What would happen if...
 

one buyed something (say an expensive refundable airline ticket) with a mile-earning credit card, used the miles earned to book an award, and later returned the initial purchase? Would they just take away the miles (assuming there are enough in the account at the time of refund), or could something more serious happen?

I'm sure this is purely hypothetical...

The best that would happen would be that you would have a credit on your card, and wouldn't earn any additional miles until you "burned off" that credit.

They could "revoke" the miles and potentially cancel your award ticket.

In the worst case, if they determined fraudulent intent, they could take legal action.

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Surely you woudnl't actually earn the miles till you did the trip. Booking a trip per se doesn't get you any miles.

At least on some mileage earning credit cards, if not all, they have the ability to pull the miles back out of your account. If you've already spent the miles, I guess you'll have a negative balance. Maybe they'll contact you and try to cancel the tickets.

Booking a trip gets you miles from the dollars spent on your credit card. You wouldn't get any miles from the airline until you did the trip, but the purchase credit miles would show up as soon as you paid the bill.

AMEX and DL are dealing in MILLIONS of miles a month, not just the 10 or 12,000 you need. Although I have never bought extra to buy a ticket I have had returns that resulted in more miles being issued than were actually charge and paid. All DLAMEX did was deduct them from the next statement.

For instance month 1 Charged $1000.00
awarded 1000 miles

End of month returned $500 item so total invoice next month ended up being a credit of $50. Miles awarded 0,

Next month invoice $2500 Miles awarded 2450.

No fraud or intent of fraud, credits happen every day. Now if you charged $24,000 tickets, got the miles, Returned the tickets, and then closed the charge account so they could not "re-coup" the miles spent then maybe AMEX would say something fishy is going on.

I am sure that they loose thousands of miles a month though, as cardholders die and/or declare bankruptcy. Most states don't hold heirs liable for charge card accounts and they are written off. I don't know if AMEX goes to the trouble to reclaim the miles from DL or just writes them off also.

The miles get credited at the end of the billing cycle.

"What would happen if..." what?

oh.