definition, stating that round-tripping can involve virtually any asset being sold with an agreement to buy it back. This might include stocks, products, and much more.

Where Can I Find a Qualified, Experienced Criminal Defense Attorney in New York?  

If you’ve been searching for a qualified, experienced New York criminal defense attorney , look no further than Phillip J. Murphy, Attorney at Law. Over the years, we have helped defendants fight a range of charges. We know that tax evasion and fraud charges have the potential to completely ruin your reputation and send you to prison. With our help, you can avoid these potential consequences at all hazards. Book your consultation today to get started with an effective defense strategy.

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Dont Be Fooled: Key Red Flags in Round-Tripping Strategies

Understanding Round-Tripping in Financial Fraud

When it comes to financial fraud, one deceptive strategy that can be employed is round-tripping. Understanding the concept of round-tripping and its consequences is crucial for professionals working in compliance, risk management, anti-money laundering, and anti-financial crime.

What is Round-Tripping?

Round-tripping refers to a fraudulent practice where two entities engage in a series of transactions that create an appearance of legitimate business activity, while in reality, they are merely exchanging the same money or assets back and forth. This deceptive technique can be employed to inflate revenues, create fictitious transactions, or manipulate financial statements. By engaging in round-tripping, companies can present a misleading picture of their financial health to stakeholders, investors, and regulators.

Round-tripping can occur in various industries and sectors, including accounting, capital markets, and trading. In accounting, round-tripping involves inflating revenues or manipulating financial metrics through fictitious transactions. This practice can mislead investors and stakeholders about the company’s financial health. For example, a company involved in round-tripping might create fictitious sales or engage in circular transactions with related parties to artificially boost its revenue figures ( Small Business – Chron ).

Consequences of Round-Tripping

Engaging in round-tripping can have severe consequences for the companies involved. Regulatory authorities and law enforcement agencies closely monitor financial transactions to detect fraudulent activities. Companies found to be engaging in round-tripping may face legal and financial repercussions. These can include regulatory investigations, lawsuits, financial penalties, and significant damage to the company’s reputation and relationships with stakeholders.

Furthermore, round-tripping can result in misleading financial statements, which can lead to investment decisions based on false information. Investors may be deceived by inflated revenues and profits, potentially leading to financial losses. Once the truth behind the round-tripping scheme is uncovered, the company’s reputation and financial health may suffer, impacting its ability to attract investors and maintain business relationships.

To effectively combat round-tripping and other forms of financial fraud, it is crucial for professionals to be aware of the red flags and indicators associated with such activities. By recognizing these warning signs and implementing appropriate preventive measures, companies can safeguard themselves against the detrimental effects of round-tripping and maintain financial transparency and integrity.

Red Flags and Indicators of Round-Tripping

Round-tripping, a deceptive accounting practice, can be a red flag for financial statement fraud. It involves artificially inflating revenues or creating fictitious transactions to manipulate financial metrics, which can mislead investors and stakeholders about a company’s financial health ( Small Business – Chron ). Detecting round-tripping requires a keen eye for certain red flags and indicators. Here are some key signs to watch out for:

Unusually Consistent Revenue Growth

One red flag of round-tripping is unusually consistent revenue growth. While steady growth is expected in a healthy business, abnormally consistent revenue patterns might be an indication of artificial manipulation. Round-trippers may artificially inflate revenues to create an illusion of sustained growth.

High Volume of Sales with Minimal Change in Receivables

Another red flag is a high volume of sales with minimal change in receivables. In normal business operations, increased sales are typically accompanied by an increase in receivables. However, in round-tripping scenarios, sales may be artificially boosted without a corresponding increase in receivables. This discrepancy suggests potential fictitious transactions or the manipulation of sales figures.

Repeated or Cyclical Transactions with the Same Counterparty

Repeated or cyclical transactions with the same counterparty can also raise suspicions of round-tripping. Genuine business transactions often involve a variety of counterparties. However, if a company engages in a series of transactions with the same counterparty, especially in a repetitive or cyclical manner, it may be an attempt to inflate sales artificially.

Significant Increase in Sales Near the End of a Reporting Period

A significant increase in sales near the end of a reporting period can be a red flag for round-tripping. Companies engaging in this practice may try to manipulate financial statements to meet targets or impress investors. By recording a sudden surge in sales just before the reporting period ends, they create the appearance of strong performance.

Unusually High Inventory Levels

Unusually high inventory levels can be indicative of round-tripping. Companies involved in this fraudulent practice may artificially inflate their inventory levels to support fictitious sales transactions. By maintaining excessive inventory, they can create the illusion of high demand or robust business activity.

