Credit card reader question: What happens to items in a return protection claim?

Editor's note: This article is part of a column to answer your toughest credit card questions. If you would like to ask a question, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

In addition to benefits like bonus spending categories, elite status and lounge access, a lot of credit cards offer various protections to make cardholders more confident in their purchases. While a number of issuers are cutting down on the purchase protection benefits offered, there are still a number of cards that offer extended warranty or return protection.

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[pullquote source="TPG Reader Jake"]Any idea what happens to the items credit card companies take back from return protection benefits? I’m curious![/pullquote]

Return protection allows you to return certain items even if the merchant won’t accept it or issue a refund. That can come in handy if you change your mind about a purchase outside of the standard return period. While it differs from one card to the next, policies generally stipulate that upon request, you must send the item in to collect your refund. That brings us to Jake’s question: Where do all these returned items go?

Generally, return protection is a benefit offered through the payment network your specific card uses. American Express, Mastercard and Visa Infinite cards all typically offer some form of return protection, though it may differ by issuer. For example, even though Mastercard offers return protection, most Citi credit cards dropped that specific benefit (along with a number of other protections) back in September 2019.

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Each card issuer and payment network that offers return protection contracts with a third-party benefits administrator that handles your return. When you file a claim, you'll likely be sent shipping labels to mail off your return. Your item gets shipped to a processing center (basically a big warehouse) and waits there while a claims representative verifies that your return is eligible for a refund. If your claim meets all the requirements (for example, the item generally has to be in “like new” condition), then the rep will cut you a refund check and decide what’s to become of your return.

I was happy to hear from several card issuers that, unlike lost luggage, many items are donated to charity. Others are sold at auction, with the proceeds then being donated. Some items might be resold. Unfortunately, some items are simply thrown out. Claims representatives and upper management make the call in each case, and whatever algorithm they use to decide is kept under wraps. It’s not clear why some items have to be sent in and not others, but I was told that each claim is handled individually, so presumably, this too is at the discretion of the claim processor.

Ultimately, the refund is what matters to cardholders, but it’s good to know those items (mostly) aren’t just disappearing into the void.

Related: Best cards for purchase protection in 2020

Photo by Tevarak Phanduang/EyeEm/Getty Images.