Gift Card Purchases Excluded from Earning Rewards with Amex Cards
The bad news keeps on coming from American Express. Just yesterday I wrote that gift card purchases likely are gone for good, as far as triggering airline statement credits is concerned. And that’s after all the bad news from Amex when it comes to earning bonuses and getting new cards.
They introduced a tool last that could turn you down for a signup bonus. Their Priority Pass membership that comes free with some cards for example, will be devalued next month. They are also going after referral bonuses for people who referred themselves for new cards. It’s all likely due to the increased cost of their Rewards Programs.
Gift Card Purchase Don’t Earn Rewards
Gift card purchases with Amex cards have already had some issues. They were already not counted towards spending requirements. On top of that, some merchants such as Simon Mall, a popular source of gift cards, didn’t earn rewards. Now it’s being added into the terms that gift card purchases will not earn rewards at all, regardless of where they are purchased. Doctor of Credit reports that this gift card exclusion is not showing on all cards explicitly for ordinary points, but has been added to the Blue Business Plus card and the Gold card for example.
With your Blue Business® Plus Card from American Express, you earn one Membership Rewards® point for each dollar you spend on your Card for eligible purchases. For the first $50,000 in eligible purchases in each calendar year you also earn one additional point (for a total of 2 points)…Eligible purchases do NOT include fees or interest charges, balance transfers, purchases of travelers checks, purchases or reloading of prepaid cards, purchases of gift cards; person-to-person payments or purchases of other cash equivalents. Additional terms and restrictions apply.
Guru’s Wrap-up
While the language has been added to exclude gift card purchases from earning rewards, I doubt it will be a strict rule. Probably small purchases of gift cards will continue to earn rewards. Even larger purchases as long as it’s not huge amounts. But if you’re constantly charging amounts that are easily identified as gift card purchases, it could become an issue. Plus if they take a look at your accounts for any reason, then they can identify your gift card purchases and claw back points. I would suggest to tread carefully with gift card purchases with Amex cards from now on.
Let me know what you think and if you have any data points where rewards weren’t earned for gift card purchases.
I wonder is AMEX receives less commissions/swipe fees for gift card purchases? If they receive the same commissions around 3% as a normal purchase? If so AMEX should be happy we buy gift cards in order to generate their swipe fees. Unless they figure most gift card buyers always pay their statement in full and the 3% AMEX earns as a swipe fee is less then the points they pay us? Therefore they are in the negative and they are trying to limit the generated spend? Thats only logic I could see them cutting off GCs. I bet if we purchase GCs but did not pay off our statements every month so AMEX can charge us interest then AMEX would welcome us to buy GCs.
Not sure exactly, but maybe because if you’re able to buy gift cards with 5% cashback for example, that’s like earning 5% cashback on every purchases with your Amex cards, which is not good business for them. if you use their card for everything, it balances out between 1% purchases and whatever bonus categories the card has.
What if you buy $351.23 of groceries and a $250 gift card was included in that total. Is there any way American Express could know that a gift card was part of the purchase in this example (or would the whole amount code as a grocery purchase).
Depends on the merchants and what level data Amex has access to. They can see what you buy exactly with L3 data. “Level 3 processing requires the capture of specific line item data in credit card transactions. These additional data fields include merchant name and address, invoice number and tax amount, plus line item details such as item description, quantity and unit of measure, freight amount, and commodity and product codes.”
For now I haven’t really seen any data points that this new rule is being enforced.