Why didn’t I get bonus points on my condo rental stay?

Dear Cashing In,
I used my Costco Citi Visa card to book a condo rental for over $2,000 through VRBO, thinking this would be rewarded at a 3 percent rate as an eligible travel purchase. I was surprised to find it was rewarded at only a 1 percent rate. The charge was listed on my statement as “Homeaway,” which owns VRBO. If I had known that, I would have used my Capital One Venture card for this transaction.

I contacted Citibank, and their response was that Homeaway is classified as a real estate agent or manager. The rewards category depends on how the merchant is classified, and this classification depends on the merchant’s primary line of business. A third party is responsible for assigning merchant codes, and the Citi has no control over how a merchant is classified. This was very clearly a travel-related purchase and should have been rewarded at 3 percent rate instead of 1 percent. Don’t you think this is misleading? – Doran

Dear Doran,
Category bonuses are one of the great ways to easily rack up reward points. If you are planning to spend money anyway, it can make a lot of sense to put the charge on a card that gives extra points for spending in certain categories.

Some of the most common category bonuses that you will find on reward credit cards are in the areas of travel, restaurants, groceries and gas. If you have a few cards, chances are you will have at least one and maybe more of those categories covered by category bonuses.

Unfortunately, your experience is a cautionary tale about what can happen when there are charges that fall into a gray area between two categories. I agree that this certainly sounds like a travel expense, in that it appears you booked the condo for a vacation. But what the Citi agent described is exactly how it works: Whether you receive a category bonus depends entirely on the Merchant Category Code (MCC) that is assigned to the company charging your credit card.

In this case, then, VRBO is not classified as a travel expense, which means you don’t earn the extra points that you were expecting. If you read the terms and conditions associated with your credit card – and most people don’t – it most likely explains how the awarding of bonus reward points works: If the merchant is in a certain code for travel, you earn the extra points. If not, you don’t.

Other gray areas could include, for instance, a coffee shop inside of a big department store. Is that a restaurant or a store? And there are always questions around what counts as a grocery store: Does Wal-Mart? Sam’s Club? Costco?

I have read about instances in which people have called to complain about certain classifications and have encountered customer service agents who have awarded them the points they thought they deserved. But usually, you’re stuck.

What you can do next time: If there is a gray area, you can try to figure out ahead of time how a merchant is classified. A lot of people use the Visa Supplier Locator for this purpose. You can also search on the internet on discussion boards such as Flyertalk. Or you can contact the merchant directly and ask how it is classified.

Of course, that approach works only if you think of it ahead of time and can spend a little time researching. Otherwise, if you have already made the purchase, you’re going to be out of luck.

See related: In which categories can I get bonus points?, Simple strategies for increasing your card rewards