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TPG reader Lance sent me a message on Facebook to ask about earning a credit card sign-up bonus:
“If I’m trying to meet the spending requirement for the Chase Sapphire Preferred Card, will refunds count against my total? The terms and conditions don’t mention refunded purchases in the list of non-qualifying transactions.”
The top credit card sign-up bonuses can easily be worth $500 to $1,000, so falling short of the spending requirements to earn them can be a costly mistake. That’s why it’s important not only to keep track of your purchases, but also to know which of those purchases ultimately count toward your total.
The Chase Sapphire Preferred Card currently offers a bonus of 50,000 Ultimate Rewards points after you spend $4,000 on purchases in the first three months from account opening. The offer details include a list of charges that don’t qualify, and as Lance points out, refunds aren’t mentioned. However, despite the omission, refunded purchases generally will not count toward your spending requirement.
While the wording isn’t obvious, the offer details actually do address this question by stating that “you must make Purchases totaling $4,000 or more” to qualify. The key word there is totaling; since refunds essentially count as negative purchases, what matters is the net amount you’ve charged to your card in qualifying transactions, not just the sum of positive charges. This is in contrast to charges that are offset by a statement credit, since those may still count toward your purchase total.
A good rule of thumb is that if a purchase doesn’t earn points, then it also won’t count toward earning a sign-up bonus. For example, balance transfers don’t count, and neither do annual fees (though that’s moot in this case, since Chase waives the Sapphire Preferred annual fee for the first year anyway). If there’s ever any doubt about whether a transaction qualifies, you can always ask a customer service representative to check your progress.
So what happens if you meet a spending requirement and earn a sign-up bonus, but a refund later puts you back under the threshold? In that scenario, your card issuer could reclaim any rewards you earned on the purchase, including the sign-up bonus. Whether that actually happens may depend on the amount of the purchase and your subsequent account activity. If you acted in good faith and continued using your card regularly after the bonus period, it may be less likely that your points would be clawed back, but it could happen.
To be safe, I always try to clear spending requirements with room to spare in case I need to make a return or a purchase isn’t counted as expected. And if you have to return an item, consider asking for store credit instead of a refund. For more information about earning sign-up bonuses and avoiding other common pitfalls, check out these posts:
- When Must I Meet the Spend Threshold for a Sign-Up Bonus?
- Ten Commandments for Travel Rewards Credit Cards
- Avoiding Late Payments and Other Credit Card Mistakes
Chase Sapphire Preferred® Card
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||16.24%-23.24% Variable||Introductory Annual Fee of $0 the first year, then $95||0%||Excellent Credit|