Amex Clawbacks For Airlines Gift Cards – For Charges Up To 2 Years Old
Another day, another Amex clawback. The RAT (rewards abuse team) has once again justified their existence. They turned over another stone and came out victorious. There are reports of people getting emails that they will be retroactively billed for airline incidental credits where gift cards were purchased. This was a popular way to skirt the American Express rules in the past and use what are now pretty much useless credits. Do I think it is a coincidence that this latest round of clawbacks came right after they announced new credits for premium cardholders? Not in the slightest. That money has to come from somewhere, especially after seeing their first quarter earnings. So let’s take a look at the details for the Amex Clawbacks this time around.
Details
Reddit user MichelangelesqueToea posted that he received an email from American Express informing him that he would be getting a bill for some past airline incidental credits. The issue was that he used the airline incidental credits from his Platinum and Gold cards to purchase Delta gift cards. It was well known that if you purchased Delta gift cards in $50 increments it would trigger the credit. They closed the loophole on purchasing gift cards a year or so ago. I think everyone understood that move but to now go back and reverse the credits on purchases two years old, that seems a bit extreme.
For now it appears that only Delta gift cards are being targeted. That could be because Delta is a co-brand partner with Amex or they could just be working their way through the airlines one by one. I wouldn’t be surprised to see this extended to others in the near future.
My Thoughts
This comes a few weeks after Amex’s last clawbacks which targeted people that used refundable tickets to get credits. Those clawbacks have even led to some shutdowns. I didn’t agree with Amex on those clawbacks either, because people have legit flights cancelled all the time – especially in 2020. So I thought they overstepped some and the fact that they waited until the new calendar year to do it didn’t sit well with me. Waiting till the new year ensured people couldn’t earn their credit after the clawback. People got a credit on something they didn’t end up paying for so I understood their stance on the matter.
This time around I think they are being unbelievably petty. These were purchases made 12-24 months ago and they were actual purchases. There was no double credit, Amex got their swipe fees as they would have on any other purchase, so why go to these levels? They have closed the loophole, something they could have done long ago. Amex is one of the only companies I can remember that retroactively goes after people for a problem that they themselves created with poor IT infrastructure. Any other company plugs the hole and moves forward. Not Amex, they go back YEARS to try to recoup a little of that money that you already paid them for in the annual fee. That is because all they care about is breakage.
Amex Has Fallen Behind The Competition
American Express’ competition has made their credits easy to use. And you know what, there is still breakage. People forget to use it or just get lazy. It happens all of the time but people don’t feel cheated by it. When you flaunt a perk or credit and then make it difficult for people to use is there any value in that or is it just a marketing ploy intended to dupe people? Similar to how everything is always “on sale” at Kohl’s.
Final Thoughts
If you purchased a gift card in the past two years that triggered an Amex airline incidental credit then keep an eye on your emails. It seems that they are focusing on Delta purchases for now but that could change in a blink of an eye. They have to come up with the money for all of these new Platinum credits after all. I can’t wait to see how they find a way to clawback those as well.
The last few years has soured me on all things American Express premium cards. I now value these airline credits at a small fraction of their publicized value. It is one of the reasons that I decided to downgrade my Aspire card. It just isn’t worth the hassle anymore. My future will have a lot less Amex metal in my wallet, that is one thing I can guarantee.
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Slightly off-topic but just to update — the RAT team is still in full force as of late August 2020. In my particular case, they have decided to deny all Delta SkyMiles for purchases made with my Delta Reserve card that they ‘suspect’ don’t qualify under their terms and conditions… Since the retailers (in this case, ‘US Supermarkets’ category) don’t send identifying information as to what was actually purchased, they just base their suspicion on transaction amount and volume and place the onus on the cardholder to ‘prove’ that the transaction(s) were for qualifying items.
I was quite shocked when they told me that all base and bonus miles were being denied unless I wanted to send ‘all’ of my receipts to them for verification..
My husband demands to keep the receipts for supermarket purchases awhile, now I know why!
That time frame is an insult. Tough titty AMEX. Your premium cards are shit, the piddly little monthly credits are shit, MR is thin sauce, Centurion lounges are scarce. I’m so glad I cancelled Platinum when it went to $500 levels of insanity for dribbles of benefits here and there. If they tried to claw back anything after a year or two id cancel my remaining Amex cards and get all their benefits for cheaper elsewhere.
