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Expecting a refund to your American Express card? Here’s how it impacts your voucher or bonus

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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.

How does American Express handle refunds

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
How does American Express handle refunds

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)

Want to earn more points from credit cards? – October 2021 update

If you are looking to apply for a new credit or charge card, here are our October 2021 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.

The following offers will end soon:

  • 10,000 Avios on British Airways American Express (ends 2nd November)
  • 40,000 Avios on British Airways American Express Premium Plus (ends 2nd November)
  • 60,000 points on The Platinum Card from American Express (ends 2nd November)
  • 30,000 points on American Express Preferred Rewards Gold (ends 9th November)

Here are the top current deals:

British Airways BA Amex American Express card

British Airways American Express

10,000 Avios for signing up, no annual fee and an Economy 241 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

40,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

60,000 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.

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Amex Platinum Business American Express

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 card

British Airways Accelerating Business American Express

60,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard 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:

Barclaycard Select Cashback Credit Card

1% cashback and no annual fee Read our full review

Comments (65)

  • Stu says:

    Under the current Amex offer of 10K Avios for a £5K spend by 30Nov, there’s an exclusion on ‘payment facilitators which it defines as ‘an intermediary that accepts payments on behalf of the seller of the goods/services.’ I’m assuming this’ll include PayPal but what about, for example, ApplePay transactions?

    • BJ says:

      Peter reported difficulties triggering the bonus despite spending over £5000; perhaps he can comment on whether he used apple pay etc.

      • Stu says:

        I don’t think I’ll have any issues in triggering this, I’m at about £3.5K already with three holidays still to pay the hotels for. I just googled payment facilitator and the definition specifically includes PayPal, whereas ApplePay is apparently classed as a payment processor. Fingers crossed …

        • BJ says:

          I don’t think Peter really had an issue triggering it either, rather an issue with amex posting it.

          • Stu says:

            I had to wait eons for the 10K Rimowa bonus – they said 5 days (up to 90 days as with all offers), in reality it was about 6 weeks

          • Peter K says:

            I think I might be the Peter you’re on about. I did not use apple/google pay, but I did use PayPal and indeed billhop for part of the £5k spend.

    • Andrew says:

      The offer of and extra Avios per £1 earlier in the year worked fine with PayPal, despite similar wording. I think that’s standard wording for all Amex offers.

      • C says:

        And hopefully the likes of SumUp and iZettle are not excluded. Lots of smaller merchants who take Amex do so through these.

    • Andrew says:

      I’ve never had a problem with offers posting when using PayPal in the past year (sorry don’t remember which offers exactly – I think it may have included the Dell free credit which I managed to stack with the 10% off Dell and some rebate from PayPal) even when “payment facilitators” were explicitly excluded.

  • BJ says:

    Are there any datapoints already on cancelling BAPP after triggering the new 2-4-1 vouchers? Do we still get to keep the voucher despite amex long-standing assertions to the contrary or have they clawed any back?

  • Mattb says:

    We got caught out by a refund where the original purchase was on the standard BA card but then was refunded to BAPP after being upgraded. Ba clawed back the avios at a higher rate than we originally received!!

    • Stu says:

      I bet if you raised that with them, they’d adjust it. I had an issue where I was unfairly deducted more Avios than expected and they adjusted in seconds over the phone. Just tell the automated agent thing ‘Avios’ then option 1.

      • BJ says:

        I cannot recall any comments suggesting amex ever adjusted that but happy to be corrected.

        • RobH says:

          I can confirm, if you contact AMEX (I did the online chat) they are able to sort it and refund the points that were taken at the higher rate.

        • Dave says:

          Had a few refunds that where deducted at the higher rate for spend on the standard card. This included BA flights that earned 1 avios per £ but deducted at 3 avios per £. All corrected after contacting Amex.

      • BJ says:

        Seems I’ve been corrected, good to know amex fixes this.

    • BJ says:

      Correct, in this case they claw back at the 1.5 BAPP earning rate.

  • Swiss Jim says:

    What happens is you trigger BAPP 241 in a membership year, it is issued, and then a refund takes you back under the £10,000 limit? I assume the 241 voucher is NOT clawed back? If so, how quickly after you hit the £10,000 target is the 241 voucher issued?

    • Andrew says:

      The voucher is issued immediately in my experience. You get an email and it’s there. I don’t think the voucher is clawed back with subsequent refunds though.

    • Gary says:

      Voucher not clawed back, so good time to trigger refunds is after hitting the voucher target but before new membership year starts. Avios will be clawed back either way.

  • Swiss Jim says:

    Separately, if someone wouldn’t mind reminding me. If you downgrade BAPP to Basic card, do you keep same card number? I seem to recall that you do. Just thinking that might mitigate the concern some have (despite the many reassurances to the contrary) that ditching BAPP means you lose 241 vouchers.

    • BJ says:

      You keep same card number but security code and expiration date will change. Be aware that somebody posted a comment last week that amex would no longer allow them to downgrade from BAPP to Blue, they had to cancel it or keep it.

      • Andrew says:

        Amex told me otherwise last week – that I can simply call them and they can downgrade me to blue or ‘classic’ as they are calling it now.

        • BJ says:

          Thanks, my partner will be in this situation on triggering the 5k/19k having triggered his 241 2 September.

  • Cheshire Pete says:

    I had a credit from an iPhones buy back from Apple credited to my Amex, and at the time I never thought of the consequences! I should have got them to credit me via my Debit card. So the phone was never purchased with Amex at any point, but they deducted Avios from the transaction. I called to tell them what happened and they refunded the Avios immediately.

  • patrick C says:

    What happens if you cancel a card with a negative MR points balance ?

  • Jenny says:

    What happens if a card is used fraudulently and you get a refund?

    • BJ says:

      The charge and refund cancel each other out so nothing happens as such, net spend as the article explains.

      • Andrew says:

        A credit for a fraud transaction posts similar to a credit for an offer – with a 0 points next to it, so no Avios are taken off your balance, ie you keep the points for the original fraud transaction. Not sure if that adjusts your total spend target though.

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