Purchase protection benefits: What they are, how to use them

One good but little-known reason to wield your credit card when making purchases is to take advantage of purchase protection.

Putting a purchase on the right piece of plastic may help you have it replaced if what you buy is damaged or stolen, get a refund for an unsatisfactory product or service or even extend the manufacturer’s warranty without paying a dime for the added protection.

“People should know what’s on their cards and the benefits available, and they should use them,” says Linda Sherry, director of national priorities for nonprofit Consumer Action. “Those protections are part of what you’re paying for, so don’t let them go unused.”

Here’s everything you need to know about purchase protection benefits and whether your favorite credit cards offer them.

What is purchase protection?

Purchase protection is a benefit offered with some credit cards. It allows a cardholder to receive a refund or replacement if the item purchased with an eligible credit card is damaged or stolen.

Purchase protection can come with extended warranty that adds to the original warranty and return protection that can help you if a merchant doesn’t refund you when you’re trying to return an eligible item.

Purchase protection benefits offered by credit cards

Benefit	What it does	Card networks that offer it
Basic protection	Covered by the Fair Credit Billing Act, it protects you in any dispute over any goods or services purchased with a credit card	All credit cards
Extended warranty	Adds to the original manufacturer’s warranty on eligible items purchased with the specific card	Visa, Mastercard, American Express
Purchase protection	Covers damaged, lost or stolen eligible items purchased with the specific card	Visa Infinite*, Mastercard, American Express
Return protection	Allows you to claim a refund when the seller won’t return your money on eligible purchases made with the specific card	Visa Infinite*, Mastercard, American Express

*Visa Infinite is a high-end benefits program featured in some luxury cards. Examples of Visa Infinite cards include Chase Sapphire Reserve® and U.S. Bank Altitude Reserve.

Purchase protection benefits by card issuer

These benefits may differ from issuer to issuer – and from card to card. To find a comprehensive guide on your issuer’s purchase protection terms, pick your issuer from the list below:

• American Express
• Chase

Basic protection is covered by law

The first and most basic layer of protection on your purchases comes from the federal Fair Credit Billing Act, which protects you in a dispute over the goods or services you’ve purchased.

These protections are available when you use any credit card to make a purchase – even if the card issuer doesn’t offer additional coverage.

Say the Xbox your kids received for Christmas is defective. Generally, any merchant is going to exchange or return that item. However, if there’s a problem, you can request a chargeback from your card issuer so you don’t have to pay for the faulty present.

Note that under those federal rules,

• You first have to try and work out the dispute with the merchant.
• The purchase must have been more than $50 and made in your home state or within 100 miles of your home.
• Phone, online and mail purchases can still be covered, but it’ll depend on your state or other applicable laws.

Beyond that basic coverage is where you’ll see individual card benefits kick in.

Purchase protection

This benefit covers damaged, lost or stolen items purchased on the specific card (with several limitations) and will replace, repair or reimburse you for the lost or damaged item. The claim period typically is 90 days after the purchase, but that can vary from card to card. Coverage may be capped at anywhere from $500 to $50,000, along with an annual cap.

You’ll need receipts and usually a police report for a stolen item, a repair estimate or picture of a damaged item and you’ll likely have to hang on to anything damaged. Coverage is secondary to homeowners or auto insurance, and some policies exclude items stolen from vehicles.

Best cards for purchase protection

Card	Annual fee	Purchase protection
Chase Sapphire Reserve®	$550	$10,000 per claim and $50,000 per account
The Platinum Card® from American Express	$550	$10,000 per incident and $50,000 per year
American Express® Gold Card	$250	$10,000 per incident and $50,000 per year

Extended warranty

This benefit adds to the original manufacturer’s warranty when eligible items are purchased using your card. The length of the added coverage can extend from a year to two years, and some coverage only applies to warranties of 12 months or less. The limit on each claim typically is $10,000 with a $50,000 annual cap on the entire account.

Comparing the best extended warranty policies

Credit card issuer or network	Extended warranty coverage	Original warranty maximum length	Extended warranty length
American Express	$10,000 per claim, up to $50,000 per account per year	5 years	1 year
Chase	$10,000 per claim, up to $50,000 per account	3 years	1 year
Citi	$10,000 per claim	5 years	2 years
Visa	$10,000 per claim, up to $50,000 per cardholder	3 years	1 year

Citi is the hands-down winner, adding 24 months onto any manufacturer’s or extended warranty up to seven years from the purchase date, up to $10,000 or the amount originally charged.

Despite the paperwork hassles of filing a claim, this benefit works. Sherry recalls one friend whose recently purchased coat disappeared from a party. “It was a brand-new overcoat bought with an American Express card, and he got a new one,” she says.

“You don’t have to buy an extended warranty. If you’re buying an item with a one-year warranty, it can be magical. You can get three years just by putting it on the right card.”

Extended warranties also come with a few catches

Limitations on extended warranties include:

• Requirements that the items be new, not used or floor models, and that the item comes with an original manufacturer’s warranty of no more than 12 months.
• Most extended warranties also won’t cover anything that’s excluded from the manufacturer’s warranty.

Return protection

While much less common than extended warranty and purchase protection perks, this benefit extends the retailer’s refund policy, allowing you to claim a refund when the seller won’t return your money. In most cases, you’ve got 60 to 90 days to file.

The most common limits are up to $300 on each refund and an annual limit of $1,000 per account.

Usually, it doesn’t cover damaged or defective items, as well as plants, shrubs, animals, pets, food and perishables and any kind of stored data or music, including software, tickets or anything permanently installed.

Examples of purchases typically covered include clothing, electronics, accessories and other common holiday gifts.

Best cards for return protection

Card	Annual fee	Coverage terms
Blue Cash Preferred® Card from American Express	$95	Up to $300 per item and up to $1,000 per year
The Platinum Card® from American Express	$550	Up to $300 per item and up to $1,000 per year
Chase Sapphire Reserve®	$550	Up to $500 per item and up to $1,000 per year

What you need to know to make these benefits work

Here are a few things you should keep in mind when considering using purchase protection benefits:

• Time is of the essence. Both purchase security and return protection come with limits, usually 90 days but 120 days under the most generous offers, so you’ll need to act quickly.
• There also are limits on how much you can collect. Coverage for purchase security can be limited per claim, even with the most generous cards. So, for example, an expensive stolen engagement ring might not be completely replaced.
• Lost or stolen? You’ll have to prove it. Most cards won’t reimburse you for something that “just goes missing” without a clear indication of loss or theft. You’ll need a police report, itemized store receipt and copies of insurance coverage and any claims you file.
• Not every card offers coverage. Benefits vary not only from network to network, but also within cards. Extended warranty coverage, for instance, might be all that’s on a basic card with more and better deals on more elite cards.
• Review your card’s terms and conditions to learn more about stipulations, paperwork requirements and further coverage and benefit details. Pay particular attention to how to file a claim – there are time limits and paperwork requirements, such as an original receipt.
• When in doubt, call. If you didn’t keep your original statement of terms or can’t find it online, call customer service at the phone number on the back of your card. “Just call and flat-out ask,” says Beverly Harzog, credit card expert and author of “The Debt Escape Plan.” As a customer, “you’re certainly entitled to find out what your benefits are.”

Do you know what benefits are offered by your card?

Chances are, no.

“Part of the problem is that people don’t even know that these things exist,” says Harzog. “How many people get their packet of credit card terms and think, ‘I can’t wait to read all of this!’ In many cases, the benefits aren’t as transparent as they should be. Otherwise, people would be using these benefits a lot because they can really help them out.”