So many great one liners in this comment – thank you for making my Monday morning 🙂
In my own experience, Amex has the best customer service, as long as you are a GOOD customer. In business you can’t squeeze the other guy so much he doesn’t profit. It’s a no win situation… The only other card issuer I have seen to go above and beyond is Discover, I wish they would revamp the Diners program to compete with Amex and Chase, perhaps they will post-COVID.
The problem here is that cardholders have no recourse. With AMEX being retroactive, it’s not like customers can now retroactively buy a flight and use the credits how they were intended. It’s not good business, IMO. Just fix the loophole, and move on, AMEX. Don’t disenfranchise your customers.
100% agree Raymond
Actually i want to give AX some kudos for the recent CC changes and personally for giving me historical credits on past Misc air credits. I have not always been an AX fan but as of late they are coming thru for their customers.
Their refresh was great and the $200 Biz Plat credits today. It just seems like they have two ends of the company not talking. One side is looking out and the other side is trying to grab up whatever money they can. The mixed message is tough to swallow.
Going to be a lot harder to justify holding a premium amex card going forward. Will this end up long term being a Pyrrhic victory for amex? Too often companies and governments enact policies using a static analysis and then sit around wondering why they didn’t anticipate a resulting change in behavior that resulted in less money saved or revenue collected.
That will be interesting to see. Maybe all of the customers the leave will be the least profitable because they knew how to max out the perks. Maybe those people were also big spenders because they valued the MR program the most etc. Hard to say which way it would go but will be interesting to see in future earnings reports.
This is an interesting one. You *have* to believe, that there is a second component to this clawback.
A *lot* of people knew about the $50 GC purchase scheme.
So, if Amex claws it back from everyone who did that… that could be a lot of people.
I wonder if they are targeting people who did that… AND… something else.
Amex doesn’t allow churners really – but, if people did the GC… AND… maybe got a bunch of referral bonuses. Or… had a lot of 4x… spend.
I just wonder if Amex would use the GC as a cover to penalize people who have really been gaming the system. We can never know, so maybe it’s silly to speculate. But, spending the dollars to target people who got $150 a year, 1-2 years ago, seems strange.
But, if they are targeting people who did that, plus took some other liberties – then Amex is likely justifying it as a warning shot to the entire community.
Interesting. I have $150 or $300 from this on Amex Biz Plat over the years.
I spend $1M a or a year on that card, but no other games. So, I’ll be curious if they email my company.
I think you are probably right Don. They are using it as an excuse to weed out the worst abusers. Until we get more data points we won’t know for sure though.
Class action lawsuit anyone?
I am all in.
I would never have applied for the Platinum card if the gift card credits did not work. There was no gaming or fraud.
Good luck with that. Gift cards were always excluded in the TOS.
[…] “RAT” — cute and appropriate) is at it again. Miles to Memories reports Amex is going back two years and charging cardholders for Delta gift cards that credited as airline incidentals on eligible […]
I think I’ve had about $1200 in Gift cards credit back as incidentals from 1-2.5 years. There go that stimulus check that hasn’t arrived yet.
Sorry to hear that – it is a massive, unplanned bill for sure.
I’m not so worried about a claw back as I am a shutdown. I have near 200,000 points I worried about a shut down and unable to use the points. 2+ years ago I did have delta GC and last year flight cancellation. I wonder if I should liquidate my points now in case of a shut down. I wanted to use the points for a flight but probably wont happen anytime soon with the virus. Guess I need to research next best point value.
I wouldn’t be overly concerned with just those two instances myself. But I think everyone is a little anxious right now for sure.
Made a purchase early January 2019 for AA gift cards. No email yet, though I’m sure it’s coming.
Mark – agree Amex is looking for any fraud or inappropriate use but also understand that gift card have ALWAYS been excluded from the credit. The fact airlines previously coded it in a manner that it was allows or the internal Amex systems didn’t catch it is irrelevant. Legit claw back for Amex. Also, on the clawback for cancelled flights. I have no problem w that (I have one on my Delta Plat card for $100 that Amex will take).
Sounds like a rounding error to me.
No, it is not a legit clawback. If they gave you another $200 travel credit to use within a reasonable time frame, then maybe. But they awarded credit, the credit tracker went to $0 remaining, and there was no opportunity to use the credit for a charge that Amex deems legitimate. That is unacceptable.
