topic Re: Amex Merchant Category in Credit Cards

Amex Merchant Category

Anonymous — Sun, 14 Oct 2018 01:33:01 GMT

Does Amex classify businesses differently to avoid paying spending bonuses?

Here’s why I ask: I live in South Florida and there’s a local meal prep/delivery service that I’ve been using for about a year. This company uses PayPal as their payment processor. The entire time I’ve been using this company, I’ve had my Amex Platinum linked to PayPal and when the charges would post, they would always post as “Restaurant - Restaurant” for this company.

Last week, when Amex announced the 4x spending on restaurants for the new gold card, I changed my default payment method on PayPal to my Amex gold. This week, when the transaction posted on my gold card for the meal prep, it’s suddenly listed as “Business Services - Internet Services” which will avoid the 4x bonus spend at restaurants.

So on a card that earns no restaurant bonus, they categorize this meal prep service as a restaurant, but on a card that earns restaurant bonuses, it’s not. This seems pretty shady. Is it typical? Do all companies do this?

Re: Amex Merchant Category

kdm31091 — Sun, 14 Oct 2018 01:41:41 GMT

The code that appears when the charge processes doesn't always coincide with the actual rewards you recieve. For example, when I had the BCE, a Target charge would list as "groceries" but it would still only get 1%. So while it is usually accurate, it is not 100%, and doesn't always determine your actual reward.

Re: Amex Merchant Category

NRB525 — Sun, 14 Oct 2018 05:17:43 GMT

AMEX gonna code what AMEX wants to.

Re: Amex Merchant Category

CreditInspired — Sun, 14 Oct 2018 07:48:05 GMT

Hmmmm. I didn’t realize the CCC provided the coding. I thought the vendor did.

Re: Amex Merchant Category

kdm31091 — Sun, 14 Oct 2018 13:04:47 GMT

@CreditInspired wrote:
Hmmmm. I didn’t realize the CCC provided the coding. I thought the vendor did.

The vendor does, but Amex can still choose to exclude certain merchants from giving you bonus rewards. Even on some cards that offer "grocery" rewards, they explicitly do exclude Walmart/Target, so even if they come up as "grocery" you won't get the points.

Re: Amex Merchant Category

Shadowfactor — Sun, 14 Oct 2018 13:24:26 GMT

I work for a POS company, based on my experience.

A lot of the time Amex uses different MCC’s then V/MC.
While I agree it’s odd that before it posted as a restaurant and now it’s posting as something different, this doesn’t mean that you would have received extra points had it shown up as restaurants.

MCC is determined by the Merchant and payment processor. Amex is the processor of its own network, but it does bundle it out to 3rd party companies if the merchant does below a certain amount of business. This is all negotiated to try to obtain the best rates. Some businesses will classify as something different if it saves them money on the swipe fees.

The one thing I’ve noticed with Amex is that any online purchase codes as such. It normally always shows internet purchase somewhere in the MCC. Card not present normally gets higher swipe fees so that may have something to do with it.

Re: Amex Merchant Category

K-in-Boston — Sun, 14 Oct 2018 14:35:22 GMT

+1 @Shadowfactor
The Amex program for merchants to be able to process Amex using their existing V/MC processor is called OptBlue and the annual sales cap is $1 million.

Re: Amex Merchant Category

Anonymous — Sun, 14 Oct 2018 15:16:01 GMT

Gotcha! Thanks for the helpful info, I appreciate it.

Re: Amex Merchant Category

zerofire — Sun, 14 Oct 2018 22:51:14 GMT

If the code comes across onto your statement in a less than expected way you can call AmEx to talk about it. Since they are both the card issuer and the network provider they can see the whole thing end to end. I have had cases in the past with Discover where some things coded funny. I had a case of a Restaurant that I sat down and ate come up as Miscellaneous Retail. Obviously they checked what the restaurant was reporting to them and found the reporting code was correct but the grouping was a mistake and it did go under Restaurants 5%.

Re: Amex Merchant Category

Anonymous — Mon, 15 Oct 2018 16:53:19 GMT

So when reading this - I am a bit confused.

Isnt the charge actually made to Pay Pal ? And Pay Pal is not going to be in the resturant category or any category except "other".

So from Amex or any other CC's point of view - this is a Pay Pal purchase and not a resturant/dining purchase.

Am I wrong?

Re: Amex Merchant Category

Anonymous — Mon, 15 Oct 2018 17:18:56 GMT

That’s what I always assumed, that since PayPal was processing the charge it would post as some sort of internet transaction. But for a year; it’s always posted as “Restaurant.”

Until I started using my gold card, now it posts as an internet transaction.

Re: Amex Merchant Category

zerofire — Mon, 15 Oct 2018 23:02:22 GMT

@Anonymous wrote:
So when reading this - I am a bit confused.

Isnt the charge actually made to Pay Pal ? And Pay Pal is not going to be in the resturant category or any category except "other".

So from Amex or any other CC's point of view - this is a Pay Pal purchase and not a resturant/dining purchase.

Am I wrong?

Yes, you are.

If you have a Visa or MasterCard and paid attention on a lot of purchases that go through PayPal you will notice that PayPal transactions can have different codes. I have seen Electronics, Miscellaneous Goods, and other categories. PayPal has become a processor and no longer sets the code as itself unless it is making the charge for fees. PayPal transactions will normally code as whatever business you are really interacting with so the correct code would have been Internet Services - Restaurants. Now AmEx probably does not have that code so Restaurants - Restaurants is a better match. The fact that it went through PayPal merely makes some smaller processors like AmEx scratch their heads because PayPal has evolved so much that it breaks the normal thought process.

This can easily be rectified by a phone call and talking with a rep. They are happy to do second looks as other customers might have similar problems if they do business there.

Re: Amex Merchant Category

Anonymous — Mon, 15 Oct 2018 23:18:08 GMT

Thank you for the suggestion, I’m definitely going to give Amex a call this weekend and see what’s happening. I’ll y’all posted.

Re: Amex Merchant Category

Anonymous — Wed, 17 Oct 2018 03:27:53 GMT

From my experience, they do seem to code differently than Visa/MC. I've used bot cards at the same place, and while Chase lists it as Grocery, Amex codes as Wholsale etc. They do somehow seem to get out of paying the bonuses 75% of the time I've used them. That's why I don't rally feel the new Gold is that special by offering 4X points on Dining and Grocery. It's way too hit or miss IMO.

Luckily I make up for it with the Amex offers once in a while though.