Low Gross Margins

Low gross margins can also raise suspicions. Round-tripping may involve selling products or services at lower prices, resulting in reduced profit margins. This strategy is used to generate higher sales volume and revenue figures, creating the appearance of a thriving business. However, it can be a red flag for potential financial statement fraud.

Cash Flow Inconsistencies

Inconsistent cash flows can be another red flag. Round-tripping transactions often involve the movement of funds between accounts to create the appearance of legitimate business activity. As a result, cash flows may exhibit irregularities or inconsistencies that warrant further scrutiny.

To detect round-tripping activities, auditors and investigators analyze sales patterns, review receivables and revenue, scrutinize transactions with related parties, assess inventory levels, and examine cash flow activities. By paying close attention to these red flags and conducting thorough investigations, companies can identify potential instances of round-tripping and take appropriate action to safeguard their financial integrity and reputation.

Detecting Round-Tripping Activities

To identify potential round-tripping activities and detect red flags associated with this deceptive practice, auditors and investigators must carefully analyze various aspects of a company’s financial records. By scrutinizing sales patterns, reviewing receivables and revenue, examining transactions with related parties, assessing inventory levels, and examining cash flow activities, professionals can uncover irregularities and signs of round-tripping.

Analyzing Sales Patterns

Analyzing sales patterns is a crucial step in detecting round-tripping activities. Auditors and investigators should look for unusual fluctuations or consistent growth in sales that may not align with the company’s industry norms or market conditions. Unusually consistent revenue growth, especially when accompanied by other red flags, can be indicative of potential round-tripping ( Small Business – Chron ).

Reviewing Receivables and Revenue

Reviewing receivables and revenue is essential to identify discrepancies and potential round-tripping schemes. Auditors should compare the amount of receivables to the reported revenue and assess whether there is a high volume of sales with minimal change in receivables. Significant inconsistencies between the two figures may raise suspicions of fictitious transactions or round-tripping ( My Accounting Course ).

Scrutinizing Transactions with Related Parties

Transactions with related parties can be an area where round-tripping occurs. Auditors should carefully review and scrutinize such transactions to identify any signs of round-tripping. Repeated or cyclical transactions with the same counterparty, especially when they lack a clear business purpose, can be regarded as red flags of potential round-tripping.

Assessing Inventory Levels

Assessing inventory levels in relation to sales can provide insights into potential round-tripping activities. Unusually high inventory levels, particularly when there is no corresponding increase in sales volume, can indicate the presence of fictitious or inflated transactions. Auditors should carefully examine the correlation between inventory levels and reported sales figures ( My Accounting Course ).

Examining Cash Flow Activities

Examining cash flow activities is crucial in detecting round-tripping. Auditors should pay close attention to cash flow inconsistencies, such as significant increases in sales near the end of a reporting period without a proportional increase in cash receipts. Discrepancies between reported cash flows and the underlying transactions can be indicative of round-tripping schemes ( SuperfastCPA ).

By thoroughly analyzing sales patterns, reviewing receivables and revenue, scrutinizing transactions with related parties, assessing inventory levels, and examining cash flow activities, professionals can identify potential round-tripping activities and take appropriate measures to address them. Implementing internal controls, conducting thorough audits, and performing due diligence are essential steps to prevent, detect, and mitigate the risks associated with round-tripping ( My Accounting Course ).

Round-Tripping in Capital Markets

Round-tripping in the capital markets is a form of financial fraud that involves various techniques to manipulate financial transactions and create the appearance of legitimate activity. Understanding the red flags associated with this practice is essential for regulatory and compliance professionals. In this section, we will explore some common red flags and indicators of round-tripping in capital markets.

Tax Evasion and Foreign Direct Investment

One of the most prevalent forms of round-tripping in capital markets is associated with tax evasion and Foreign Direct Investment (FDI). This scheme occurs when investments are channeled through a jurisdiction with low or no taxes before being reinvested in the originating economy. Mauritius, for example, has been highlighted as a destination where billions of dollars are round-tripped annually from India and emerging African nations ( Anti Money Laundering Law ). Detecting this type of round-tripping requires close scrutiny of cross-border transactions and the identification of unusual investment patterns.

Use of Shell Companies

The use of shell companies is another common tactic in round-tripping schemes. Shell companies are entities with no real business operations or assets, intentionally created to transfer funds between entities. This strategy makes it challenging for regulators or tax authorities to trace the origin or destination of funds, and can be utilized to inflate revenues or profits. It is crucial to thoroughly examine the relationships between entities and conduct enhanced due diligence to identify the involvement of shell companies ( LinkedIn ).

