How Refunds Cost Me a Companion Pass — Reader Mistake Story

Jan 14, 2019

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Today, I want to share a story from TPG reader Daniele, who missed out on an important sign-up bonus:

I applied and was approved for the Southwest Rapid Rewards Premier Business Credit Card in October and the Southwest Rapid Rewards Plus Credit Card in December. I was poised to obtain the Companion Pass early in 2019, which would have made it valid until the end of 2020. I just had to meet the $3,000 minimum spend requirement on the business card by January 10.

I used the card during my first two statement periods and kept an eye on the balances, noting that the $99 annual fee doesn’t count toward the total. I wanted to earn the bonus points in 2019 and not in 2018, which meant I also needed to meet the spending requirement in 2019. I thought I was on track and stopped using the card in December as I got close to the goal, but to my dismay, my December statement indicated that I had already earned the bonus in spite of all my calculations.

During those first few months, I made several returns resulting in credits that were factored into my statement balances, but not into my minimum spend requirement. Altogether I had made $3,115 of purchases, and even though $300 of it was returned, the full amount spent was counted toward the bonus. As a result, I reached the minimum spend requirement much earlier than I wanted to and lost the Companion Pass. I spent hours on the phone with Southwest and Chase, but to no avail.

In conclusion, to check your progress for spending requirement on this card, look for the dollar amount listed as “purchases” on your statement. If you’ve made any returns, this amount may be higher than the number of points transferred to your Rapid Rewards account. I learned the hard way, and I hope this will help others avoid such a mistake.

For the purposes of earning a credit card sign-up bonus, refunded purchases typically don’t qualify as “spending.” Many bonus offers include terms and conditions that explicitly designate returns as ineligible, while others use more subtle phrasing like “net purchases” to define spending requirements. That could cause you to come up short of earning a bonus, or worse. Amex takes a particularly harsh stance on refunds, threatening to claw back rewards or close your account if you later reverse transactions that helped you meet a spending threshold.

The family of cobranded Southwest cards are a notable exception. The fine print for each card only mentions returns and refunds as they pertain to earning points. With respect to the sign-up bonuses, the offers instead reference the total purchase amount, and anecdotal evidence suggests those bonuses are routinely awarded based on gross spending, not net spending. That difference can be costly, since Companion Pass qualification is based on the number of points earned in a calendar year. By meeting her spending requirement prematurely, Daniele made it much more difficult for her to earn the pass in 2019.

I appreciate this story, and I hope it can help other readers avoid making the same mistake. In appreciation for sharing this experience (and for allowing me to post it online), I’m sending Daniele a $200 airline gift card to enjoy on future travels, and I’d like to do the same for you. Please email your own travel mistake stories to info@thepointsguy.com, and put “Reader Mistake Story” in the subject line. Tell us how things went wrong, and (where applicable) how you made them right. Offer any wisdom you gained from the experience, and explain what the rest of us can do to avoid the same pitfalls.

Feel free to also submit your best travel success stories. If your story is published in either case, I’ll send you a gift to jump-start your next adventure. I look forward to hearing from you, and until then, I wish you a safe and mistake-free journey!

Featured image via Shutterstock.

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