A recent email from a reader reminded me that you may not be familiar with how American Express treats refunds when you have a spend target to hit.
With flight refunds still being triggered on a regular basis it is important to know where you stand.
The answer is simple: all American Express spend targets are based on NET spend, not GROSS spend. Your spending is adjusted for refunds, irrespective of when the original transaction took place.
The “irrespective of when the original transaction took place” bit is important. Here is an example.
My British Airways American Express Premium Plus membership year runs to late February. I need to spend £10,000 between late February 2021 and late February 2022 to receive my next 2-4-1 Avios companion voucher.
Let’s assume that I am about to receive a £2,000 refund from British Airways for a flight booked last December. Because it was booked last year, it counted towards my 2020/21 companion voucher.
When this refund turns up, it counts against my target spend for the current year. This means that I will need to spend £12,000 this year – not £10,000 – in order to trigger my 2-4-1 voucher.
It makes no difference that the original purchase took place in my old membership year. Amex deducts the £2,000 from my gross spending in this membership year so, to hit £10,000 of net spend, I now need to hit £12,000 of gross spend.
More obviously, the refund would also count against my £10,000 total spending if the original purchase has taken place in my current membership year.
The identical situation applies if you are working towards any other American Express spend bonuses:
- Any sign-up bonus on any American Express card
- 10,000 Membership Rewards points for spending £15,000 in a year on American Express Preferred Rewards Gold
- Marriott Bonvoy Gold Elite status for spending £15,000 in a year on the Marriott Bonvoy American Express
- A 25,000 point free night voucher for spending £25,000 in a year on the Marriott Bonvoy American Express
Does this apply to other card issuers too?
I don’t know, unfortunately. It will vary on a case by case basis, but you should assume any award is based on net spend and not gross spend.
This would include:
- A free night for spending £10,000 in a year on the IHG Rewards Club Premium Mastercard (no longer available to new applicants)
- 40,000 HSBC points for spending £12,000 in your first year of holding the HSBC Premier World Elite Mastercard
- An upgrade or 2-4-1 voucher for spending £20,000 in a year on the Virgin Atlantic Reward Mastercard
- An upgrade or 2-4-1 voucher for spending £10,000 in a year on the Virgin Atlantic Reward+ Mastercard
Want to earn more points from credit cards? – January 2022 update
If you are looking to apply for a new credit or charge card, here are our January 2022 recommendations based on the current sign-up bonus.
You can see our full directory of all UK cards which earn airline or hotel points here. Here are the top current deals.
There are special sign-up bonuses on both of the BA American Express cards until 28th February 2022. The bonus on the free card is doubled to 10,000 Avios and the bonus on the Premium Plus card is increased from 25,000 Avios to a huge 40,000 Avios.
British Airways American Express
10,000 Avios for signing up (SPECIAL OFFER) and an Economy 2-4-1 voucher for spending ….. Read our full review
British Airways American Express Premium Plus
40,000 Avios (SPECIAL OFFER) and the UK’s most valuable card perk – the 2-4-1 voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review
The Platinum Card from American Express
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these offers.
The bonus on the Capital On Tap card is increased from points worth 10,000 Avios to 30,000 Avios until 4th February 2022.
The bonus on the British Airways Accelerating Business card is increased from 30,000 Avios to 45,000 Avios until 28th February 2022.
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
45,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
Capital On Tap Business Rewards Visa
30,000 points bonus – the most generous Avios Visa for a limited company Read our full review
For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.
Apply 31st March 2022 and your cashback will be increased to 2% for the first three months.