Purchase on one card ...refund on another
 

Anyone know of a company where you could buy a lot on one card... and then get them to refund to a totally different Credit Card - thereby racking up a load of miles?

This seems like a simple way to do it but most companies seem to refund to the original form of payment.

Anyone know of any exceptions?

The merchant agreement explicitly prohibits crediting a charge back on a different card than the one on which it was originally made. It comes up as an issue frequently on gift exchanges/returns, since, as a business that's signed that agreement, we cannot "refund" a exchanged/returned gift to anyone but the person who originally purchased it.

Some chain stores, like Macy's, will provide a credit on their inhouse credit card for a return that was purchased on another card. But I would not want to push that too much.

I think it is mostly hit and miss. Sometimes you get a clerk who just doesn't look at the numbers and even if they do, you can say oh i cancelled that card and here is the new one. I bought stuff on one Amex at Costco and returned on another. It is esp easy if you find a place that has you swipe the card, then they don't really care.

My family owns several retail stores. We will only issue credit back to the original credit card (last 4 numbers on the receipt are always checked against the credit card being used for the refund). The above poster is correct in stating that this is included as terms in our merchant agreement.

Then what about the situation raised above where one card is canceled/stolen and replaced with a new card?

REI. They've done it every time I shop at the Seattle store.

I've had luck at both Home Depot & Lowes refunding into cash instead of onto the card. My finance department gives us grief whenever we have refunds to our credit cards, so I try to avoid them at all costs. Granted, my refunds to these stores have been < $20, but if I ask "Can I just get the credit in the form of a store credit instead of going back on the card?", I've always had cash handed back to me (probably 6 times by now).

And don't give me crap because I could be gaming my work, but I spend the refunded $$ before leaving the store on more work stuff.

i think you'd get store credit. i ordered something from dhw with a temp card and wanted to return but of course didn't have the actual card. i tried to explain it to them but they said that it'd have to be store credit

The signed merchant agreement says that cannot be done. For small amounts it's not going to be an issue, but for something larger, the merchant will need to call the credit card company. In all likelihood, if you were to provide the merchant documentation showing that the card was stolen, you're not going to have much trouble.

But keep in mind this isn't what this thread was originally about. The OP was trying to figure out a way to accumulate points on one card for purchases that were later returned on another, so the points would still be intact. In case the message is not yet clear, that would be fraud.

What would be fraud? Telling the merchant that the card was lost/stolen?

Who are you saying is guilty of fraud? And what is your basis for that? It sounds like you might be saying that the consumer must comply with the merchant agreement.

What would be fraud? Please re-read the paragraph in which I mentioned fraud. It couldn't have been more clear. It's only two posts about this one in the thread. And no, the consumer doesn't have to comply with the retailer agreement, the retailer does. But the consumer also has an agreement with the credit card company, and that agreement also details how credits are dealt with.

My credit card agreement contains no such details.

You are correct; the language is very loose in that regard, simply stating that refunds will be issued back to the card. There is an assumption that they're talking about the same card, since it's in the same section as what talks about the purchases. The retailer language is far more precise and detailed.

So perhaps it is not fraud per se to make charges on a points-earning card and have those charges credited back on a different card. But knowing that the merchant isn't allowed to do so (but might because they don't know any better), and doing so for no other purpose than gaming the system (buying things knowing that you're going to return them)... it's at the very least ethically questionable.

Agreed.

My MasterCard card was lost/stolen, I'm not sure. As soon as I figured it out (bus ride home) I maxed it out on a tuition payment with my internet phone and canceled it a bit later.
Had to cancel an airline ticket or something from Air Canada and Air France, I had to send a letter in writing with other credit card number, I gave them an AMEX number to which I got the credit.

I agree!

I bought gas last week from a station which insisted that since I wanted to use a CC, I had to pre-pay -- as in, they had to run the transaction, have me sign the receipt, and everything, before I could pump gas. Uh, ok, but I want to 'fill-er-up', so I told them I didn't know how much it would be. The clerk said that I could just pre-pay as much as I want, and they would refund the difference in cash.

My eyes lit up with $$$!

I pre-paid $40, bought $33.50 of gas (filled-up) and walked out with $6.50 in cash. I wonder if I could have pre-paid $50. Or $100?

Now this MUST violate the merchant agreement!

It doesn't merely violate the dealer agreement, it violates common sense! That dealer is paying a percentage to the credit card company based upon what he rings into the charge machine, not the gas pumped.

I'm trying to figure out if that dealer might be doing something that makes it easier for them to scam people (by stealing credit card numbers). Not knowing their setup, I don't know.

Even when using debit cards, there's a separate merchant agreement that must be signed if you want to give cash back on a debit transaction.

