Merchant category code classifications matter when using rewards cards
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Dear Cashing In,
I’m considering getting the Santander Bravo MasterCard. If I purchase groceries at a Wal-Mart Superstore, will I receive the 3 reward points per $1? It supposedly gives 3 rewards points per $1 for groceries, gas and restaurants. How about gasoline purchased at Wal-Mart? — Ben
I was previously not familiar with the Santander rewards card, so thank you for calling attention to it. It is an important reminder that as much as we talk about well-known cards from the major issuers — typically Chase, Citi, Barclay’s, Capital One and American Express — there are plenty of other banks and credit unions that offer cards with appealing rewards.
Santander Bank is a division of international banking group Banco Santander, which is based in Spain. In the U.S., Santander has about 700 branches and operates mostly in the Northeast. It offers two credit cards, the Bravo card and the Sphere card.
Both are cash-back cards. The Bravo card ($49 annual fee, waived the first year) gives 3 percent back on gas, groceries and restaurants, up to $5,000 per quarter, and 1 percent on all else. The Sphere card (no annual fee) gives 1 percent back on all purchases. Both come with a 10,000-point sign up-bonus worth $100 when you spend $1,000 in the first 90 days of having the card.
Other cards have lower limits, particularly on groceries. For instance, the American Express Blue Cash Preferred card ($75 annual fee) gives 6 percent back on groceries but only on the first $6,000 per year, which translates to $360 cash back.
If you have a house full of hungry teenagers or otherwise spend a lot on groceries, the Bravo card is definitely worth checking it out.
Now: What counts as groceries?
Banks determine when to dole out category bonuses based on a retailer’s Merchant Category Code (MCC). If the payment network you are using — in this case, MasterCard — designates that a store is a grocery store, then you get bonus points on cards that give extra points for grocery stores. These designations can become tricky. For instance, is a hotel restaurant part of a hotel, or is it a restaurant?
Wal-Mart is a curious case. Visa has a merchant listing that shows Wal-Mart Supercenters tend to be classified as grocery. American Express does not count warehouse clubs or superstores as grocery. On my AmEx statements it classifies Wal-Marts as discount stores. And MasterCard?
Here’s what we know: Unlike Visa, MasterCard does not provide a public list of how individual merchants are classified. But in MasterCard’s April 2015 edition of its reference guide for merchants, it does offer a definition of what it considers to be grocery stores. It defines grocery stores as:
Merchants that sell a complete line of food merchandise for home consumption. Food products for sale include groceries, meat, produce, dairy
products, and canned, frozen, prepackaged, and dry foods. Other products for sale may include a limited selection of housewares, cleaning and polishing products, personal hygiene products, cosmetics, greeting cards, books, magazines, household items, and dry goods. These merchants also may operate specialized departments such as an in-store deli counter, meat counter, pharmacy or floral department.
From looking at my past statements, I can tell you that a MasterCard I used at a Wal-Mart Supercenter in January 2015 in Albemarle, North Carolina, registered as a grocery store. It is probably safe to assume that MasterCard counts all Wal-Mart Supercenter purchases as groceries, but this is one of those areas where you’re not going to have 100 percent confidence until you charge something there and see.
If you have a question about a certain store, you can look at your online statements and see how the card network categorized a purchase. Maybe you already have a MasterCard and have used it there.
That might be the best and most reliable way to see how those purchases are classified, and whether they can give you the bonuses you seek with a new card.