Falsified Invoices or Receipts

Falsified invoices or receipts are frequently employed in round-tripping schemes. This deceptive practice involves creating invoices or receipts for goods or services that were never actually purchased or sold. These fabricated documents are used to justify the transfer of funds, inflate revenues, overstate expenses, or evade taxes. The construction industry is particularly susceptible to this type of round-tripping activity, making it essential to scrutinize the authenticity of invoices and receipts.

Fictitious Loans or Investments

Another method of round-tripping in capital markets involves the creation of fictitious loans or investments. This scheme typically occurs when a company lends money to a shell company, which then lends it back to the original company. By creating the appearance of a legitimate loan or investment, round-trippers can manipulate financial statements, inflate assets, understate liabilities, or evade taxes. It is crucial to conduct thorough due diligence on loan agreements and investment transactions to detect this type of fraudulent activity ( LinkedIn ).

By being aware of these red flags and indicators of round-tripping in capital markets, compliance professionals can enhance their ability to detect and prevent financial fraud. Robust internal controls, thorough audits, and diligent scrutiny of financial records are essential to safeguard against these deceptive practices. Ongoing monitoring of financial performance and staying updated on the latest money laundering techniques are also crucial for effectively combating round-tripping in capital markets.

Preventing and Mitigating Round-Tripping

To combat the risks associated with round-tripping, it is crucial for organizations to implement robust preventive measures and mitigation strategies. By establishing internal controls, conducting thorough audits, segregating duties, performing due diligence, and establishing appropriate controls, financial professionals can significantly reduce the occurrence and impact of round-tripping.

Implementing Internal Controls

Implementing strong internal controls is a fundamental step in preventing and detecting round-tripping activities. Internal controls help establish a system of checks and balances, ensuring that transactions are properly authorized, recorded, and reviewed. By implementing internal control measures, organizations can mitigate the risk of fraudulent activities, including round-tripping.

Key internal control measures to consider include:

Segregation of Duties: Segregating duties is a critical control measure that helps prevent collusion or fraud. Different individuals should handle the initiation, approval, and recording of transactions. For example, those approving invoices should not have the authority to initiate payments. This segregation ensures that multiple individuals are involved in the transaction process, reducing the risk of fraudulent activities ( LinkedIn ).

Authorization and Approval Procedures: Implementing clear authorization and approval procedures is essential to ensure that all transactions undergo appropriate scrutiny. By establishing a hierarchical approval process and requiring proper documentation, organizations can reduce the likelihood of unauthorized or fraudulent transactions.

Regular Monitoring and Review: Ongoing monitoring and review of financial transactions and processes are crucial to detect any unusual patterns or discrepancies. Regular reviews of financial records, such as sales patterns, receivables, inventory levels, and cash flows, can help identify potential round-tripping activities ( LinkedIn ).

Conducting Thorough Audits

Thorough audits play a vital role in detecting and deterring round-tripping activities. Regular and comprehensive audits provide an independent assessment of an organization’s financial records, controls, and processes. Audits help identify any inconsistencies, errors, or potential fraudulent activities, including round-tripping.

During audits, financial professionals should:

Review Financial Transactions: Auditors should thoroughly review financial transactions, paying close attention to sales patterns, receivables, and revenue recognition. By examining the details of transactions, auditors can identify any irregularities or suspicious activities.

Scrutinize Related Party Transactions: Transactions involving related parties should receive additional scrutiny during audits. Auditors should thoroughly examine the terms, purpose, and nature of these transactions to ensure they are legitimate and not part of a round-tripping scheme.

Assess Internal Control Effectiveness: Auditors should assess the effectiveness of internal controls in preventing and detecting round-tripping activities. This includes reviewing the segregation of duties, authorization procedures, and monitoring mechanisms.

Segregating Duties

Segregation of duties is an essential control measure to reduce the risk of round-tripping. By separating the functions of initiating, approving, and recording transactions, organizations can minimize the potential for collusion or fraud. For example, individuals responsible for approving invoices should not have the authority to initiate payments. Segregating duties ensures that multiple individuals are involved in the transaction process, reducing the risk of fraudulent activities ( LinkedIn ).

Performing Due Diligence

Performing due diligence is a critical step in preventing round-tripping. Financial professionals should conduct thorough background checks, site visits, or other verification measures to ensure the legitimacy of entities involved in transactions. This includes verifying the identity, ownership, and business purpose of new entities before engaging in transactions with them. Due diligence helps identify any potential risks or red flags associated with round-tripping activities ( LinkedIn ).

Establishing Appropriate Controls

Establishing appropriate controls is essential in preventing and detecting round-tripping in financial transactions. This includes implementing measures such as:

Documenting Policies and Procedures: Clearly documenting policies and procedures related to financial transactions helps ensure consistency and transparency. These guidelines should address the identification and prevention of round-tripping activities.

