Discover’s Deal of the Year: The waiting game strategy

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Quick background: Discover is currently running two overlapping promotions: an extra 10% cash back for Apple Pay purchases made through December 31st, plus double all cash back for a year.  Each promotion is amazing on its own. Taken together, they’re fantastic.  You can get 20% back on all Apple Pay purchases, in addition to your usual credit card rewards!  But… we don’t yet know if gift card purchases will work…  You can find full details here and here.

Deal of the Year

Do gift cards count?

The terms of Discover’s Apple Pay promotion are very clear: gift card purchases are excluded:

Earn an extra 10% Cashback Bonus on up to $10,000 of in-store purchases when you use your Discover card with Apple Pay now through 12/31/15. Excludes gift card purchases. No sign up needed. Rewards earned are in addition to your standard rewards and are added to your Cashback Bonus account within 2 billing periods.

That said, it is often the case with promotions that gift card purchases are explicitly excluded, but they work anyway.  If gift card purchases do work with this promotion, then it would be very easy to rack up $10,000 of spend through Apple Pay (assuming you have stores near you that sell gift cards and let you pay with a credit card via Apple Pay).  For those with a well stocked OfficeMax store nearby, it has become even easier now that they carry $500 Visa and MasterCard gift cards.

Waiting and wondering

Many of us have been waiting for definitive proof of whether or not gift card purchases result in 10% cashback (or 10X extra “miles” in the case of miles-earning Discover cards).  While it wouldn’t be the end of the world to buy $10,000 worth of gift cards without getting the 10% bonus, it wouldn’t be all that rewarding either.  At best, if you paid with the Discover It Miles card, you would get the equivalent of 1.5% back now and another 1.5% at the end of your first 12 months with the card.  Since $500 Visa/MasterCard gift card fees are usually about 1%, you would still clear about 2%, or $200.  That’s a far cry from the $2,000 (less fees) that you would hope to earn from the combination of the Apple Pay and double first year bonuses.

Unfortunately, even people who have had a second statement close since the beginning of this promotion have not yet earned any extra Apple Pay rewards — Not for gift cards and not for regular purchases.

What Discover Says

The terms of the promotion claim that you will receive rewards “within 2 billing periods”.  Well, that hasn’t happened.  I called Discover a few times to see what their phone reps had to say.  One kept to the “2 billing periods” line.  She said that when my second statement closes in early November, I should call them if I don’t see the 10% rewards.  A second rep said that rewards are likely to take 60 days from the date of purchase and then should appear on the next statement after that.

A new waiting date

Let’s assume that the second rep I spoke with is correct.  The promo began on September 16th.  We can count forward 60 days to see the first date that the reward may be applied: November 15th (which also happens to be my son’s 16th birthday!).

If we assume that a lot of people ran out and used Apple Pay on September 16th, then there should be a decent number of people who made purchases and who’s statements will close shortly after November 15th.  If we give the system a bit of a buffer, we get to our new waiting date range: Monday November 16th through Friday November 20th.

I expect that readers will chime in around those dates with results from their latest statements.  Did they earn 10% back for gift card purchases?  Did they earn 10% back for anything?  Did gift card purchases work at some stores, but not at others?

Strategy

I plan to keep waiting until November 21st.  If we hear from readers before then that gift cards work, then great!  I’ll start buying.  If we learn that gift cards do not work, then I’ll look to other options:

  1. I’ll use Discover and Apple Pay for all regular purchases, whenever possible.  I expect that I’ll go to stores that support Apple Pay rather than to others if all else is equal.  I may stock up on some non perishable items that I know I’ll use in the long term.
  2. I’ll buy holiday gifts at stores that support Apple Pay.
  3. I’ll look for buy/sell opportunities.  The ideal candidates would be ones where I can earn a small profit, or break even, before considering the 20% rebate from the two Discover promotions.

What if November 20th comes and goes with no new information?  Then we’ll all have a tough decision to make.  Do we gamble on gift cards or go with plan B?  I don’t yet know which way I’ll go, but I’ll let you know what I decide if it comes to that.

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