(This thread also came up as a top Google hit for me, for the same inquiry.)
I called American Express earlier today and spoke with "Alex". I asked him if purchases of gift cards or store credit to the Amex card, which are then used to purchase a product, would be covered for the extended warranty benefit. The answer is probably, but it is a novel question and since Amex does not do scenario analysis, the decision would ultimately lie with the claims adjuster.
First, read
http://americanexpress.com/EWterms carefully. Relevant text:
Loss means the product malfunction which necessitates the repair or replacement of any one product, as covered by the terms of that product's original warranty which is valid in the United States of America when the expense of the purchase, whether for Your use or as a gift, has been charged to Your Account.
We will pay up to the actual amount charged to Your Account for the product for which a Loss is claimed, but not to exceed $10,000.
Extended Warranty does not reimburse for shipping and handling expenses or installation, assembly, professional advice, maintenance or other service charges.
Only a Cardmember has a legal and equitable
right to any insurance benefit that may be
available under this Plan.
Termination or Cancellation
Coverage will cease on the earliest of the following:
…
4. the date You are no longer a Cardmember;
…
Termination or cancellation of coverage will not prejudice any claim originating prior to termination or cancellation subject to all other terms of the Policy.
First of all, you must be an active cardmember of any American Express card when you file the claim (and never have left the company entirely, i.e., cease to be a cardmember). You do not have to have the specific card that you used to charge the purchase, but there must be continuity of your relationship with Amex as a whole. After you file the claim, you can terminate your relationship with American Express; they will honor pending claims. (I asked the representative, Alex, this specifically.)
The key language here includes:
"when the expense of the purchase…has been charged to Your Account" and
"We will pay up to the actual amount charged to Your Account for the product…." The second part clearly indicates that if you pay for some of the purchase with your American Express Card Account directly, and for the rest with cash, you are limited to the portion charged to the account.
Now, if you pay for some with your card directly, and some with a gift card that you paid for with your card directly, does it qualify as "the expense of the purchase" being "charged to Your Account"? I would argue yes. I do not see the difference between the gift card purchase, and asking the merchant to swipe your card twice at the register. It does not say that you have to charge the entire purchase price to the Card Account at the time of the actual purchase. (To provide contrast, there is another American Express policy regarding car rental insurance, that says that you have to charge the entire amount of the rental to the Card at the time of the rental, to qualify.) The language also does not call out that the expense has to be at the same merchant from whom you purchased the product. Therefore I would think that if you pay Merchant A with your card and Merchant A pays Merchant B for Merchant B drop-ship your item to you, that would qualify.
I believe the probably of success is 60% but the representative Alex suggested 50/50.
YMMV!