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Mar 31, 2018 | 11:48 am
#1
Magna
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Join Date: Jul 2003
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Can't buy gift cards to meet min spend. How does AmEx know you bought a gift card?
How does AmEx know you bought a gift card? When you buy gift cards they are coded differently than general merchandise? What if I bought a gift card and an actual item on the same receipt? I'm not trying to manufacture spending, rather I want to purchase later in the future and a gift card will allow me to do that. If AmEx claws back my bonus points do you think that reasoning will fly with AmEx? I'm guessing AmEx is concerned about manufactured spending and that's why they outlawed buying gift cards to meet min spend.
Btw, why is PayPal not allowing the purchase of gift cards? Why would they care what you bought using PayPal??
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Mar 31, 2018 | 1:04 pm
#2
javabytes
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Many possible ways.
First, the level of data sent from merchants can vary. Level 3 data includes information about the specific line items in your purchase. CVS, for example, might not just report that you spent $504.18 in the store - but also that you bought a $500 gift card and a box of Band-Aids.
Some merchants deal only in gift cards, so any purchase from that merchant can be easily identified.
They can also simply guess. If you suddenly start visiting the grocery store every day and spending thousands of dollars there, that can stand out. Discover tried this approach during the Apple Pay promo - they didnt actually receive Level 3 data but still tried to deny cash back for gift card purchases. When push came to shove, they had no way to tell what was what. What clued people in was that many non-Gift Card purchases were rejected (like people buying a TV at Best Buy) and Discover tried demanding receipts.
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Mar 31, 2018 | 1:17 pm
#3
txflyer77
Join Date: Mar 2012
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Only Visa and Mastercard process Level 3 data. Amex only processes Level 2 but then has its own EDC format that includes similar data as Level 3. Discover doesn't participate at all. No idea about JCB.
Here's a very detailed technical explanation: http://apps.cybersource.com/library/...III_SO_API.pdf
Merchants who participate generally pay lower fees to their payment gateway, so there's a big incentive to integrate with these programs.
(I lead a payments infrastructure team for a major tech company)
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Mar 31, 2018 | 10:52 pm
#4
Magna
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Join Date: Jul 2003
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Originally Posted by txflyer77
Only Visa and Mastercard process Level 3 data. Amex only processes Level 2 but then has its own EDC format that includes similar data as Level 3. Discover doesn't participate at all. No idea about JCB.
Here's a very detailed technical explanation: http://apps.cybersource.com/library/...III_SO_API.pdf
Merchants who participate generally pay lower fees to their payment gateway, so there's a big incentive to integrate with these programs.
(I lead a payments infrastructure team for a major tech company)
Does Apple participate? I'd like to buy Apple Store gift cards for myself because I want to buy a new MacBook in the summer when I believe they'll introduce updated models. Would purchasing the gift cards using Apple Pay hide level 2 data with EDC format? BTW, what does EDC format mean? I'll be reading the link you sent me too.
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Apr 1, 2018 | 5:07 am
#5
mia
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I do not think there is evidence that American Express is concerned about purchases of merchant gift cards. The focus is on purchases of general purpose Amex, Discover, MasterCard and VISA gift cards.
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Apr 1, 2018 | 5:52 am
#6
sdsearch
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Originally Posted by Magna
How does AmEx know you bought a gift card? When you buy gift cards they are coded differently than general merchandise? What if I bought a gift card and an actual item on the same receipt? I'm not trying to manufacture spending, rather I want to purchase later in the future and a gift card will allow me to do that. If AmEx claws back my bonus points do you think that reasoning will fly with AmEx? I'm guessing AmEx is concerned about manufactured spending and that's why they outlawed buying gift cards to meet min spend.
Btw, why is PayPal not allowing the purchase of gift cards? Why would they care what you bought using PayPal??
There are different types of gift cards, but you have no distinguished between them.
Amex is not cracking down on buying Amazon or iTunes or Outback or Shell gift cards. They are cracking down on buying Visa/MC/Amex (ie, cash equivalent) gift cards.
Buy reasonable amount Amazon gift cards (since they have no activation fee, don't max out a $25-$500 just because you can) at a grocery store, and maybe some groceries on the same purchase, and you'll be absolutely fine, and you can use it later for all your Amazon purchases.
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Apr 1, 2018 | 8:12 am
#7
RedSun
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Go to the detailed descriptions of the AmEx charges. Most of the stores only report the total amount and can't tell the difference between $200 VGC vs $200 grocery. There is no way AmEx or any CC bank can know that. There could be exceptions like what others stated above. But it is rare to me and I've never had any problem.
But card holders get problem if the spending does not make sense, or the MS. It is just hard to explain if you regularly go to gas stations, grocery stores and drug stores, spend large amount each month. Then the CC can just shut you down for the simple reason that the card has been used not in the manner the card was meant for. The bank does not have to know what you exactly bought.
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Apr 1, 2018 | 11:11 am
#8
txflyer77
Join Date: Mar 2012
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Originally Posted by RedSun
Go to the detailed descriptions of the AmEx charges. Most of the stores only report the total amount and can't tell the difference between $200 VGC vs $200 grocery. There is no way AmEx or any CC bank can know that. There could be exceptions like what others stated above. But it is rare to me and I've never had any problem.