Implementing Transaction Monitoring Systems: Utilizing advanced technology and software solutions, organizations can monitor financial transactions in real-time. These systems can identify suspicious patterns, flag potential round-tripping activities, and generate alerts for further investigation.

Conducting Regular Training and Awareness Programs: Organizations should provide regular training and awareness programs to employees, educating them about the risks associated with round-tripping and promoting a strong ethical culture. By fostering a culture of integrity and compliance, organizations can reduce the likelihood of round-tripping activities.

By implementing these preventive measures and mitigation strategies, financial professionals can protect their organizations from the detrimental impact of round-tripping. It is essential to remain vigilant, conduct regular assessments, and adapt controls as necessary to stay ahead of evolving financial fraud schemes.

Red Flags and Indicators of Round-Tripping in Trading Activities

When it comes to identifying potential round-tripping activities in trading, there are several red flags and indicators that professionals in compliance, risk management, anti-money laundering , and anti-financial crime should be aware of. These indicators can help in detecting potential market manipulation and fraudulent schemes. Here are some key red flags to watch out for:

Nonsensical Round-Trip Trading Volumes

Nonsensical round-trip trading volumes can be a significant red flag indicating potential market manipulation through wash trades. These trades involve buying and selling the same financial instrument at the same price or a very similar price, with the intention of creating false transaction volumes or influencing the market ( WallStreetMojo ). Unusually high trading volumes with no apparent economic purpose or justification should be thoroughly investigated.

Round-Tripping with Related Parties

Round-tripping with related parties is another red flag that deserves scrutiny. In such cases, trading activities occur between entities that have a close relationship, such as subsidiaries, affiliates, or entities under common control. This type of round-tripping can create false demand for a company’s stock and artificially inflate its value ( WallStreetMojo ). It is important to investigate the nature of these transactions and assess whether they are conducted arms-length or involve collusive activities.

High-Frequency Round-Tripping

High-frequency round-tripping, where a large number of trades are executed within a short period, can also be indicative of potential market manipulation. Rapid buying and selling of securities can artificially inflate trading volumes, create false market activity, and mislead investors. Monitoring and analyzing trading patterns can help identify such suspicious activities.

Frequent Round-Tripping by the Same Party

Another red flag is frequent round-tripping by the same party. This can be seen in cases where an individual or entity repeatedly engages in round-tripping transactions, potentially to manipulate stock prices or financial statements. Pump-and-dump schemes, where the price of a security is artificially inflated before being sold off, are examples of frequent round-tripping activities that require attention.

Non-Arms Length Round-Tripping

Non-arms length round-tripping, which occurs when parties collude to create misleading financial statements or engage in fraudulent activities, is another significant red flag. This type of round-tripping involves transactions between entities that have a close relationship and can be used to manipulate financial records or misrepresent the true nature of transactions. Proper due diligence and scrutiny of such transactions are crucial to identify and prevent such activities.

By being aware of these red flags and indicators, professionals can enhance their ability to detect potential round-tripping activities in trading. Thorough scrutiny of financial records, due diligence, and monitoring of financial performance are essential in identifying and mitigating the risks associated with round-tripping. Implementing robust internal controls, conducting regular audits, and establishing appropriate checks and balances are also crucial in safeguarding against these fraudulent practices.

Safeguarding Against Round-Tripping

To protect against the risks associated with round-tripping and other fraudulent schemes, it is essential to implement effective safeguards. Thorough scrutiny of financial records, conducting due diligence, and monitoring financial performance are crucial steps in preventing and detecting round-tripping activities.

Thorough Scrutiny of Financial Records

One of the key ways to safeguard against round-tripping is through a meticulous examination of financial records. By carefully analyzing financial statements, investors can identify red flags and patterns that may indicate fraudulent practices. This scrutiny involves reviewing financial data such as revenue, expenses, receivables, and cash flow activities.

By assessing the consistency and accuracy of these records, discrepancies or anomalies can be identified. Unusual revenue growth, low gross margins, cash flow inconsistencies, and significant increases in sales near the end of a reporting period are some red flags that may indicate potential round-tripping activities. For a comprehensive list of money laundering red flags, refer to our money laundering red flags checklist .

Conducting Due Diligence

Conducting thorough due diligence is another critical step in safeguarding against round-tripping. By researching and verifying the background, ownership, and business purpose of entities involved in transactions, investors can mitigate the risk of falling victim to fraudulent schemes. This includes performing background checks, site visits, and assessing the reputation and integrity of the parties involved.

