Apple Pay Promo
You’ve surely heard about Discover’s offer to get 10% back on all Apple Pay purchases until year’s end and how it would be possible to get up to $2200 or more in cashback by utilizing the offer.
- Discover 10% Bonus with Apple Pay, $2,000 Profit per Discover Card!
- 22% Cashback with Discover and Apple Pay (23% with DIM, 30% at Department Stores)
- Which Q4 5% Discover Categories Accept Apple Pay?
- Discover Referral Links Go Here
- Discover Extends Double Cashback Offer for New Cardmembers, Should We Bite?
- Discover’s Apple Pay Deal and the New Gift Card Exclusion
- Discover Enforces Gift Card Exclusion, With Slight Leeway
- Maximizing the Apple Pay Promo without Gift Cards
Gift Card Exclusion
FrequentMiler reports that Discover has now added a gift card exclusion into the terms and they won’t give the cashback on any gift cards. The exclusion was now added to the FAQ:
Not only are Visa gift cards under the exclusion, but even merchant gift cards are being said to be excluded.
@Wildcat_1 Great question! All gift cards are excluded- this includes both of the ones you mentioned. Hope this helps! *Jes
— Discover (@Discover) September 18, 2015
This is terrible news because it will be much more difficult to take advantage of this offer as it limits us to physical goods.
Will it be enforced?
The $2000-question is whether the gift card exclusion will actually be enforced.
How would they even know what you bought to be able to start excluding the gift cards? Well, there is a concept of Level 3 Processing which tells the card issuer the exact items that were purchases, see Does A Credit Card Issuer Know What Items You’re Purchasing? We noticed, for example, that Amex knows exactly what items you purchase from Staples and it even shows up clearly in your online login.
Remember that we don’t know if Discover has Level 3 Processing at all. Even if they do, it’s unlikely that they have it with all merchants. If they don’t have the exact data on what was purchased, there’s no way the system can withhold the 10% cashback from being credited.
For what it’s worth, I chatted with Discover about this; here’s an exact quote of the conversations:
Me: I am reconciling my spend now and I’m trying to figure out what items were purchased on my Discover card a while back. Does Discover have access to that info? Or do you just see the amount without data on what was purchased?
Discover Rep: Thank you for contacting me about purchase information on your Discover account. I can confirm that we do not have information on what exactly was purchased. We only have the name of the merchant, amount of purchase, and date.
Me: So there would be no way for you to verify exactly what was purchased? I’ve heard of Level 3 Processing that some card issuers do which gives exact data. Does Discover use Level 3 Processing?
Discover Rep: We do not have information like that for your purchases. I would recommend contacting the merchant directly.
To be clear, I don’t trust every Discover rep to know exactly what info is transmitted and what isn’t, but in the case of Amex the info is clearly visible and isn’t a secret so hopefully if the Discover reps can’t see it their system can’t either.
Here’s a look at how a gift card purchase at a gas station shows up in my Discover account:
It’s also worth noting that – via Flyetalk – the original terms did not mention the gift card exclusion, this was added afterward. That makes me more optimistic that the added exclusion is just meant as a deterrent and won’t actually be enforced in any way.
What to do now?
Within a couple of weeks, we should know more on whether it’s being enforced or not. Discover’s cashback doesn’t always post for the last week-or-so of the month until the following statement so we may have to wait some time to find out more.
The one thing that worries me is that even if it’s not system-enforced, which is my guess, they could start manually reviewing accounts. It’s never good to have manually reviewed accounts and it could be a red flag to have huge amounts of spend on the account.
Ultimately, it’s important to remember that the deal is a great one even for ordinary purchases, but since Apple Pay has limited acceptance it is hard for many of us to take advantage of it that way. Those who do merchandise reselling may be able to make $10,000 in purchases of resalable physical goods and make use of the offer that way.
One other interesting question remains with in-app purchases with Apple Pay. Officially only in-store purchases are included in the promo, not in-app purchases, but there is a chance it will work. If it does, that would open up a new front of possibilities of how to make use of this promo for ordinary purchases. For example, you would be able to pay your rent with Radpad using Apple Pay and get 22% back! Once again, in-app purchases are officially excluded in the terms and probably won’t work, but with gift cards becoming a gray area it’s worth checking out our options.
