Your credit card might cover that broken holiday gift
By Brittany Watman, LendEDU
We all look forward to the holiday tradition of giving and receiving gifts from the people we love. After all, there are few things more satisfying than picking out the perfect gift for a loved one and watching their face light up when they open it Christmas morning.
But what happens when that gift breaks?
Most of us have had this happen – whether around the holidays or at other times of the year. We buy something only to have it stop working soon after.
Sometimes, it’s within the store’s designated return period and we can take it back and get a replacement. Other times, it might be under warranty from the manufacturer. But what happens when the products and gifts can’t be returned and aren’t under warranty? Most of us simply sadly accept that there is nothing we can do.
Not so fast! If you paid for that gift with a credit card – you might still be able to get your money back.
The credit card perk you don’t know about
Very few people are aware of all the perks that their credit cards offer. One of the most common and least well understood credit card perks is something called purchase security.
Basically, it covers you if you buy something with your credit card and it breaks within a set period of time. Your credit card will then either replace it, repair it or reimburse you for the full cost. Not only that, but if your item is stolen – it’s also covered!
What it provides
Not sure if your card offers purchase security? Be sure to read the fine print in your credit card agreement. Every card that provides it offers slightly different variations of the coverage – so it’s critical that you check your card to see what it offers.
In general, most will cover the item for up to 90 days – which is longer than most return policies which are usually 14-30 days. Credit cards will generally offer anywhere from $500-$1000 in reimbursement per item. They also often have annual caps on the total amount of reimbursements you can receive. For example, the Chase Freedom unlimited offers $50,000 in lifetime protection – making it unlikely that you will max it out.
Each policy also tends to exclude certain types of items or purchases, so it’s important to read all the fine print in your cardholder’s agreement. For example, some policies exclude animals or antiques from their covered items. Many also specify the types of losses that they will cover. Minor wear and tear could be excluded by one company whereas another company might include it.
Extended warranty perks
So, what happens if your item breaks just after the 90 days are over? Well, you’re not out of luck completely. Many cards also offer extended warranties to their cardholders when they purchase things using their cards. That means that after your original manufacturer’s warranty expires, your credit card will extend your warranty for up to one year.
While this is a great perk, once again, very few people know about it. Some credit cards actually include wear and tear in their warranties, which means that you’re more likely to be able to take advantage of it. These warranties tend to cover even more than purchase security covers with some companies, such as Barclays providing up to $10,000 in protection, and other providing up to $50,000 per year.
How to make a claim
Just like you would with any other kind of insurance claim, you will have to document your purchase and the defects with your item whether you’re taking advantage of the purchase security or the extended warranty. You’ll likely need an itemized receipt showing when you purchased the item or your credit card statement. If the item was stolen, you might need a copy of the police report.
If you’re unsure how to submit a claim, the information will often be in your cardholder’s agreement. If it isn’t or you don’t know where your agreement is, then you can call up your credit card issuer and ask them how to submit a claim or go to their website.
Put your purchases on your card this season!
Now that you know about this perk, be sure to put your purchases on your credit card this holiday season if it offers these great protections. That way, if something breaks, you can be sure to get your money back. That will help you feel confident about your purchases and make you feel even better when you see your loved one open that perfect gift this season.
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