Due diligence helps to ensure that the entities are legitimate and have a genuine business purpose. It also helps in identifying any related parties or connections that may raise suspicions. By diligently assessing the authenticity and credibility of the parties involved, investors can make informed decisions and reduce the risk of being involved in fraudulent activities. For more red flags and indicators related to customer behavior, refer to our article on red flags in customer behavior .

Monitoring Financial Performance

Regularly monitoring the financial performance of a company is crucial in detecting potential round-tripping activities. By closely analyzing revenue patterns, receivables, inventory levels, and cash flow activities, investors can identify inconsistencies or unusual patterns that may indicate fraudulent practices.

Unusually consistent revenue growth, high volumes of sales with minimal change in receivables, and repeated or cyclical transactions with the same counterparty are among the indicators of potential round-tripping. It is important to establish benchmarks and compare the financial performance of the company against industry standards and competitors. Any significant deviations should be thoroughly investigated. For more information on red flags in financial transactions, refer to our article on red flags in financial transactions .

By implementing these safeguards and maintaining a vigilant approach to financial transactions, individuals and organizations can protect themselves from falling victim to round-tripping and other fraudulent activities. It is important to stay informed about common money laundering techniques and be proactive in identifying and reporting suspicious transaction indicators to the relevant authorities.

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I Scored Spirit’s Big Front Seat for Just $40 Round-Trip — Here’s How

Brett Holzhauer

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Table of Contents

My successful upgrade on spirit airlines, how to beat budget airlines at their own game, final thoughts.

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Spirit Airlines can fall on the wrong end of many jokes and news headlines, and for good reason. Despite this, I’ve been flying the big yellow bus in the sky a bit more in recent months and have learned more about its intricacies and customer experience.

On a quick trip from my home of Fort Lauderdale, FL (FLL) to Cancun, Mexico (CUN), I decided to run a few experiments.

In the days before each flight, I was offered the opportunity to bid on its “Big Front Seat,” located at the front of the aircraft, and scored a pretty inexpensive ride to and from home. Here’s how I did it.

Spirit Airlines is well known for nickel-and-diming its customers along the way. These fees can be for carry-on bags (which I easily avoid by using my backpack as a personal item ), picking a seat onboard, buying drinks onboard, or even printing a boarding pass at the airport.

But if you’re a diligent traveler, you can dodge these fees altogether. For instance, I never selected a seat while booking my flight. Since each flight was only 90 minutes, I figured I would be fine in any seat onboard.

But a few days before the flight, I received an email to bid on sitting at the front of the plane.

Spirit Airlines doesn’t have a true first class product, but it does have the Big Front Seat. The service is the same during the flight, but you simply get a bigger, more comfortable chair.

Bidding on Spirit’s Big Front Seat

When you bid on a seat, the email gives you a barometer to pay anywhere from $20 to $250. Because my flight was so short, I bid the $20 minimum.

A few days before takeoff, I was approved for the $20 bid on my Fort Lauderdale to Cancun flight. However, the return home flight was where things got interesting.

When I bid the $20 minimum (again), I was told I was outbid, which was fine by me as I wasn’t willing to spend more than that. However, when I checked the Spirit app again at the airport, I was approved to sit up front again.

I’m still unsure how that happened, but for a mere $40 round-trip, I got a much more comfortable experience to and from Mexico . Next time you fly with Spirit, don’t overlook bidding as you may be able to upgrade your next flight for as little as $20.

If you decide to book a flight with Spirit or any of its ultra-low-cost competitors, there are several things to remember.

First, these airlines are avidly looking for any way to generate additional revenue after you book that ticket. If I’m choosing to fly on a budget airline, I’m trying to keep more money in my pocket by avoiding any of their upcharges.

Here are a few of our expert tips to dodge these fees:

• Avoid upsells. When you book your flight, you will be served a seemingly endless number of offers, such as rental cars, hotels, help at the airport, travel insurance , and more. Simply say no.
• Travel as lightly as possible. These airlines are notorious for expensive baggage fees and seat assignment charges. These fees can negate any potential savings from flying with a regular airline.
• Be flexible with the seat you get. Budget airlines love to charge extra for seat assignments. Try your best to avoid this add-on. And if you’re particular about where you sit, consider approaching the gate agent and asking politely for a different seat assignment to see if they can move you.
• BYOD. Drinks onboard can be extremely expensive. The best way to avoid this is to bring a refillable water bottle and find somewhere in the airport to refill it before boarding — and the same rule goes for snacks!

You should sign up for Spirit’s loyalty program, Free Spirit , to earn Spirit points . You can also double-dip your rewards by booking flights with a travel credit card like the Chase Sapphire Preferred ® Card .

