July 13, 2007

Discover Card's Horrible Rewards Program

I finally managed to cancel my Discover Card after trying to get my last $20 rebate check. I'm never going to sign up with Discover again; they have the absolute worst rebate program I've ever had to go through. I originally signed up because they were offering 5% back on purchses at home improvement stores, which for me is an excellent deal. I buy things from The Home Depot and Orchard Supply Hardware pretty often, and the 5% back really added up. But then they decided to switch to a crazy quarterly rotating rebate system. Which resulted in me spending a year working on reaching that last $20.

Under this new rebate system, the category of purchases changes every fiscal quarter. So for three months of the year, you might get 5% back on travel purchases like airline tickets or cruises. Then it'll switch to bookstore purchases. And then maybe clothing stores. This is incredibly annoying. You have to keep track of the current quarter's cashback categories, and you even have to keep track of specific stores. For example, when the category is books, you might get 5% back at Barnes and Noble but not at Borders. All other cards I've used apply cash rebates to the category as a whole, without exception.

Discover Card also has a tiered system of how much percent a purchase is worth in cashback points. So you may not always get the cashback you expect on a purchase. This effectively reduces your cashback rate below 5% or 1%, depending on the purchase category and your current expenses that year. You might notice the wording in all their documentation is "up to 1%". In contrast, all other cards I've used with cash rebates apply a flat percentage to all purchases, so I always know what I'm going to get back.

I also discovered a nasty little surprise, that may be in the fine print, but took me a few months to figure out. You don't get any cashback points for purchases you make if you pay off your balance before receiving a statement. In fact, Discover Card didn't even send me statements for those billing periods where I'd paid off my balance in full, before the period ending date. So, even though I might have bought something eligible for some cash back, I didn't get anything. People who do carry a balance, but might pay multiple times per billing period, or pay in advance, might never even notice this, especially since it's so hard to be sure exactly what amount of cashback you're supposed to get.

Posted by josuah at July 13, 2007 5:17 PM UTC+00:00

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