Since the merchant pays a couple percent fee, the bank shouldn't care. The merchant is certainly violating all rules of common sense, returning 100% of the cash.

The bank cares big-time because they have very substantial charges for "cash advances" and have no intention of allowing merchants to do so for free, even if at their own (the merchant's) expense. The cash advance fees are typically a 3% straight-up service fee (or minimum $10) plus interest. Merchant fees don't generate that kind of money.

I honestly doubt it. The clerk claimed that ownership instituted the policy because they had some people give a credit card at the counter, pump, and drive off. When they went to charge the credit card, it was frozen. So now they want to have it pre-paid. She even agreed it was a bizarre policy.

It is stupid of ownership to this, as they are paying fees on revenue they didn't get. But there are plenty of stupid people in the world, and I'm sure plenty own gas stations.

it does not necessarily violate common sense, if the station views the time and effort to process refunds on credit card transactions is not worth recouping the merchant fee (if it can be recouped at all).

but don't get too excited - they're not going to let you clean out their till.

Even if an account is closed, it's usually still possible to process credits (refunds) to it, even if new charges aren't possible.

To sum up, all card merchant agreements prohibit what the OP is suggesting. There are some merchants that goof up and do it anyway, but they're in the minority.

The other issue is that large amounts of refunds posted to a card are a fraud flag, especially when there haven't been corresponding purchases. The card company will shut you down pretty quickly.

The problem for a merchant with the buy one on/refund on another is that the card used to purchase is likely a premium card (hence the miles) and the card used to refund is a basic card. So the merchant has to pay something like 3.5% on the purchase, and then gets back at the most 2% on the return. Now, many merchant accounts don't even refund fees on returns, so it could be a straight 3.5% loss for the merchant.

It's worse than you think. Unless you void a transaction, which can only be done on the same day it was made, the merchant is on the hook for the transaction fees & percentage, and does not recoup any of that on a refund. The rationale is that it's a processing fee, and the charge card company is, after all, processing, even when it's later returned. As merchants, we are supposed to feel lucky they don't charge us a fee on the return as well. :mad:

And, to further skew this nonsense in the banks' favor, they take away the rewards from the customer on the return. So the miles/cashback/whatever that they "awarded" to the customer in exchange for the 3.5% charge to us merchants get taken away from the customer. So the bank gets the 3.5% AND they don't have to pay a premium to the charger. And I don't see Obama stepping in on this one.

OK, aside from the issue of whether it's unethical or fraudulent, I still don't see how this would result in earning more miles.

Let's say this month you spend $100,000 and return $50,000. If you do it all on one card, you'll get a net of 50,000 miles (assuming 1 mile per $).

If you spend the $100,000 on the mile-earning card, and then return the $50,000 on a non-mile-earning card, it appears as though you'd earn 100,000 miles. But here's the catch - the $50,000 refund on the other card won't be given to you in cash, right? As a result, that card issuer would only offset that $50,000 against past (or perhaps future) purchases...meaning that you'd end up having to spend a net $50,000 on that card too.

End result: You'd have spent $150,000, and then returned $50,000, and received a net of 100,000 miles - the same total you'd have if you would have just made all the purchases and returns on the same card.

Am I missing something here? Are there card issuers that would give you the $50,000 in cash if you don't make any purchases? Sorry if I'm missing something obvious, but I just don't see that happening....

I guess you are right, but there are special circumstances.

Example:
I do have two different Amex cards, one earns MR (one per euro), the other miles on an airline (two per euro). The MR-earning-card I rarely use, but there are co-cards for family which earns MR for me.

I booked a hotel on the internet using the miles-earning-card. I don't know the exact amount, so let's say it was 100 euro, so I got 200 miles.
Then when I checked in, they made a mistake taking another 100 euro for this stay from the card on file, so another 200 miles.
They discoverd their mistake, so they asked for my card to return the 100 euro. I gave them my MR-earning-card, so 100 points less.

In my case I almost never use the MR-earning-card but the co-cards are used frequently, so I earned 200 miles giving away 100 points.

BTW, in my case it wasn't intentional, but my other card was in my room at that time, while I was carrying the card which I used for the credit.

I've had large credits on rarely-used cards from time to time, and the cc bank just cuts me a check to clear off the negative balance.

Yes. When you get the statement with a credit balance, just ask for a check refund. They will typically send it to you within a week or so.

I did this in Bealls outlet today. Returned one item on Amex that had been bought on a different Amex. As long as you use the same card issuer for buying and returning the same time, it should work - with MC, VS, TD, etc.

I'm impressed. Over 4 years as a member before a first post, and it's to a 9-year-old thread. :p