Despite struggling financially, Spirit delivers great value to consumers looking for a no-frills experience getting from A to B. If you decide to book with Spirit, it’s best to keep your expectations in line and have a game plan for avoiding the airline’s infamous list of fees.

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About Brett Holzhauer

Brett is a personal finance and travel junkie. Based out of Fort Lauderdale, he’s had over 100 credit cards and earned millions of credit card rewards. He learned the tricks of the trade from his mom, and has taken many steps forward. He wasn’t exposed to much travel as a kid, but now has a goal of reaching 100 countries in his life. In 2019, he sold all of his possessions to become a digital nomad, and he says it was one of the best decisions he ever made. He plans to do it again at some point in his life.

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What it's really like flying Long Island MacArthur-Florida for $56 round-trip

How bad was this spring? So cold, so rainy, that taking advantage of those cheap flights to Florida from Islip’s Long Island MacArthur Airport was necessary, even if it was for just 24 hours of sun, sand, turquoise waters and giant margaritas. Here's how it went:

Tuesday, 8:30 a.m.: Taking off

Hop on a Frontier Airlines flight to Fort Lauderdale from Long Island MacArthur Airport in Ronkonkoma. Credit: Barry Sloan

If I’d been flying from JFK or LaGuardia, I would never have risked arriving at the airport just a over an hour before departure, but this was Islip, where there’s lots of parking just a few feet from the terminal, no traffic snarls, and lines to go through security are almost nonexistent. MacArthur is nothing less than the airport of your dreams, perhaps Long Island’s greatest aviation achievement since Charles Lindbergh took off from Roosevelt Field. It’s also where some of the most deeply discounted flights to Florida can be found, like the one I took on Frontier Airlines to Fort Lauderdale. I boarded at 9:01 a.m., the aircraft door was closed by 9:31 and the plane actually left on time, at 9:43. Perhaps because of the pleasant fares and MacArthur’s relaxed atmosphere, I found my fellow passengers to be unusually pleasant and relaxed as well, freely exchanging seats so couples could sit together, chatting happily with strangers and the like.

Somewhat unbelievably, I paid just $56 for a round-trip ticket on a weekday morning, although for that price I forfeited the right to choose my own seat or check a bag or even bring along a carry-on. Indeed, I was only allowed a single personal item, defined as an object no more than 14” x 18” x 8” including handles, wheels and straps, and which I define as something roughly equivalent to a Hello Kitty backpack.

Minutes after takeoff we were over Great South Bay and Fire Island, and a short two hours after that we descended into Fort Lauderdale-Hollywood International Airport, the captain announcing that the weather there was “a balmy 88 degrees,” and that we would not be arriving at 12:57 p.m., as scheduled, but 20 to 30 minutes early. When we landed even earlier than that, at 12:23, passengers burst into applause.

1:20 p.m.: Arrive at the beach

Soak up the sun on the beach or take a dip in the ocean in Ft. Lauderdale, FL. Credit: Getty Images/BluIz60

Car rentals are cheap in Florida, but seem unnecessary for a one-day trip, so I opted for an Uber instead ($25) for the 20ish-minute ride to Fort Lauderdale Beach. The driver dropped me off at Sebastian Street Beach , which — like every other beach on the famed strip — was clean, uncrowded and monitored by lifeguards. Less than four hours after leaving Long Island, I was splashing around in 82-degree turquoise waters.

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3 p.m.: Hotel check-in

A king room at the Drift Hotel, just steps from Fort Lauderdale’s beach. Credit: Newsday/Scott Vogel

Staying on Fort Lauderdale Beach (which is actually on a barrier island connected by causeways to the city proper) puts surf, sand, food and drink all within walking distance — essential for short excursions like mine. And while most travelers opt for chain hotels, some of Lauderdale’s smaller, individually owned properties are not only cheaper but just as close to the beach. I stayed at the Drift (3005 Alhambra St., 954-774-2061, thedrifthotel.com ), which offered little more than a bed and a TV, but cost just $91 total via Priceline in May. And although I didn’t stay at them, other properties nearby with rooms less than $150, depending on date, include the Snooze Hotel (205 N. Fort Lauderdale Beach Blvd., 954-761-9933, takeasnooze.com ) and Sea Beach Plaza (3081 Harbor Dr., seabeachplazafortlauderdale.com ).

4 p.m.: Happy hour!

