Originally Posted by
itsme
I suppose we are going a bit OT here, but can't resist... First, you aren't in one of those special categories (e.g., food, gas, pharmacy) that get the user a richer return in miles or points, are you? (Hard for me to figure out how it is that those merchants can afford to pay for what the cardholder gets back in rebates on thin-margin operations, like groceries.
Second, if you and other merchants can't look at the statements your card processor issues you and see an explanation of how they categorized the charges, what is there to keep the card processors honest? It comes down to trust, since you have no opportunity to verify? If that is the case, I wouldn't be surprised to read one day about a huge class action lawsuit by merchants against card issuers alleging fraud. Invitations to defraud, like that one, usually get taken sooner or later, even by banks and other financial institutions if you can believe it.
I'm not a special category - and I assume that the card issuer just loses on those. They want you to make the card a habit, so they lose on the common items. At least that's my understanding.
Yes, we also expect a class action lawsuit all the time. This whole area couldn't be less transparent. We don't see what card a customer uses since it's online, so we have no clue at all about whether we'll be socked for a rebate card charge. We do exclude Amex use for some discounts (although they've implied that they'll do legal stuff in certain circumstances for "payment discrimination" or something like that) but otherwise, it's just a gamble. You can't really ask a customer if they're using a rewards card or not.
In the end, our average non-Amex charge cost is about 2.2%, and we try to reduce it, but we live with it. The problem is, it's a cost of doing business, and anyone who spearheads a class action lawsuit will pretty much be out of business for the duration. They've got you either way.
In this new era of financial transparency with these banks, we can hope, but we doubt it will get to this level.