Saving Big with Credit Card Price Protection
PRICE PROTECTION IS A LITTLE-KNOWN, NOT-USED-NEARLY-ENOUGH BENEFIT OFFERED BY SOME CREDIT CARDS THAT WILL REIMBURSE YOU FOR A PRICE DROP THAT HAPPENS AFTER YOU PURCHASE AN ITEM.
THE MOST ANNOYING THING EVER
You know what's frustrating as a shopper? Thinking you got a great deal on something you bought, only to see the price drop after you buy it.
The most staunch bargain hunters among us might sheepishly return the item for a full refund, if it's allowed, just to turn around and buy it again at the lower price.
For those of us who don't think that's ethical, don't feel comfortable doing that, or can't return the purchase for a full refund, there is a way to get reimbursed for the difference between the price you paid for an item and the price it's on sale for now.
I know what you're thinking: "fo' real?!"
Yes, fo' real.
It's called "Price Protection", my dear children, and is in fact smiled upon by smart credit cardholders everywhere.
PROTECT YOUR PURCHASE
Price protection is a little-known, not-used-nearly-enough benefit that roughly 47% of credit cards offer. Read your credit card benefits guide to see if you've got it. Price protection will reimburse you for the savings you missed out on if you bought an item at a certain price, and then shortly thereafter discovered that the price had been lowered at the the same place you bought it from.
This solves multiple problems for savvy consumers: if you've been waiting for an item to go on sale and it finally does, you feel good about pulling the trigger on it. Part of you wants to wait to see if the price drops further, but you also run the risk of it getting sold out. So you buy it, take it home, and resist opening the package in case you can return it for a full refund. But after three weeks, the price stays the same, so you go ahead and open your item, only to see the price lowered the next time you go to the store.
Urgh. Talk about deal-seeker's remorse.
At this Christmas time of year, the implications are even cooler. For example, if you buy your little Ralphie a Red Ryder Carbine Action 200-shot Range Model Air Rifle BB Gun that costs way more than it should, you can keep your eye on the price at the business you bought it from. If the price drops after Christmas - which is very possible - you could file a price protection claim and get money credited back to your card. It'll be as if you bought it at the lower price, except that you were still you able to buy it before Christmas so that Ralphie could still shoot his eye out on Christmas morning.
THOU SHALT KNOW THE RULES OF THY PRICE PROTECTION
If you're going to reap the rewards of price protection, you have to follow the rules.
Credit card companies, while offering this perk to make their cards more attractive, still would like to lower the amount of claims they have to honor. So they create some terms and conditions with which you must comply.
The first time I tried to use price protection, I didn't look carefully enough at the fine print and it didn't work (I shared that experience on CreditCards.com, if you want to check it out). My credit card company nailed me on a technicality and refused to offer the reimbursement.
But I learned my lesson and the next time I did it right.
SUMMARY OF POTENTIAL RULES
Obviously, each card is different, so it's your responsibility to know the ins and outs of your credit card's Price Protection feature.
Here are the most common parameters, so you get an idea of how it breaks down.
Must be purchased in full or in part by the credit card: no brainer. Sometimes though, if you "bought" the item with points redemption you can still make a claim.
Price drop time limit: the lowered price has to happen within a certain number of days of your purchase. 90 days is common.
Time limit to file a claim: you also have a deadline on how soon you have to contact your credit company to get reimbursed. For my card, it's "within 21 days of the date of advertisement" of the lowered price.
Reimbursement limit per item: there is a limit to how much they'll credit back to your card for each item you're filing a claim on, but it's quite a bit - as much as $500 on a lot of cards, which means you should really pay attention when you're buying big ticket items like electronics, appliances, or furniture.
Total reimbursement limit per year: you can only use price protection up to a certain benefit amount per year, say, $2,500. But every year this amount resets and you can again go ape on getting your credit card company to pay for part of your purchases!
Documentation: this is a huge one. At a minimum, expect to provide 1) an itemized receipt of purchase, 2) a copy of the printed advertisement or snapshot of online page showing the price of the item on the date you bought it, and 3) a copy of the printed or online ad showing the lowered price on a date after you bought it. Don't stop there - just keep documentation of anything and everything you can, because your card benefits guide can still contain a clause like mine does: "any other documentation deemed necessary to substantiate the claim."
No extraneous costs: okay, so it's not a full refund. They usually won't reimburse for more than the item itself. Thus, things like sales tax and shipping and handling aren't covered.
Restrictions on items bought: there are certain things you can't get price protection for, such as living animals, cell phones or cell phone agreements, used or refurbished items, jewelry, and anything at an auction site (no eBay), just to name a few. Read your full list!
RACK UP THE REIMBURSEMENTS
Once you thoroughly understand how your Price Protection feature works, use it to save yourself some big bucks!
A couple more thoughts: I don't know if it's worth the hassle to use price protection on every little thing. You can definitely go overboard and spend too much time price-stalking something you already bought just to maybe get a partial reimbursement.
In my mind, price protection is most valuable once you get in the $150-200 range or higher. Then, a 10% drop in price would result in at least $15-20 savings. For really big ticket items, you could obviously save hundreds of dollars per claim.
One last note: to make using price protection an even more hands-off experience, consider using a price alert app or service to track prices for you. Then, you can be assured that if the price for something you bought goes down, you'll get a simple badge notification or email.
Have fun hacking your Christmas shopping!
