Home > 2013 > Credit Cards

Why You Missed Out on That Credit Card Reward Bonus

Advertiser Disclosure Comments 0 Comments

In the sea of cash-back credit cards out there, many will offer more than the standard 1% cash back on purchases on specific categories — including gas, drug stores and groceries. You may have signed up for one just so you can rack up the cash back on certain purchases.

But if your 3% cash back on groceries credit card didn’t give the correct amount of cash back on some purchases that were clearly groceries, there’s a reason for that. You didn’t get the credit card reward bonus because the store’s merchant code — not the items purchased — didn’t match the correct bonus cash-back category.

The Merchant Code

Every store that accepts cards will have a designated merchant code, which typically identifies the type of goods or services sold at the store. Card issuers have a specific list of merchant codes that would qualify for cash back.

Visa has a search tool that will show the merchant code of a particular store, which applies to all Visa cards. There are no similar tools from MasterCard, American Express and Discover, but it’s safe to assume that merchant codes are roughly the same across all card payment networks.

Many travel companies, including airlines and hotels, get their own specific merchant code, which makes it easy to recognize purchases for travel rewards credit cards.

In the case of missing cash back, you’ll often find that it was the store that wasn’t listed under a qualifying merchant code. For example, many Walmart stores will sell groceries but some of them are classified as “discount stores/warehouse/wholesale” according to Visa’s merchant tool. Using a grocery cash-back credit card won’t yield the maximum amount of cash back, even if your entire purchase was made up of groceries.

Often, it is futile to dispute missing cash back because, in their cardholder agreements, issuers clearly state that cash back is given based on merchant codes. Card issuers also list the qualifying merchant codes that are associated with the categories.

If you’re unsure about a store’s merchant code, use Visa’s tool to find out if you’ll earn bonus cash back at that store. Some card issuers will also display your card transactions with their purchase categories on your monthly statement.

What’s Working in Your Favor

Although the merchant coding system might make you miss out on cash back, there are benefits to it. Since you earn cash back depending on where you swipe your card, in many cases, most things sold by a qualifying merchant will generate cash back.

The technicality is a benefit when you can buy items for which you would normally not earn bonus cash back. For example, many supermarkets sell more than just groceries. They also sell household items and appliances, which may be eligible for bonus cash back under the “groceries” category, if they were purchased at a store with the “grocery store” merchant code.

The caveat, however, is to read your credit card agreement to make sure there aren’t exclusions. However, if the issuer does not bar gift cards from rewards, you can also end up earning plenty of cash back on a variety of items that you might not have thought was possible. Major brands such as The GAP, Macy’s and Best Buy will have gift cards in supermarkets. After purchasing these gift cards, you can use them for yourself, effectively generating cash back at these retailers with a cash-back credit card that focuses on groceries.

While this “exploit” is common at supermarkets, it can be viable at other retailers, too. Gas stations and department stores also sell a large selection of items.  But as always, read the fine print before you shop.

Image: iStockphoto

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team