Yesterday Miles Per Day and Doctor of Credit reported a new development in the Amex War on Gaming. The Amex Rewards Abuse Team (RAT team) has been sending emails to some people who recently earned signup bonuses via means that may be against the signup bonus terms (e.g. buying gift cards or buying and returning items). According to Miles Per Day, one such email included the following:
We are writing to let you know that, unfortunately, you are not eligible to receive the Welcome Bonus for the Platinum Delta SkyMiles® Credit Card from American Express.
Activity on your account indicates an effort to reach the Welcome Bonus spend requirement in a manner that is not consistent with the terms of your Cardmember Agreement.
At this point it is unclear if Amex will really claw back the miles that were already awarded. I’m sure they would do so if this happens with their own Membership Rewards cards, but it is less clear what they’ll do when miles or hotel points have already been deposited into a partner loyalty program such as Delta, Hilton, or SPG.
As a reminder, Amex signup offers now include terms like these (the exact wording may vary from card to card):
If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit the welcome bonus to, we may freeze the welcome bonus credited to, or we may take away the welcome bonus from your account. We may also cancel this Card account and other Card accounts you may have with us.
Further, the terms of each signup bonus specifically list the following purchases as types of spend that do not count towards the minimum spend requirements for the signup offer (bolding is mine): “cash advances, purchases of traveler’s checks, purchases or reloading of prepaid cards, purchases of gift cards, person-to-person payments, or purchases of any cash equivalents.”
What to avoid?
Last year’s post “How to Avoid Amex Clawbacks” is just as relevant today as it was then. In that post, I offered the following advice:
- Don’t buy gift cards or other cash equivalents until after receiving your signup bonus. It is clear now that this includes gift card purchases at retail stores such as supermarkets. I’d avoid buying gift cards altogether.
- Don’t buy anything that you are likely to return until after receiving your signup bonus
- Keep your new card for a year before closing (or product changing) the account
And I’ll add a new one:
- Don’t use person-to-person payments with your Amex card while working on meeting minimum spend. Examples of person-to-person payments include payments to friends using an Amex credit card via Venmo, Paypal, Apple Pay, etc.
How to meet minimum spend?
Here are suggested methods that should not run afoul of Amex’s rules:
- Everyday Spend: This is obvious, but needs to be said for completeness. Use the card for all day to day spend.
- Timeshift Spend: With some utilities and other ongoing expenses it should be possible to pre-pay for charges that you know you’ll incur in the future.
- Pay Bills: Obviously if a biller allows credit card payments, that’s a good way to go. If not, consider using a service like Plastiq to pay bills (including things like rent, mortgage, day care, etc.). You will have to pay a fee, but it can be well worth it to meet spend requirements quickly and easily. Note that for Recipients in the United States, the use of American Express cards is permitted only for the following industries: Government (e.g. tax payments), Utilities, Education, Residential Rent and Club Fees and Memberships.
- Pay Federal Taxes: Fees start at 1.89% for credit cards. Over-payments, if any, will be refunded after you file your year end taxes. For full details, please see: Complete guide to paying taxes via credit card, debit card, or gift card.
- Fund Kiva Loans: Do good and hopefully get your money back. See: Manufacture Spend (and do good) with Kiva and Kivalens.
- Buy/Sell merchandise (but not gift cards): For an overview, see: Increasing Spend through Reselling.
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looking into MS-ing on Hilton ascend to achieve status and free nights. I see amex t&C’s re gift card spend, but what is the community’s current experience w ms-ing via grocery stor bought GC. Is AMex clawing back HH points? Are they not honoring 40K diamond status when purchases were via GC MS? I could not find data points and am seeking others guidance/experienc on my favorite most informative blog before I venture down this path.
I haven’t heard any recent datapoints about this, but I know people who do this each year and I’m pretty sure they would have told me if they ran into trouble.
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Relatively new here, and still reading, but can someone clarify for me how any credit card knows that I’ve purchased a gift card? If I buy a gift card that is $500, plus a $5.95 fee (so $505.95 total), I can see that it is obvious. But if I go to Staples and spend $624.36, which includes a $500 Visa gift card, how would they know? Or if I go to Costco and spend $946.80, which includes a $500 gift card toward my future grocery bills, how would they know? On a non-Amex credit card I met my requirements by buying a $500 gift card at Costco, in addition to my purchases, every time I went. At the end of the 3 months, I got my bonus and had $2,000 in Costco gift cards, which I then proceeded to use over the next 6 months for myself.
