When Returning an Item for Store Credit, Do You Still Get to Keep the Points?

Feb 23, 2018

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“Reader Questions” are now answered twice a week — Tuesdays and Thursdays — by TPG Associate Editor Brendan Dorsey.

When you’re returning an item purchased on your credit card, it usually means you’ll be returning the points and miles from that transaction too. But is that always the case? That’s what TPG reader PJ wrote in to ask:

If you purchase an item on a credit card that offers points and then return the item, BUT accept that return as a gift card from the vendor, does your purchase stay on the “books” with the credit card company and thus do you get to keep the points?

TPG Reader PJ

To get straight to the point, yes, you should be able to return items to a store and if you accept store credit instead of a refund back to your credit card, those points and miles should stay in your account.

Why does this work? Even though you’re getting a “refund,” the credit card company doesn’t actually see this happening since you’re receiving the refund in a different form, not as a credit back on your card account. So for example, if you bought a $50 item from Target with your Chase Freedom Unlimited, you’d receive 1.5% cash back or 75 points (if you have a linked Ultimate Rewards-earning card) from the purchase. And if you returned the item and accepted Target credit you’d still keep those 75 points.

Young woman paying by credit card at juice bar. Focus on woman hands entering security pin in credit card reader. Image by JacobBlund / Getty Images. 
Image by JacobBlund / Getty Images.

So, PJ, if you made a purchase and ultimately decided to return the item, requesting the refund as a store gift card should result in you keeping those points. This is good news if you’re on the verge of hitting a minimum spending requirement for a credit card sign-up bonus and the amount of the refunded purchase will mean the difference between you hitting or missing the required spending threshold. That said, it’s probably smart to spend a bit above the spending requirement to ensure you qualify the bonus. You don’t want to miss out by just a few dollars, after all.

We also wouldn’t recommend using this situation as a strategy for earning points, whether or not you’re working toward a minimum spending requirement. For one, you’ll still be banking cash with a particular retailer when you request the refund as a store gift card, so you wouldn’t want to this so at a store where you’ll never shop. Plus, not all businesses will give you the option to receive a refund as store credit.

Thanks for the question, PJ, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

Featured image by Sitcokedoi / Getty Images. 

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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