A margarita, chips and guacamole at The Drunken Taco across the street from Fort Lauderdale beach. Credit: Newsday/Scott Vogel

So numerous are the establishments that offer it, day drinking is almost a requirement on Fort Lauderdale Beach, where definitions of happy hour are appropriately expansive. At the Tex-Mex eatery The Drunken Taco (201 Fort Lauderdale Beach Blvd., 954-463-7209, drunken-taco.com ) happy hour is an all-day affair, with 21-ounce goblets of margaritas going for $9.95, and quesadillas and chicken wings similarly cheap ($12.95). Rum cocktails at farm-to-table Burlock Coast (1 N. Fort Lauderdale Beach Blvd., 954-302-6460, burlockcoast.com ), cost $10 from 5 to 7 p.m. and nightly specials include $20 burgers and beer (Mondays), two tacos and a marg (Tuesdays) and more. And while I didn’t visit the aptly named Fort Liquordale on the Beach (17 S. Fort Lauderdale Beach Blvd., fortliquordale.com ), the new hot spot serves $3 shots during “happy minutes” at the tops of certain hours, as well as $5 well drinks and beer whenever it rains.

5:30 p.m.: Cruising to dinner

Scoobies, aka crab craws marinated in a garlic broth, are a specialty at Coconuts in Fort Lauderdale. Credit: Newsday/Scott Vogel

You don’t want to be tipsy when you rent from Broward BCycle  ( broward.bcycle.com ), where e-bikes go from 0 to 12 miles per hour in a ridiculously short amount of time — there’s no better way to get around. Not only is the app user-friendly, there are docking stations up and down the beach, most well-stocked with pastel-colored cruisers you can rent for $7.49 per half-hour. Within minutes, I was gliding down one of Lauderdale’s well-marked bike lanes on the way to dinner at Coconuts (429 Sea Breeze Blvd., 954-525-2421, coconutsfortlauderdale.com ), where I enjoyed the house specialty, scoobies — blue crab claws swimming in a garlicky, buttery broth (market price, I paid $27)--along with a wonderful platter of coconut shrimp ($24). I would have been equally satisfied with perhaps the most beautiful dish in the ’Dale, lobster-heavy Omar’s Paella cooked in a giant skillet just off the parking lot ($42).

6:45 p.m.: Cycling the city

Back on my e-bike, I headed for the nearest causeway over the Intracoastal Waterway and Las Olas Blvd. , a nightlife center on the mainland. Along the way, I pedaled the intricate and dazzling system of canals from which Fort Lauderdale derives its nickname, Venice of America. First dredged in the 1920s and a jaw-dropping 165 miles long, the canals are lined with million-dollar homes and the gigantic yachts that accompany them, and full of lots of pedestrian- and bike-friendly bridges and streets, even a few water taxis and gondolas.

Las Olas Boulevard is a popular thoroughfare in Ft. Lauderdale, Florida. Credit: Getty Images/Torresigner

The area was beautiful at sunset, as was famed Las Olas Blvd., lined as it  was with restaurants, galleries and boutiques, and where live music boomed out of big, crowded spots like Cuba Libre (800 E. Las Olas Blvd., 954-314-6500, cubalibrerestaurant.com ), which plays Latin favorites in an open-air setting, and Voodoo Bayou (715 E. Las Olas Blvd., 954-314-0669, voodoobayou.com ) a Cajun concern that also boasts music most nights.

My last stop that night was the Riverwalk , which, like the canals, is fed by the New River, a charming, wonderfully landscaped promenade (some of it recently completed) that winds its way past condo towers, sidewalk cafes and parklets, along with cultural institutions like the Broward Center for Performing Arts (201 SW Fifth Ave., 954-462-2222, browardcenter.org ) and the kid-centric Museum of Discovery and Science (401 SW Second St., 954-467-6637, mods.org ).

By then it was 11 p.m. and my legs were about to fall off, so I headed back over the causeway for a nightcap at the unmissable Elbo Room beach bar (241 S. Fort Lauderdale Beach Blvd., 954-463-4615, elboroom.com ), a cash-only, food-less establishment that opened in 1938, was long ago featured in movies like “Where the Boys Are,” and apparently features live music from 11 a.m. to infinity daily.

Wednesday, 7 a.m.: Breakfast on the beach

Carnitas hash with poached eggs at Lona Cocina & Tequileria on Fort Lauderdale beach.  Credit: Newsday/Scott Vogel

Up bright and early so I could watch the sunrise over the ocean and get a good seat on the veranda, I sauntered over to Lona Cocina & Tequileria at the Westin Hotel (321 N. Fort Lauderdale Beach Blvd., 954-245-3069, lonarestaurant.com ) which, that name notwithstanding, is a terrific place for breakfast, especially if you’re partial to terrific poached eggs with carnitas smothered in a chipotle hollandaise ($15) and equally terrific waterfront views.

