This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
Major credit card companies have historically offered a type of purchase insurance called price protection. If a customer bought a product and saw a lower price for the same item within a certain time window, the card company would refund the difference up to a few hundred dollars.
The process can be painstakingly long for customers — comparing prices and manually sending in claims is time-consuming. Some issuers provide online ways to take some of the effort out of the grind, such as Citi with its Price Rewind feature. But in recent years, apps like Earny and Sift have completely automated the process. These apps scan customers’ emails for receipts and automatically file price-protection claims with the credit card companies on behalf of the cardholder.
As a result, there’s been an exponential uptick in the number of price protection claims. In reaction to the huge growth, some card companies are restricting price protection policies.
Separately, Chase and Citi recently changed their refund services, lowering the amount customers can get back. Starting July 29, Citi Price Rewind claims will be capped at $1,000 per customer per year and $200 per claim (previously it has been $2,500 per year and $500 per claim), while Chase is removing price protection entirely from the Chase Sapphire Reserve and other cards over the next few months.
“Over time, the growth appears to be explosive,” one high-ranking employee at a major credit card issuer told Business Insider. “Just a couple years ago it wasn’t like this. The sheer number and volume of claims that are popping up all over the industry, they’re unheard of.”
The rapid growth in claims — and refunds that card companies now have to issue — mean potentially millions in unforeseen costs that the companies haven’t budgeted for. However, spokespeople from the banks declined to blame the bots or the increased costs for the changes.
“We are always evaluating our products to offer a great mix of rewards, benefits, and experiences that provide the most value to our customers — and those they tell us they value most. In order to do so we may need to occasionally retire lesser used benefits,” Chase told Business Insider.
In 2017, Citi issued more than 575,000 Price Rewind refunds to customers, totaling $18.7 million in payments. “Citi continuously evaluates our products to ensure that associated benefits are those that customers use and value the most,” a Citi spokesperson told Business Insider. “From time to time, we adjust offerings so that we can continue providing the most compelling benefits at no additional cost.”
On the other hand, earlier this year Discover discontinued a number of card protection benefits, but conspicuously left its price protection feature intact. A person familiar with the decision told Business Insider that price protection remains a popular benefit with customers. However, Discover’s process for submitting price protection claims requires calling the issuer first, making it significantly more immune to the effects of the apps. Discover honors claims within 90 days of your purchase, up to $500 per item and $2,500 per year.
Earny, currently the most popular price protection monitoring app, checks for price changes at many major retailers and says it’s compatible with 87% of credit card companies that offer a price protection benefit.
H/T: Business Insider
Featured image by kizilkayaphotos via Getty Images.
LIMITED TIME OFFER: Earn 60,000 miles after $3,000 spent within the first 3 months. The sign-up offer alone is worth up to $840. If you're a frequent American flyer but don't have status, additional perks that come with this card like first free checked bag on domestic AA itineraries, preferred boarding on American flights can be extremely valuable.
- For a limited time, earn 60,000 American Airlines AAdvantage® bonus miles after making $3,000 in purchases within the first 3 months of account opening*
- New: Earn 2 AAdvantage® miles for every $1 spent at gas stations*
- New: Earn 2 AAdvantage® miles for every $1 spent at restaurants*
- Earn 2 AAdvantage® miles for every $1 spent on eligible American Airlines purchases*
- New: Earn a $100 American Airlines Flight Discount after you spend $20,000 or more in purchases during your cardmembership year and renew your card*
- No Foreign Transaction Fees*
- First checked bag is free on domestic American Airlines itineraries for you and up to four companions traveling with you on the same reservation*
- Enjoy preferred boarding on American Airlines flights*
- Receive 25% savings on in-flight food and beverage purchases when you use your card on American Airlines flights*