Mark, I think you are oversimplying things when you make this statement:
“When you flaunt a perk or credit and then make it difficult for people to use is there any value in that or is it just a marketing ploy intended to dupe people?”
The problem with your logic is that the credits on the say the Amex Platinum Personal and Amex Gold Personal are too good. Let’s look at why:
Amex Plat Personal Annual Fee is $550 – $200 annual Uber credit – $100 Saks credit – $200 Travel Incidentals credit = $50 annual fee.. the math doesn’t work.
Amex Gold Card Personal Annual Fee is $250 – $100 Travel Incidentals Credit – $120 select restaurant/Grubhub credit – $30 annual .. the mat doesn’t work
They are not operating Centurion lounges, buying exclusive access to Escape and Airspace lounges, offering Priority Pass and 5x earnings on airfares with a $50 effective annual fee. Nope, they make the credits difficult to use. Same goes with the Gold card, they are not offering 4X earnings on groceries and dining for a effective annual fee of $30. The credits have breakage and not everyone uses it. I’m old enough to remember the days of mail in rebates, they always advertised the price after rebate price which only worked if a large percentage of people didn’t go through the trouble to get the rebate. Sure, mail in rebates have kind of gone away (it’s done online and less widespread) but lasted for decades.
Bottom line, is if you want a easy to use credit get the CSR or Citi Prestige but it does cost you more and you get a lot less in perks IMHO vs th Amex Plat. Really, it’s up to everyone and yeah I used the Delta gift card workaround and knew it was risky. Everyone who did the same for the most part knew what they were doing. Bottom line is that I think it ua fair for Amex to use a credit strategy that by design causes breakage, but it’s up to consumers to choose the competition if they don’t like it. That’s how the free market works!
Fair points although I have long said that I would prefer, and I assume others would as well, lower credits that are easier to use. Give me a $150 travel credit and a $100 Uber credit that can be used anytime and I would take that. So many months I end up using Uber Eats’ inflated prices just to burn the $15 credit but that value is really maybe $5-$8 those months towards a meal when you include tip and service fees etc.
I guess there in lies my issue with it. It feels predatory even if it technically isn’t. But I know others are able to maximize all of the perks easily and enjoy getting maximum value that covers most of the annual fee.
Hmmm, not refuting any point, but wasn’t the CSR original formula too rich? I mean for effectively $55 over the annual fee for the CSP (netting out the very easy to use $300 travel credit) Chase was offering cardholders 50% more points on the same bonus categories, better insurance, 25% more value on redemptions through their travel portal, and least but not least a generous Priority Pass benefit.
So what did they do, they raised the annual fee by $100 (I know it’s being rolled back effectively but that’s temporary), while offering some Lyft and Doordash benefits that have breakage.
One other point, is that in addition to breakage, I’m almost certain the following Amex and Chase Benefits have a vendor contribution (meaning the vendor is charging the banks less than face value)
– Uber credit
– Lyft Pink
– Saks 5th Avenue credit
– Doordash
– Grubhub
This is all part of the strategy of being less transparent. Some people will be able to maximize the benefits, and some won’t. But in that way, Chase and Amex are no more different than gyms which sell memberships knowing only a fraction of users will actually maximize.
Finally, UberEats does allow for pickup at many restaurants and I’ve been using that, but yeah I go out of my way to use it, so I don’t value it at $15 a month during the lockdown (I used Uber regularily pre lockdown).
Best value from your UBER credits is when you sign up to be a driver and deliver your own food, if you have any extra credits you can even tip yourself. If you sign up to drive just make sure you use someone referral so you can also earn the new driver sign-up bonus. I seen Uber offer between $200-1000 new driver signup bonus to referred drivers. Then to make it work better after your signed up, refer your spouse you both get a bonus and you both sit in the car with your UBER accounts on and one of you will catch your own order. I have 2 plat cards, $30 Uber credits a month many times I spend $25 on food, make a $18 profit to deliver to myself & I also tip myself $5. In the end my profit is $23 and I get $25 worth of free food!!
It would be a legit clawback if the customer was now given the ability to use it as intended within a specified timeframe.
Amen, MrDioji. I actually like your common sense resolution to the matter. Amex is leaving everyone feeling sour after all these clawbacks. It’s THEIR mistake. Completely wrong to go after their customers for their own error.