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Do you lose rewards on returned purchases?

By

Cashing In
Cashing In columnist Cathleen McCarthy
Cathleen McCarthy is a journalist whose articles on travel, commerce and consumer topics have appeared in dozens of publications. She writes "Cashing In," a weekly column about credit card rewards programs, for CreditCards.com

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Question for Cathleen McCarthy Dear Cashing In,
If you return something that you bought with a credit card and get your money back, will you lose the points that you got with that purchase? I carry a Chase Freedom card, and I'm having buyer's remorse about a TV that I bought. -- Beatrice

Answer from Cathleen McCarthy Dear Beatrice,
I hate to be the bearer of bad news, but yes, if you return the television -- or any purchase -- you forfeit your reward points. Once the return is recorded, the points will be deducted from your account. If that were not the case, people could go out and make purchases just to rack up rewards, then return everything having made no real charges but rewarded with piles of points from the card issuer.

In the case of your Chase Freedom card, if you bought that television at Best Buy between October and December, when the card was offering a 5 percent cash-back rebate on purchases there, and you spent $1,000 on the TV, you forfeit $50 in cash back. (You would also have scored 5 percent cash back if you bought it through Amazon from January through March). Chase is not about to give away a $50 award for a purchase you didn't ultimately make.

Really though, isn't it better in the end not to get stuck with an expensive item you're not absolutely wild about just to get 5 percent cash back? Whether you're out $1,000 or $950, you'd still have a television you don't like. The bad news: You may have to wait until Sept. 15 to activate your card for the next 5 percent cash-back deal on Best Buy purchases, given the Freedom card is only offering the 5 percent deal on grocery stores and movie theaters from now until July, and then gas stations and restaurants from July through September.

Maybe you could use this setback as an opportunity to spend more time this summer barbequing, going to the movies, taking road trips and dining out to take advantage of those 5 percent discounts, instead of watching TV. By the time the fall shows premiere, prices may have dropped on the TV you really want and you'll not only get the 5 percent back, but save a sizeable chunk on top of that and possibly get in on the next generation of HD technology.

If it's any consolation, your credit card guarantees the best price available when you do get around to TV shopping. Freedom offers a price guarantee for purchases made with the card. That means if Best Buy drops its prices within 90 days after you buy your TV-- and you know how annoyingly often that happens during the holiday season -- they have to refund the difference between the sale price and what you paid, up to $500 per claim and $3,500 per year. To qualify, you need to call Chase Protection Services within 10 days of the price change and refer to a printed ad. Internet purchases don't qualify.

If you don't want to wait that long to trade up on your TV experience, you may be able to get a decent discount by purchasing a TV through the Ultimate Rewards portal. Depending on which retailer you buy from, you can get up to 10 percent off by logging on via Chase.

If you have enough reward points, you might also be able to buy a TV through the Chase Ultimate Rewards program without spending any cash at all. They have about 270 TVs listed, starting at 14,300 points for a 19" Dynex and ranging to 132,500 points for a Panasonic 50" plasma HDTV. Points for merchandise are supposedly equivalent to retail list prices, a point equaling one cent, but don't necessarily offer the best price available. You'd be getting that Panasonic for $1,325 worth of points, for example, when you could buy it online from Kmart for $764, tax and shipping included. In that case, it might make more sense to collect your rewards in cash and then buy the TV.

Sorry you don't get to enjoy this television, but here's hoping you manage to get an even better one at a better price -- one you'll be happy with for years to come.

See related: Mint bans $1 coin trick that let rewards credit cards rack up points

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Published: April 3, 2012


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