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Most consumers don’t have the time or patience to comparison shop. Instead, they buy what they want when they see it. That’s normally fine, but the price sometimes drops right after they purchase the item. They walk into the store one day and see it is hundreds of dollars less than what they paid.
That is frustrating, but the consumer might not be out the extra money after all. Around half of credit cards offer some type of price protection as a perk. This is a valuable service for consumers, but they have to know how to use it.
The credit card company isn’t going to reach out to the consumer if the price drops. The consumer has to take action to use the service. Otherwise, he or she will be stuck paying the higher price for the item.
How Does Price Protection Work?
Consumers who buy something and find it at a lower price within a predetermined amount of time are eligible for price protection if they purchased the item on a covered card. Most of these cards offer the protection for 60–120 days from the date of purchase. The credit card company refunds the difference between the two items. That does not include taxes or shipping.
The two items must be exactly the same. They must be the same model number and manufactured by the same company in order for this to work. If there is any difference between the two items, it won’t be eligible for price protection.
Consumers typically have to register the item with the credit card company for it to be eligible for price protection. They also have to file paperwork to receive the refund. If they don’t have any of the paperwork necessary, they cannot take advantage of price protection.
Let’s look at an example to get a better understanding of how this works.
Joe goes to Retailer A and purchases a new television with his credit card. He pays $1,025 for the TV and feels good about the purchase.
Three weeks later, Joe stops by Retailer B and finds himself in the television section. He sees the exact same TV for $200 less.
Since Joe’s credit card has price protection, he knows he can get the money back. He begins by grabbing an ad with the TV on it to prove the lower price. He makes sure the ad is dated so the credit card company knows the price drop occurred within the set period.
Then, he goes home and gets his original purchase receipt and his credit card statement with the charge on it.
Finally, he calls his credit card company. The credit card company asks for all of the information he has collected. He provides the information and his claim gets processed. Before long, he gets his $200 back.
Joe can make additional claims throughout the year. However, most credit card companies have limits in place. They limit either the number of claims or the amount of money claimed. That means Joe can continue to save on this feature until he hits the limit. Then he must wait for the following year before making additional claims.
Now let’s look at credit card companies that offer this benefit.
Discover Credit Card Price Protection
All Discover cards come with price protection. Discover’s price protection policy covers purchases for 90 days from the date of purchase. There is a maximum benefit of $500 per claim or $2,500 per year.
There are some exclusions with Discover’s price protection policy. It does not cover various items, including:
- External and internal hard drives
- Power supplies
- Printed materials
Discover does not charge a fee for price protection claims. Claims are made by calling 800-347-2683.
When making a claim, cardholders need:
- Itemized receipt
- Credit card statement
- Copy of a dated ad with the item or a signed statement from the store manager about the sale
Discover starts processing claims as soon as they’re made. The customer service representative can provide a timeframe for receiving the refund.
Capital One Credit Card Price Protection
Capital One offers price protection on Platinum Prestige, Classic Platinum, Platinum, Quicksilver One Reward, and its secured credit cards.
Claims can be for up to $250, and there is a maximum of four allowed claims per year. Claims are accepted when the lower price is found within 60 days of the purchase. However, claims can be made for up to 180 days from the purchase.
To submit a claim consumers need to call customer care at 877-383-4802. They need their receipt and the credit card statement with the purchase. They also need an ad that has the lower price.
Capital One has numerous exclusions on this protection. It does not cover:
- Layaway items
- Antique items
- Used items
- Motorized vehicle
- Perishable items
It also doesn’t include items that are advertised at a limited quantity or going-out-of-business sale items. In addition, close out and discounted items are not available. It also doesn’t work on tickets.
The customer service representative will provide a timeframe for receiving the refund after getting all of the information.
Price protection is a valuable service for consumers. It saves them time on comparison shopping and ensures they get the best deals on items. There are some limitations with the policy, but those limitations do not prevent people from potentially saving lots of money on big-ticket items.
Those who have price protection need to understand the rules for their specific credit cards. Then they are encouraged to look for lower prices after they buy items. They might end up saving hundreds of dollars due to price drops. This is much easier than returning items and then buying the sale item.
Author: Jeff Gitlen, CEPF®
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