topic Costco Gift Cards counting as Cash Advance with Disco???? in Credit Cards

Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Mon, 26 Jun 2017 06:52:25 GMT

Just made a purchase of a Costco Gift Card so I could use my Disco card while shopping Costco in store and after purchase got an alert that I exceeded my Cash Advance Limit.

My Cash Advance Limit is $100 and the purchase was for $125, but I don't know why it would code as a cash advance has anyone else had this issue?
Please Help!!!

Here's the email from a Discover, "your Discover card purchase or cash advance exceeds the amount you have set

Merchant: WWW COSTCO COM
Amount: $125.00
Date: June 26, 2017
Wasn't you? Call us immediately at
1-800-DISCOVER
(1-800-347-2683)

See Recent Activity
Update Your Alert Settings".

I've made many purchases over $100 and never had an alert sent so it must be a cash advance but why?!

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Mon, 26 Jun 2017 13:00:54 GMT

@Anonymous wrote:
Just made a purchase of a Costco Gift Card so I could use my Disco card while shopping Costco in store and after purchase got an alert that I exceeded my Cash Advance Limit.

My Cash Advance Limit is $100 and the purchase was for $125, but I don't know why it would code as a cash advance has anyone else had this issue?
Please Help!!!

Here's the email from a Discover, "your Discover card purchase or cash advance exceeds the amount you have set

Merchant: WWW COSTCO COM
Amount: $125.00
Date: June 26, 2017
Wasn't you? Call us immediately at
1-800-DISCOVER
(1-800-347-2683)

See Recent Activity
Update Your Alert Settings".

I've made many purchases over $100 and never had an alert sent so it must be a cash advance but why?!

Did you call them and ask? Maybe you set it up so any online purchase/cash advance over $100 will trigger an alert.

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Mon, 26 Jun 2017 13:04:24 GMT

@Anonymous wrote:
@Anonymous wrote:
Just made a purchase of a Costco Gift Card so I could use my Disco card while shopping Costco in store and after purchase got an alert that I exceeded my Cash Advance Limit.

My Cash Advance Limit is $100 and the purchase was for $125, but I don't know why it would code as a cash advance has anyone else had this issue?
Please Help!!!

Here's the email from a Discover, "your Discover card purchase or cash advance exceeds the amount you have set

Merchant: WWW COSTCO COM
Amount: $125.00
Date: June 26, 2017
Wasn't you? Call us immediately at
1-800-DISCOVER
(1-800-347-2683)

See Recent Activity
Update Your Alert Settings".

I've made many purchases over $100 and never had an alert sent so it must be a cash advance but why?!
Did you call them and ask? Maybe you set it up so any online purchase/cash advance over $100 will trigger an alert.

I think he's asking more as to why it was coded as a cash advance, not why he got the alert.

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Mon, 26 Jun 2017 14:13:52 GMT

Well, dang, that's scary. I just bought $1,600 of Costco Cash Cards over the weekend using two Discover cards. I still see the transactions as pending; I guess I'll have to wait until they clear to know for sure. Over the last year, I've made a habit of doing this; buying Costco Cash Cards at costco.com and using them at the store, probably buying at at least $5k. The only hiccup I've noticed is that in April I bought $500 of Costco cards and on my May statement I didn't get the 5% cashback on it, only 1%. I chatted with a CSR who said they had had problems with costco.com not coming through as bonus-worthy, but no hint about them not being treated as purchases. I did get the cashback retroactively on the next statement.

Anyhow, thanks for the heads-up.

Chris.

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Mon, 26 Jun 2017 14:55:49 GMT

Chris - Actuallt I had that same May statement issue too! No other months had it though.

Maybe the cash advance coding is a glitch in their system? I hope it isn't that they decided to code it as a cash advance because so many people started doing it and it's called a "Costco Cash Card" you know?

Either way I sent an immediate payment from my bank to Disco so the day it posts (sometimes a day before it finishes posting) it's already paid. But honestly it's not like you can go to the counter and ask for cash for it, it's really a giftcard.

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Mon, 26 Jun 2017 15:25:57 GMT

That is odd. Back in April, I bought $1,000 and $500 Costco Cash cards to get the maximum 5% amount (10% since double cash still), and it went without a hitch. Hoping you get it figured out.

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Mon, 26 Jun 2017 16:58:27 GMT

Hmm maybe yours was early April and therefore included in your April statement? Because I bought ones in early April for $50 and $25 and they were on my April statement and I got the 5%. But I also bought one April 27th which was after my statement and was shown on my May statement and that one wasn't given the 5%.

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Mon, 26 Jun 2017 19:15:32 GMT

I would think this is just an error, cash advances are usually restricted to transactions at financial MCC. They could certainpybchoose not to pay rewards, but treating as a cash advance is over the top

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Mon, 26 Jun 2017 21:09:01 GMT

The determination has to do with the way the purchase is processed by the merchant, and also by the way the issuer interprets it.

Language regarding the definition of "cash advance" is (perhaps purposely) ambiguous in most cardholder agreements.

Discover uses:

“Cash Advance” means the use of your Account to:

• obtain cash from participating automated teller machines, financial institutions or other locations;

• purchase lottery tickets, money orders, casino chips, foreign currency or similar items.

Notice "similar items" can be open to varied interpretation.

Amex uses:

A purchase is a charge for goods or services. A cash advance is a charge to get cash or cash equivalents.

