topic Re: The end to Amex Airline GC workaround ? in Credit Cards

The end to Amex Airline GC workaround ?

Shadowfactor — Wed, 13 Feb 2019 03:18:50 GMT

Currently this is only affects AA if it pans out. I suspect that Amex may have had a hand in it as they are the card processor after all.

I’ve never been a big fan of TPG but why would they go as far as contacting American Airlines about the issue.
I understand Amex is probably well aware of the workaround by now thanks to all these blogs. But there’s no point in drawing even more attention to it in the offchance it was just a fluke.

https://thepointsguy.com/news/potential-change-american-airlines-gift-cards-amex-airline-fee-credit/?utm_term=Editorial&utm_campaign=FACEBOOK-100000283455255&utm_medium=social&utm_source=FACEBOOK&fbclid=IwAR2jz2Rab-K-NU32qCKvu8e4vuhhAwtavfbI4ILQpnUJ9n685IagQZLMLB0

Re: The end to Amex Airline GC workaround ?

simplynoir — Wed, 13 Feb 2019 03:30:30 GMT

Pretty sure AMEX knew but didn't do anything about it it's not a well-hidden secret.

Re: The end to Amex Airline GC workaround ?

Shadowfactor — Wed, 13 Feb 2019 03:34:56 GMT

@simplynoir wrote:
Pretty sure AMEX knew but didn't do anything about it it's not a well-hidden secret.

I’m 100% positive they do know. It becomes a matter of how many cardholders know about it and are using it to get things to change.

amex expects breakage in the credits, if there wasn’t enough breakage it may have prompted a change on this very well know “secret”

Re: The end to Amex Airline GC workaround ?

simplynoir — Wed, 13 Feb 2019 03:37:47 GMT

Enough blogs mention this "workaround" in my opinion for it to be a non-issue as the true purpose of this. I doubt that's the real reason they stopped that loophole if indeed they finally got around to fixing it.

Re: The end to Amex Airline GC workaround ?

Anonymous — Wed, 13 Feb 2019 04:47:05 GMT

I wouldn't be surprised if they "fix" this, but I also wouldn't be surprised if they didn't - after all, the travel credit for the CSR and now even the Citi Prestige are not restricted as such and can be used for airline tickets. With the ability to use the Amex credit for gift cards "on the low", it's like an under the table way for Amex to be competitive with the CSR and Prestige's travel credit, yet without actually making it so clear that everyone will be aware of the possibility. Basically it gives solid utility for the credit but still saves Amex a lot of money because a lot of consumers will not even be aware that you can use it for a gift card.

Re: The end to Amex Airline GC workaround ?

red259 — Wed, 13 Feb 2019 05:53:12 GMT

@simplynoir wrote:
Enough blogs mention this "workaround" in my opinion for it to be a non-issue as the true purpose of this. I doubt that's the real reason they stopped that loophole if indeed they finally got around to fixing it.

Oh I wholly disagree with this. I believe the blogs and media are the very reason this loophole was shutdown. There was an absurd number of articles this year in December and Jan about airline giftcards. Amex knew about this all along but the people do it were just a small percentage of people and it wasn't worth it for amex to bother fixing this. However, with the bloggers pushing these cards and spelling out exactly what to do to get giftcard credits etc etc it started costing amex a whole lot more money where even the most basic credit card user stumbled across these blogs or an article based on a blog and started doing it. Its clear that when soo many people start maximizing the airline credit in this way it throws Amex's plans out of whack because the credit is designed in a way where most people wouldn't be able to maximize it (e.g., having to select a specific airline, only able to use the credit on certain purchases etc) and so when too many people started doing it then it cost amex too much money and it seems like they took action.

Re: The end to Amex Airline GC workaround ?

red259 — Wed, 13 Feb 2019 06:01:47 GMT

@Anonymous wrote:
I wouldn't be surprised if they "fix" this, but I also wouldn't be surprised if they didn't - after all, the travel credit for the CSR and now even the Citi Prestige are not restricted as such and can be used for airline tickets. With the ability to use the Amex credit for gift cards "on the low", it's like an under the table way for Amex to be competitive with the CSR and Prestige's travel credit, yet without actually making it so clear that everyone will be aware of the possibility. Basically it gives solid utility for the credit but still saves Amex a lot of money because a lot of consumers will not even be aware that you can use it for a gift card.

Honestly if they have limited my ability to use airline credits then I'm going to have to reevaluate all my amex cards with that feature and quite a few of them will likely have to be closed. All the plats will go because of this and maybe even the Aspire will get tossed now. Heck I will still have to look at the amex gold card and make a judgement and I really liked that card. With Chase and Citi stepping up with travel credits I'm disappointed that Amex is going the opposite direction.

Re: The end to Amex Airline GC workaround ?

budugu — Wed, 13 Feb 2019 06:29:54 GMT

Amex should simply follow Citi / chase make it travel credit. Infact even if they remove the airline restriction that would be a great thing. That and making points 1c for cash redemption are the two biggest pet peeves I have with them (also forex fee on 95$ cards!)

Re: The end to Amex Airline GC workaround ?

red259 — Wed, 13 Feb 2019 07:02:12 GMT

@budugu wrote:
Amex should simply follow Citi / chase make it travel credit. Infact even if they remove the airline restriction that would be a great thing. That and making points 1c for cash redemption are the two biggest pet peeves I have with them (also forex fee on 95$ cards!)

Yea in the end these type of games with the airline credits are going to cost amex business, because citi and chase make it much easier to use travel credits on their premium cards, especially with Amex increasing the AF on some of their premium cards and the prestige stepping up when it comes to airfare.

Re: The end to Amex Airline GC workaround ?

