American Express has long had an unintended perk (or, loophole) with their airline incidental reimbursements. It has made getting value from that reimbursement much easier and more valuable – but that time has come to an end.
American Express Cuts a Perk That Never Was an Official Perk
What is the American Express Airline Incidental Reimbursement?
With cards like the American Express Platinum, American Express Business Platinum, Hilton Aspire and American Express Gold Card, there is a card benefit that lets you select an airline of choice (from a list) and then use up to the maximum allotment of the amount for airline incidentals with that airline throughout the year – for example, the Platinum cards offer $200 per year and the Gold card is $100 (Hilton Aspire is $250).
Here are some things that count as airline incidentals:
- Bag check fees
- Advanced seat assignments
- Ticket change fee
- In-flight purchases
- Pet fees
- Lounge fees/memberships
It all is dependent on how the airline charges the purchase. If it shows up as a ticket purchase/airline reservation, Amex does not automatically issue the credit for it.
In the terms, American Express explicitly said that gift cards (among other things like ticket purchases) were not covered with these incidental fees for reimbursement. However, for the last many years, various airlines charged gift cards in a way that made them show up as incidentals. That allowed travelers to easily get the reimbursement amount.
Airline Incidental Reimbursements for Airline Gift Cards Now Dead
However, according to Doctor of Credit and others, that door has now been closed. It has been open and shut with various airlines the last few months but it appears that the coding has now been adjusted so that Amex knows what are gift cards and what purchases are not.
This means you should no longer figure the airline reimbursement fee at as high of a value when considering paying your annual fee. For example, even buying gift cards, you could never look at it as getting a straight $200 back (if you spent your $200 reimbursement on gift cards).
While gift cards maintain the flexibility that gives them value, you also don’t get points when booking airfare with gift cards. In addition, you are locked into a specific airline for the entire year. That means that I would have valued them around 80% of value.
American Express Just Really Decreased the Value on the Reimbursement Fees
With gift cards no longer working, it makes the airline choice much harder. For example, if you are an elite member with United Airlines, you likely never pay bag fees, you get to pick your seats in advance, you may get award fees waived, and you may even have your lounge situation already taken care of just through your credit card. So, why would you select United Airlines as your airline of choice for a year of incidental fees?
Presumably, if you are a United elite, you fly most of your flights with them so switching to a different airline wouldn’t make much sense for that fee reimbursement either. Oh, and why would you choose Southwest which doesn’t have seat assignments (though you could purchase Early Bird check-in), change fees, bag check fees (on up to 2 bags per person) or even for WiFi since you could get the new Business card for Southwest and get WiFi free all year!
So, why is this such a disappointment when it was never an official perk to begin with? I think for most of us it is the fact that this reimbursement fee is so difficult to use in contrast to the $300 travel credit we get with the Chase Sapphire Reserve, for example. With that card, we just use the card for travel like normal and the reimbursement is automatic on all travel – so simple and truly helpful.
American Express is trying to cut things out that cost them money but they should be trying to target ways to give their customers increased value instead of closing loopholes like this. This move by Amex is going to result in many customers closing their card accounts that have reimbursement fees since that was one big way people were able to justify the annual fees.
Bad move, Amex…