9 a.m., Bidding farewell to the ocean and more

My 24-hour odyssey drawing to a close, I couldn’t resist heading back to Sebastian Street for one last swim, one last bike ride through the canals and the Riverwalk, and one last fruity cocktail at Lulu’s Bait Shack (17 S. Atlantic Blvd., 954-463-7425, lulusbaitshack.com ), along with an irresistible basket of conch fritters served with a sweet Thai chile sauce ($17).

12:15 p.m., Homeward bound

Fort Lauderdale’s airport being just a tad bigger than Islip’s, I gave myself a bit more time, hiring an Uber to get me at the terminal at 12:40 p.m. I easily made my 1:57 flight, my 36-hour trip coming to a close when Frontier landed on Long Island at 5:05 p.m. After such a whirlwind, did I need a vacation from my vacation? Of course. But as soon as my plane touched down in rainy Islip, I was ready to do it all over again.

Bargain Flight Travel Tips

For the most up-to-date information on most airlines’ fares, consult Google Flights ( flights.google.com ) and plan on booking your trip at least one week in advance. (As of this writing, there were no fewer than 14 days in the month of June offering round-trip fares to Fort Lauderdale for less than $100, and one for as little as $52.) As for hotels, blind-booking online travel agencies like Priceline and Hotwire are a good first stop, but don’t choose hastily, as advertised prices do not include taxes or resort fees, both of which can add significantly to the cost of a stay.

Newsday writer and restaurant critic Scott Vogel aims for a refreshing, gimlet-eyed take on the Long Island food scene, often while drinking a refreshing gimlet. 

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Aplazo is using buy now, pay later as a stepping stone to financial ubiquity in Mexico

Buy now, pay later services have become so ubiquitous that BNPL may as well just be another way to say “debt.” But in Mexico, where BNPL platform Aplazo operates, a large underbanked population makes BNPL more like an alternative to cash.

The four-year-old Mexican fintech startup facilitates fractionated payments to offline and online merchants even when the buyer doesn’t have a credit card.

To the end users, Aplazo offers a virtual card that lets them buy now and pay later in many stores. A recent $45 million Series B round led by QED Investors should help it further expand its reach, both virtual and physical.

While BNPL is often associated with online merchants, e-commerce is still limited in Mexico, and Aplazo says that in-store transactions account for more than half of its business. Offering this option is a way for stores to increase sales and loyalty, and it seems to work: The company reports its revenue tripled in the past year. 

Mike Packer, the partner in charge of Latin America at QED, highlighted Aplazo’s progress to date in a conversation with TechCrunch. “There’s a huge competitive advantage in the network and product that they built. They’ve been able to have lots and lots of transactions, a significant amount of data, relationships with almost 10,000 merchants… All of that continues to compound over time.”

The company has also been able to use data and technology to limit credit loss despite its growth, Aplazo CEO Angel Peña told TechCrunch. “The entire organization has AI embedded in your DNA and it’s something that [brought] tremendous efficiency in the last year. For context, we’ve cut our delinquency rates by half while [during] the same period, we’ve more than 3x’d the business. That was definitely possible because of our ability to use AI to underwrite each transaction.”

Unlike in the U.S., Aplazo can’t always rely on credit history; according to the company, 40% of its users don’t have any. This makes Mexico difficult to enter for international BNPL players, even when they have a strong market position in other countries, as Affirm or Klarna do. 

However, Aplazo does have competitors in Mexico, such as fellow BNPL provider Kueski , which recently partnered with Amazon. Others, such as Colombian account-to-account payments startup Fintoc , are taking a different approach, but with the same goal of reducing transaction fees and friction for merchants.

For Aplazo, BNPL sounds more like a means to an end, a stepping stone for grander fintech ambitions. 

“Our vision is to become the preferred payment method in Mexico; and because of our position in the market, where we’re serving underserved users and working with underserved merchants, we see a lot of opportunity to broaden the relationship with both merchants and consumers to create more value to them,” Peña said.

However, the company is growing cautiously, and claims to be near cash-flow breakeven in the last couple of months, with a steady headcount of 130 people. “We are very conscious about the efficiency of the company,” Peña said.

This is also in line with what VCs want to see these days, and likely explains why Aplazo managed to raise a large round and increase its valuation despite the current context. 

Brazilian VC Andre Maciel, whose firm Volpe Capital participated in the round as a new investor, judged in a statement that “Aplazo’s growth profile and unit economics not only make the company stand out among all other peers we have seen in the region but also comfortably position the company for self-funded growth going forward.”

Existing investors Oak HC/FT, Kaszek and Picus Capital also participated in the round, which comes in addition to bridge funding the company raised since its $27 million Series A in 2021 . In total, the company has secured $100 million in equity and $75 million in committed debt.

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