Anonymous — Wed, 13 Feb 2019 09:58:20 GMT

It's hard to imagine amex doesn't know this method.

Amex also needs to know, and I bet they do, that shutting down this will lead to loss of many business as well.

Yes, it's a loophole, but amex is a beneficiary of it too.

Re: The end to Amex Airline GC workaround ?

Anonymous — Wed, 13 Feb 2019 11:18:53 GMT

If this is indeed fixed this kinda changes things in regards to my gold. I’m glad I got my 100$ gift card last month instead of waiting but this is definitely a bummer.

It will definitely be a lot harder to use the credit going forward which would probably steer many people away from the airline fee credit cards. Looking on the bright side, this would give me no reason to keep my AA Plat going forward.

Re: The end to Amex Airline GC workaround ?

Anonymous — Wed, 13 Feb 2019 11:43:33 GMT

I will assess this after a year and see where my spending it. For the gold, depending on how much you value the MR points, one needs to spend 2k to 5k more to beat a 2% card if the AF is changed from 30 to 130.

If my spending won't support this, I will just close it.

Re: The end to Amex Airline GC workaround ?

Anonymous — Wed, 13 Feb 2019 12:45:19 GMT

A new workaround seems to be emerging.

1. Find flight ticket, let's say it costs A.
2. Buy gift card worth B, ensure A-B is around 100 or less (amex reimbursement mechanism seems to be number based)
3. Apply the gift card, put the remainder balance on amex and it will then be credited for the amount of A-B.

Some DP at flyer talk seems to suggest this will work.

Re: The end to Amex Airline GC workaround ?

Anonymous — Wed, 13 Feb 2019 13:45:37 GMT

Yea it sucks because I literally just got the BBP to compliment my gold. My AF is due in October so I will go from there.

So basically you buy a gift card then use it as a partial payment towards a flight and it should trigger the credit?

Re: The end to Amex Airline GC workaround ?

kdm31091 — Wed, 13 Feb 2019 13:58:33 GMT

Is anyone really shocked if they did plug the loophole? Bloggers, such as TPG, basically did it in. Obviously the credit was never meant to cover GC purchases. I wouldn't be surprised at all if Amex's RAT team has simply decided enough is enough. They want people who are going to use the card for travel purchases (not gift cards), and they of course want some amount of breakage. With the gift card thing, there is no (or very reduced) breakage.

Re: The end to Amex Airline GC workaround ?

kdm31091 — Wed, 13 Feb 2019 14:00:51 GMT

@Anonymous wrote:
It's hard to imagine amex doesn't know this method.

Amex also needs to know, and I bet they do, that shutting down this will lead to loss of many business as well.

Yes, it's a loophole, but amex is a beneficiary of it too.

The thing is that on some level they want to lose that business. Amex doesn't want people who are exploiting loopholes. They want to advertise travel credits and pay them out to legitimate users and/or pay out as little as possible. This loophole makes it too easy for anyone to use, meaning people who really cannot justify the card are justifying it, coming ahead against the AF, and Amex is losing money.

It sucks, but I don't think they will lose any business they really are concerned about

Re: The end to Amex Airline GC workaround ?

redpat — Wed, 13 Feb 2019 14:35:32 GMT

I'm hoping this will make the Centurion Lounges less crowded.......

Re: The end to Amex Airline GC workaround ?

Anonymous — Wed, 13 Feb 2019 14:43:03 GMT

@Anonymous wrote:
Yea it sucks because I literally just got the BBP to compliment my gold. My AF is due in October so I will go from there.

So basically you buy a gift card then use it as a partial payment towards a flight and it should trigger the credit?

idea is that amex will reimburse anything around 100 or less coming from an airline, because it thinks that much amount cannot be a ticket, so it must be a fee.

this seems to be the case at least with delta, as people has reported amex credit 100 or more even if its ticket cost.

this has not been tested with AA, at least I don't think it has been tested. But if AA GC is out of the window, this may just worth a try.

Re: The end to Amex Airline GC workaround ?

Anonymous — Wed, 13 Feb 2019 14:56:38 GMT

Hmm I agree. I’ve used up my Credit last month (thank goodness) for a gift card so I wouldn’t be able to try till next year, assuming I do keep the card.

Like most people, I never buy anything while in flight so that credit being limited to that would be pretty useless. I don’t like having to go out of my way to purchase something I normally wouldn’t.

Re: The end to Amex Airline GC workaround ?

Shadowfactor — Wed, 13 Feb 2019 15:16:33 GMT

@kdm31091 wrote:
@Anonymous wrote:
It's hard to imagine amex doesn't know this method.

Amex also needs to know, and I bet they do, that shutting down this will lead to loss of many business as well.

Yes, it's a loophole, but amex is a beneficiary of it too.
The thing is that on some level they want to lose that business. Amex doesn't want people who are exploiting loopholes. They want to advertise travel credits and pay them out to legitimate users and/or pay out as little as possible. This loophole makes it too easy for anyone to use, meaning people who really cannot justify the card are justifying it, coming ahead against the AF, and Amex is losing money.

It sucks, but I don't think they will lose any business they really are concerned about

I completely agree with you on this.

The only small caveat is that when you fly premium cabin and/or have airline status you already get all these things for "free" that the credit covers, so the GC trick was a nice way for those people to utilize the credits.

As someone that has $550 a year in Amex Airline credits. It won't make me run to cancel my cards but if this pans out it will make me focus on the earning potential of the cards more as I will have to offset those AF's somehow.

Thankfully I've already used all $550 of the airline credits for this year.

Here's to hoping that Delta GC's dont change, as that will be my stratergy for next year. Will be stockpiling these for a rainy day when my AA flying will be over.