Am I correct that the credit card company only gets the total and not the itemized receipt? If so, how would they know that I bought a gift card?
In some cases stores provide level 3 data to the credit card companies. That’s the line item details that are found on your receipt. In those cases the credit card company can tell what you bought.
Yikes. How can we tell which stores do that? Should I assume that Costco does not since I never had any problem? Or was I lucky?
With Amex I don’t think there’s any way to know. Other than Simon Mall purchases Amex hasn’t been cracking down on gift card purchases yet but they could start doing so any day
[…] — see “In Memoriam” below. And some tides have changed — whether it be the escalation of the War on Gaming or great perks taken away (See: The next best credit card perks that will be taken away). And […]
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[…] last year I earned points on gift card purchases through a similar offer, but YMMV as the war on gaming has heated up as of late. While we didn’t quite find this offer on every card that earns […]
you can also pay property taxes with your credit card to meet spend requirements. It may be a 2% or 3% fee, but beats having an amex financial review!!
That’s true
[…] Amex fires another shot in their war on gaming. – The message is clear, Amex is highly focused on keeping people from earning sign-up bonuses by using Manufactured Spend. Be careful out there. […]
I agree with a lot of the other commenters about buying gift cards. It’s holiday season, and there’s plenty of legitimate reasons why someone would buy a gift card at a store. I get that they want to avoid gaming, and I hardly buy gift cards in huge amounts, but it would be ridiculous to get an amex account with a many year history shut down because I bought a Barnes and Noble gift card. I mean, really. I’d like to think they apply some discretion in terms of how much of your entire spending pattern the gift cards make up. For me, probably about 1%.
As for purchasing and returning items – again, I get that they want to avoid gaming, but there are absolutely legitimate reasons people decide to return something. It doesn’t fit, someone you bought it for already has one..I mean, if they’re asking us to buy literally anything we have the slightest chance of returning with a different card, well, that’s like asking me to take my business to visa or mastercard for holiday or cyber monday shopping.
+1
Visa and MC have price protection to boot.
[…] Amex has continued to clamp down on purchases they don’t like (See yesterday’s post: Amex fires another shot in their war on gaming), and Citi stopped paying out 3X on the AT&T Access More card for gift card purchases […]
Ooops! Gift cards in December *are* everyday spend! I just put a $100 Amazon card on my new Delta Gold. Is there a difference, if I spend $2100 for the first part of the bonus, instead of $2000? I’m scarcely gaming anybody here, just using the new card at Amazon during Xmas spending-spree month.
There are a bunch of expenses that don’t go to the initial spend requirement, but which wouldn’t necessarily get you shut down. Per the Delta Gold card offer: “Purchases to meet the spend requirement do NOT include … purchases or reloading of prepaid cards, purchases of gift cards, person-to-person payment, or purchases of any cash equivalents.” Reasonable, and not scary.
Chances are that Amex will count your Amazon gift card as legitimate spend. The issue is more that they can choose to exclude it if they want to. I’d only expect to see them do that with purchases that are specifically from gift card vendors and where you spent thousands in gift cards.
does amex initiate the notice to customers via email / letter that the sign-up bonus was not given, or after customers contacted making inquiry about pts not posted?
my relative got a BGR in Oct. with stmt date on the 15th; buying about $3k GCs at supermarkets in Nov., but acct hasn’t yet shown any MR pts as of today. should he inquire about the MR pt or wait til later this month post stmt date to see?
It seems that they sent out the emails on their own after already granting the signup bonus.
He should wait.
thx Greg, will wait & post the final outcome; hoping for a better result
It’s Christmas… people buy gift cards, even normal people! I’ll be pissed (and cancel my Amex cards) if they gripe about it. Gift cards aren’t the majority of spend on my newly-minted Delta Amex card, but it shouldn’t matter. A sale is made. What we choose to buy shouldn’t matter as long as we’re not doing anything illegal.
/Go ahead Amex…give me another reason to drop you…like mucking up the Costco deal.
How about buy bitcoin on Coinbase
Those are very likely to be flagged I’d imagine. You can’t get much closer to a cash equivalent than that