(Hat Tip to Alex in the comments)
Good afternoon everyone, you can file this post into the category called “things I don’t think are good news.” Let me explain… When merchants process your credit card, a certain amount of data is sent to your credit card company. The amount of data is divided into 3 levels, with level 1 sending the least amount of data and level 3 sending the most data. When you buy an airline ticket, the airline reports your purchase as level 3, since you can see the details of your itinerary on your credit card statement. Since level 3 data is costly to the merchant processing your credit card payment, most merchants only send level 1 data. Fast forward to a few days ago…
It looks like Staples.com (maybe Staples too) is sending level 3 data to American Express (possibly other credit card companies as well). How do I know Staples.com is sending level 3 data to American Express? Looking at my last 2 purchases at Staples.com, I can click on the details of the transaction and see “VISA 200 GIFT CARD” as the note. That is exactly what I bought using that American Express credit card. If you look at the second image, you can see “SOUTHWESTGIFTCARD 100 EMAIL DELIVER” as the note on a different American Express credit card. I looked at a few other purchases made on other American Express credit cards and it looks like only level 1 data from CVS and Safeway.
If you want to learn more about credit card processing details, check out this Doctor of Credit post or this Wikipedia section. According to Wikipedia, the credit card companies might switch to 6 levels of data over the next year or two. The additional levels of data are focuses on determine PIN-based transactions vs. debit card payments processed as credit cards. It sounds complicated to me. If you have any questions, please leave a comment below. Have a great *3 day* weekend everyone!
As far as I know…This has been going for a long time. I last noticed this around June of 2014.
I see. Have you noticed which merchants tend to use level 3 data?
i think this may be overblown. the AOR community is a small sliver of the AMEX cardholders. Staples probably gives AMEX a big kickback for each purchase that receives a sync offer.
You are probabky right. Have you noticed other AMEX Offers getting the same level 3 treatment?
i just found out that half my Visa GC orders were canceled by Staples, not AMEX. I guess Staples got the gist of the manufactured spending community and flagged my subsequent purchases.
I purchased 2 VGCs on Jan 15 and another 2 VGCs on Jan 16. All my orders arrived fine. How many did you try to purchase?
Grant – what’s the significance of this news to you? Thanks. p.s. How’s the new job treating you?
If other credit card companies start doing something similar (think Chase Ink tracking Visa GCs or Old Blue Cash tracking PPMCCs), it coukd be bad news for MS.
My initial feeling is that this would be bad when the fine print for an offer excludes gift cards. :(
I’m hoping Target doesn’t send level 3 data to my credit cards (for Redbird loads)!
I hope that doesn’t happen.
It would suck big time if that happens…Redbird has been a nice companion the last few months and I would hate to lose the benefits that come along with it.
Yes definitely. I feel the same way.
Agreed. This is a serious potential threat to our Redbird activity. I have a $10K spend on Amex Platinum so I better hurry!
I hope you get your minimum spend in before things start cracking down.
Wow this could really be the end game for msing. :(
We shall see how it goes from here.
Brick & mortar Staples is also reporting level 3 to AMEX. Bought some Subway gift cards last week and it got reported as:
Additional Information:
$25 SUBWAY
Reference: XXXXXXXXXXXX399656
Category: Business Services – Office Supplies
Very interesting. It woukd be interesting if we coukd test Office Depot (store and online) along with Office Max (store and online). Might be tricky with the OD and OM merger though.
Office Max also reported “PRE-PAID CREDIT” back in November when I purchased Gift Card during a promotion and also used Amex Sync offer. But since then I haven’t used Amex at Office Depot. I had used Capital one recently but that didn’t have any Level 3 description.
Thanks for the data point. Seems like level 3 data is only reported on AMEX Offers.
I don’t think we have anything to worry about. For a long time (and it’s still this way now), it’s been possible to buy Amex gift cards online. It’s also been possible to load a Visa Buxx online (still possible), load a Serve card online using a credit card, buy Visa gift cards from Giftcardmall.com, and buy free Chase gift cards. In all those cases, the bank explicitly knows what those purchases are, and they award points for it anyway. Of course, there’s the exception of Citibank labeling such purchases as cash advances.
Who decides the level of data, the merchant or the credit card issuer? Let’s hope the merchant is able to decide. If any stores upgrade to level 3 data, then I wonder if you can ask the store manager to go back to level 1. However, it seems like you might have to ask someone higher up than a store manager.
I think the level is decided by corporate, not by individual stores.
Let’s say hypothetically, a store switches to level 3 and causes a manufactured spending apocalypse (fortunately, unlikely to happen). Would there any way to contact the people from corporate, or to tell a store manager to contact someone from corporate? I wish avid frequent flyers had corporate jobs at these stores, so that they could choose to keep reporting at level 1.
I wish there was something we could do, but that seems unrealistic.
Maybe they could code everything as “office supply”, “gas station” or “grocery” :)
I meant, “would there be any way”, not “would there any way”. Sorry for the typo.
i was going to buy gift cards using the promo from amex but on the amex website it says that gift cards are excluded did anyone buy a giftcard and get the $25 rebate?
Yes, I received the $25 statement credit after buying a Visa GC and a SWA eGC. I wouldn’t worry.
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