"cash equivalents" is perhaps less precise than Discover's list of examples, but really this one seems more clear in a way - if it isn't a "charge for goods or services" then it could be a "cash advance."

Chase uses:

The following transactions will be treated as cash advances: purchasing travelers checks, foreign currency, money orders, wire transfers or similar cash-like transactions; purchasing lottery tickets, casino gaming chips, race track wagers or similar betting transactions; and making a payment using a third party service.

Again, "similar cash-like transactions" is imprecise, so you get the idea...

Gift Cards are considered cash-equivalents. They are purchased for a set amount of money, and carry that exact amount as their value until depleted. They can be used by anyone who has possession of them (bearer instruments) regardless of who purchased them or how. They have no relation to the user's financial, banking, personal, or credit infomation.

Many retailers do let you purchase these with a credit card, and the transaction posts like any other purchase, and everyone goes on about their business.

Unfortunately, though, in some cases a credit card lender will process it like a cash advance, and when they do there really isn't much that can be done - you might have success with interest/fee forgiveness, depending on the relationship you have with the lender, but gift cards are for all intents and purposes "cash equivalents" and so under their agreements we all agree that they can treat those as cash advances, even if it isn't done consistently.

Re: Costco Gift Cards counting as Cash Advance with Disco????

CreditCuriosity — Mon, 26 Jun 2017 22:13:59 GMT

Simple solution drop your cash advance limit down to zero by a call or chat with CSR and this won't happen.. If I have ever been concerned by it I have done this with the majoirty of my CC's when using services such as plastiq to just ensure it possibly couldn't happen. When chatting with the Chase JPM EO they basically stated it had to be an ATM to be counted as a cash advance, but once again I suppose how much do you believe CSR's although very highly trained ones at least in the people I spoke with. With that said I still lowered it on most of my Chase cards to 100 dolalrs

Re: Costco Gift Cards counting as Cash Advance with Disco????

Legal_Girl — Mon, 26 Jun 2017 22:26:24 GMT

Matt4200..... I, like most card users, have notifications set for transactions. I get an email and a text anytime there is a charge of $100 or more placed on my card. The wording you quoted is the exact wording in the alerts I get from Discover. I used my card for $641.00 at the dentist a couple of weeks ago and the text alert read "Your Discover card purchase or cash advance exceeds the amount you have set". If you don't recall setting your notifications for $100, then go to Discover website or their app and check and or change your notification alert settings.

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Tue, 27 Jun 2017 00:42:50 GMT

@Anonymous wrote:
The determination has to do with the way the purchase is processed by the merchant, and also by the way the issuer interprets it.
Language regarding the definition of "cash advance" is (perhaps purposely) ambiguous in most cardholder agreements.

Discover uses:
“Cash Advance” means the use of your Account to:
• obtain cash from participating automated teller machines, financial institutions or other locations;
• purchase lottery tickets, money orders, casino chips, foreign currency or similar items.

Notice "similar items" can be open to varied interpretation.

Amex uses:
A purchase is a charge for goods or services. A cash advance is a charge to get cash or cash equivalents.

"cash equivalents" is perhaps less precise than Discover's list of examples, but really this one seems more clear in a way - if it isn't a "charge for goods or services" then it could be a "cash advance."

Chase uses:
The following transactions will be treated as cash advances: purchasing travelers checks, foreign currency, money orders, wire transfers or similar cash-like transactions; purchasing lottery tickets, casino gaming chips, race track wagers or similar betting transactions; and making a payment using a third party service.

Again, "similar cash-like transactions" is imprecise, so you get the idea...

Gift Cards are considered cash-equivalents. They are purchased for a set amount of money, and carry that exact amount as their value until depleted. They can be used by anyone who has possession of them (bearer instruments) regardless of who purchased them or how. They have no relation to the user's financial, banking, personal, or credit infomation.

Many retailers do let you purchase these with a credit card, and the transaction posts like any other purchase, and everyone goes on about their business.
Unfortunately, though, in some cases a credit card lender will process it like a cash advance, and when they do there really isn't much that can be done - you might have success with interest/fee forgiveness, depending on the relationship you have with the lender, but gift cards are for all intents and purposes "cash equivalents" and so under their agreements we all agree that they can treat those as cash advances, even if it isn't done consistently.

I haven't heard many cases where a retail gift card was considered a cash-equivalent. The real concern from an issuer is ease of repeatability. If I buy a Visa gift card and get a reward, I can fairly easily liquidate it for cash, pay off the card and do it again as many times as I can. With a retail card, it's much less easy to do this. (Yes, I could sell to an online gift card mall, but I could also buy say a TV and sell that.)

Re: Costco Gift Cards counting as Cash Advance with Disco????

txtjjs — Tue, 27 Jun 2017 01:48:33 GMT

I got the same exact message for a non gift card purchase at home depot just last week. It says "purchase or cash advance," which I'm pretty sure means "you either made a purchase over your alert amount" (as most likely your case) OR "you made a cash advance over your alert amount (probably not your case).

Re: Costco Gift Cards counting as Cash Advance with Disco????

Subexistence — Tue, 27 Jun 2017 03:57:00 GMT

That's a smart way to get around the visa problem

Re: Costco Gift Cards counting as Cash Advance with Disco????

Anonymous — Tue, 27 Jun 2017 04:15:44 GMT

Amex won't let us our Amex card to buy tickets at the Dinner/acrade because they consider them to be gambling. But we can buy food at the dinner with Anex.