Do refunds count against spending toward a sign-up bonus?

Here's something you might have been wondering: What happens when a payment that gets refunded was one you used to help you earn a credit card sign-up bonus? That’s an excellent question that one of our readers, Stephanie, has asked about:

I recently got the Hilton Aspire Amex card and had to spend $4k in order to receive the 150,000 bonus Hilton Honors points. I spent well over $4k on the card in the first month alone on flights, rental cars and hotels for a trip I had coming up in November. The entire trip ended up getting canceled … and almost all of the spend I had generated was refunded back to me. However, I had already been awarded the Hilton bonus points and they were in my Hilton account. My question is: Was this just a fluke? I have to imagine credit card companies usually take your points away and make you spend more…. If I already transferred the bonus from the card to a partner airline, would the card company then get the airline to send back the miles?

The information for the Amex Hilton Aspire has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Do refunds count against spending toward a sign-up bonus?

The good news is that, by and large, credit card issuers don’t typically rescind a sign-up bonus after they’ve awarded it, no matter if the purchases being refunded were used to help meet a spending requirement. Unfortunately, American Express does have a different policy compared to most of the other major issuers.

I contacted the major U.S. issuers for their policies on the subject and here’s what each said:

American Express

This particular reader question specifically asks about an American Express-issued Hilton credit card. Amex’s policy in their terms and conditions state that in the case of a refund, rewards will be rescinded.

Unfortunately, this extends to welcome bonuses as well. An Amex representative confirmed that if a refund is issued for purchases that helped you reach a welcome bonus spending threshold, that welcome bonus will be rescinded unless you meet the spending requirement through other purchases before the deadline.

Bank of America

Like most of the others, Bank of America confirmed that you would not have your welcome bonus taken away if you received a refund for purchases that helped you attain the bonus.

Chase

Chase confirmed that it doesn’t rescind credit card sign-up bonuses after they are awarded. So if you complete the spending requirements, receive the bonus, and then get a refund for purchases that may have helped you meet the requirements, you would still keep your bonus.

Capital One

We reached out to Capital One, but we did not receive confirmation about its policy regarding sign-up bonuses in the case of refunds.

Citi

Citi confirmed that if you’ve met a spending requirement and received your points before a refund hits your account you would keep your sign-up bonus. However, the representative I talked with did point out that refunds made before you received your bonus would be recognized as deductions against the minimum spending target. Customers would have to make up that spend in order to earn the welcome bonus.

Warning: Don’t abuse these policies

While this is great to hear (except for Amex), ensure that you aren’t abusing these policies. Issuers will flag you for suspicious behavior, such as applying for a card, making large purchases to earn a sign-up bonus and then turning them in for a refund after you receive your bonus. Chase is especially known for shutting down accounts with little warning when it suspects foul play.

If it’s a random and understandable occurrence, you should have little to worry about. But don’t use these policies to cheat the system — you’re risking a shutdown and encouraging issuers to adopt stricter policies, which hurts everyone.

Bottom line

Airline cancellations have been a frequent problem in recent years, leading to refunds, confusion and all sorts of headaches. The good news is that for the most part, your sign-up bonus should be safe if you receive a refund after you've met the minimum spend requirement for a welcome bonus, with the exception of American Express.

Additional reporting by Ryan Wilcox.