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When most people compare credit cards, they look at the card's sign-up bonus, how many rewards it earns on purchases and what other perks it offers.
While these benefits are valuable, when using your credit card for everyday purchases, another set of benefits may prove even more critical: return and purchase protection.
Return and purchase protection cover you if something goes wrong with a purchase. These coverages can save you a lot of money, heartache and stress.
How do these protections work and how do you take advantage of them? Let's take a look.
Evaluating travel card perks
The best travel cards include perks to attract and retain customers. These features are designed to make a card stand out from the competition while meeting customers' needs. Some of the most common credit card perks include:
A welcome bonus for new customers.
The ability to earn rewards on purchases.
0% intro APR offer on purchases, balance transfers, or both.
Travel credits, like the $300 credit on the Chase Sapphire Reserve®.
Some credit cards even offer automatic elite or accelerated status based on spending.
Other credit card perks don't make headlines, but they can be even more valuable. These overlooked perks include purchase protection, return protection and an extended warranty. In some cases, cardholders don't realize these benefits exist or how to use them.
» Learn more: The best travel credit card welcome bonuses right now
What are return and purchase protections?
Here's how each of these oft-overlooked valuable coverages works.
Return protection coverage
The National Retail Federation says that consumers returned an estimated $761 billion in merchandise in 2021, more than 16% of total U.S. retail sales. With such returns, many retailers are cracking down on what returns they're willing to accept.
Return protection covers you for eligible expenses when you try to return a product but the retailer won't accept it. Return protection coverage provides an extended return window and reimburses you (up to claim limits) for the purchase price when the retailer won't take the return.
For example, The Platinum Card® from American Express offers return protections for its cardholders. With return protection, you may return eligible purchases to American Express if the seller won't take them back up to 90 days from the date of purchase. American Express may refund the full purchase price excluding shipping and handling, up to $300 per item, up to a maximum of $1,000 per calendar year per card account, if you purchased it entirely with your eligible American Express® Card. Purchases must be made in the U.S. or its territories. Terms apply.
» Learn more: Credit card return protection: Where you're covered
Purchase protection coverage
Research by the FBI shows that there were over five million thefts nationwide in 2019. If your purchases are stolen or damaged, purchase protection covers the cost of replacing your items. Sometimes, these credit card protections also cover your items if they are lost. When you submit a claim, you'll be reimbursed for the cost of the item (up to claim limits) so that you can replace it.
For example, Chase Sapphire Reserve® cardholders have purchase protection. In this case, should your item be stolen or damaged within 120 days of purchase, you can file a claim. You can file up to $10,000 per claim and $50,000 per year.
How to file a claim
These credit card benefits are generally run by a third-party company with which the card issuer contracts. The exact process varies by company, but it will look something like this:
First, attempt to return the item to the store where you purchased it.
If they don't accept your return, file a claim through your credit card.
Submit supporting documentation.
Respond to any additional requests promptly.
The supporting documentation generally includes:
A copy of the receipt.
The credit card statement showing the purchase.
A brief letter explaining the situation.
You may need to provide a copy of the police report for stolen items.
Do not throw away broken items. You may need to submit them as part of your claim.
Read the fine print: Not all coverage is the same
When comparing credit cards with return and purchase protection, read the fine print. While many credit cards offer these benefits, the terms of these coverages vary widely. Here are a few essential terms to focus on.
Exclusions. Not all purchases are covered. And excluded items may vary depending on which credit card you use. Examples of excluded items include consumable or perishable items, used goods, tickets and software.
Per item coverage limits. The maximum allowed per claim varies per card, so check your limits before purchasing. Many cards offer coverage of $250 to $500 per claim for return protection and up to $10,000 for purchase protection.
Annual coverage limits. In addition to per-claim limits, these benefits also have maximum annual claim limits. For example, for returns, you may get up to $1,000 per year for return protection, while purchase protection limits are generally up to $50,000 per year.
Coverage time frame. Coverage duration lengths vary, but it generally starts when you purchase the item. For example, return protection may be up to 90 days, while purchase protection may last up to 120 days.
The bottom line
Credit cards offer numerous benefits beyond the rewards earned on your purchases. Sometimes, these overlooked benefits are even more valuable when they cover your everyday purchases. However, coverage terms, limits and exclusions vary by card, so review your benefits before purchasing. And, if your current credit card doesn't offer return and purchase protection, it might be time to replace it with a better one.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card