But card holders get problem if the spending does not make sense, or the MS. It is just hard to explain if you regularly go to gas stations, grocery stores and drug stores, spend large amount each month. Then the CC can just shut you down for the simple reason that the card has been used not in the manner the card was meant for. The bank does not have to know what you exactly bought.
Just because Amex doesn't display all transaction data on their website doesn't mean they don't have it available internally. Amex can absolutely know if you purchased a VGC or a cartful of groceries, if the merchant is transmitting Level 3/EDC data.
And since merchants pay lower fees for including that data, you should assume that any major grocery store is sending it. At major merchants, Level 3 is the rule rather than the exception.
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Apr 1, 2018 | 11:34 am
#9
RedSun
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Originally Posted by txflyer77
Just because Amex doesn't display all transaction data on their website doesn't mean they don't have it available internally. Amex can absolutely know if you purchased a VGC or a cartful of groceries, if the merchant is transmitting Level 3/EDC data.
And since merchants pay lower fees for including that data, you should assume that any major grocery store is sending it. At major merchants, Level 3 is the rule rather than the exception.
I understand there is the big "if". From reading multi forums, I've not heard much card shutdown or SUB clawbacks just because you bought $200 VGC during the SUB period. It is a different story if there were two $1,000 grocery purchases during the $3,000 SUB period. An abnormal spending pattern would trigger an account review. Then the review team can mine the data from the merchants.
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Apr 1, 2018 | 12:00 pm
#10
Magna
Original Poster
Join Date: Jul 2003
Location: Boston
Posts: 249
Originally Posted by sdsearch
There are different types of gift cards, but you have no distinguished between them.
Amex is not cracking down on buying Amazon or iTunes or Outback or Shell gift cards. They are cracking down on buying Visa/MC/Amex (ie, cash equivalent) gift cards.
Buy reasonable amount Amazon gift cards (since they have no activation fee, don't max out a $25-$500 just because you can) at a grocery store, and maybe some groceries on the same purchase, and you'll be absolutely fine, and you can use it later for all your Amazon purchases.
I got a reminder email from AmEx encouraging me to spend more to qualify for the bonus points. And in the email it said Purchases of gift cards and other cash equivalents do not count towards the welcome bonus spending requirement. I didnt know to distinguish between the different types of gift cards. This is good news for me that merchant gift cards do count toward the spending requirement. AmEx probably wanted to put out a simple message and not go into excruciating details as to which gift cards are okay or not.
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Apr 1, 2018 | 7:22 pm
#11
sdsearch
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Join Date: Jan 2005
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Originally Posted by Magna
I got a reminder email from AmEx encouraging me to spend more to qualify for the bonus points. And in the email it said “Purchases of gift cards and other cash equivalents do not count towards the welcome bonus spending requirement.” I didn’t know to distinguish between the different types of gift cards. This is good news for me that merchant gift cards do count toward the spending requirement. AmEx probably wanted to put out a simple message and not go into excruciating details as to which gift cards are okay or not.
Actually, if you parse that carefully, they sort of did say that: "gift cards and other cash equivalents" -- "other" means that they were counting gift cards that are cash equivalents, meaning Visa/MC/Amex gift cards when they said "gift cards". Merchant gift cards aren't consider "cash equivalents", and thus if they had meant to include merchant cards they wouldn't have said "other" after that.
You have to read legal statements
very carefullyto understand their meaning, because they write them very carefully (but often tersely, because they're more interested in making sure they have legal protection for they might do than explaining it fully to the average person).
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Apr 9, 2018 | 11:42 am
#12
thebat
Join Date: Jul 2004
Programs: CO, UA, AA, WN, DL Gold
Posts: 2,981
Are these restrictions applied mainly for MR points? Does Amex chase down customers who might use a GC for Hilton Honors bonus? Or SPG, Delta?
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Apr 10, 2018 | 1:07 pm
#13
sdsearch
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Originally Posted by thebat
Are these restrictions applied mainly for MR points? Does Amex chase down customers who might use a GC for Hilton Honors bonus? Or SPG, Delta?
I seem to recall people reporting being denied bonuses due to "obvious" gift card purchases on either an SPG and/or a Delta card in other threads.
So I would assume it applies just as much for Hilton Honors points.
But again, it depends on how "obvious" the gift card purchases are. There's no problem buying a $100 Amazon gift card along with a grocery item
from a grocery storeand getting MR points for that. But buy gift cards from Simon's Mall or giftcards.com, and you're dead.
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May 14, 2018 | 9:14 am
#14
TravelSmart0404
Join Date: Apr 2016
Posts: 10
Amex BGR give 3x points for purchases of shipping services. Is there DP showing merchandise GC purchases at USPS or alike qualifies for 3x points? TIA
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May 14, 2018 | 10:25 am
#15
mhdena
Join Date: May 2015
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Originally Posted by TravelSmart0404
Amex BGR give 3x points for purchases of shipping services. Is there DP showing merchandise GC purchases at USPS or alike qualifies for 3x points? TIA
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