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Wrong code = no rewards?

By Janna Herron · Bankrate.com
Monday, October 7, 2013
Posted: 2 pm ET

If your rewards credit card doesn't correctly identify your retailer, you might not get the rewards you're owed.

That's what happened to one New Jersey man who put all his gas purchases from one fuel station on his rewards card that earned 5 percent back on gas.

After using the card for three years, he realized that he wasn't getting the cash back he thought he had earned, according to a local news report from NJ.com. The card issuer said the 5 percent back in rewards was given for "paid-at-the-pump" purchases, but the man paid an attendant, per state rules. New Jersey doesn't allow drivers to pump their own gas.

The purchases were coded one way that indicated they were not automated pump purchases, so he earned the standard 0.25-percent rebate rather than the 5 percent. The man, with help from NJ.com, disputed the rewards system with the card issuer, claiming that no consumer knows how a retailer is coded. The card issuer offered the man half of the points he earned to end the dispute.

This scenario is more common than you might think. All the payment networks -- Visa, MasterCard, American Express and Discover -- give retailers self-identifying codes to distinguish a department store from a supermarket. And these codes help issuers dole out rewards points.

For example, the American Express Blue Cash Everyday Card gives 3 percent back on supermarkets. But if you look at the small print, that includes only stand-alone supermarkets, not superstores such as Walmart or warehouse clubs like Costco. You also get 2 percent back on gas stations, but not those at a superstore, supermarket or warehouse club.

This is an important consideration when you're shopping around for a rewards credit card. If you do most of your food shopping at Walmart, a rewards card that gives more back for groceries might not help you if superstores are excluded.

For those cards that have rotating bonus categories each quarter, it's also key to read the fine print to max out the bonus. For instance, Discover is giving 5 percent back for online purchases from October to December (up to $1,500), but the online purchases exclude travel, utilities, education providers or government products or services.

In the end, always read the terms and conditions of your credit card rewards program and check regularly to make sure you're getting the rewards you earned.

Have you run into trouble with coding and rewards?

Follow me on Twitter: @JannaHerron.

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