Price Protection

What Is Price Protection?

Price protection is a little-known but common feature offered by most credit card companies that allow cardholders to receive a refund if an item bought with that credit card drops in price within a specified period. This period is usually within 30 or 60 days though some cards allow claims to be filed within 90 days.

Key Takeaways

  • Price protection programs vary depending on the credit card company.
    Some price protection programs only grant you a specific amount of money for a refund. 
  • Depending on the company, some internet purchases might be excluded from price protection.
  • Credit card companies might only allow refunds for specific cards they provide or for particular types of large purchases.

How Price Protection Works

To receive a refund, you must file a claim with the credit card company whose card you used to buy the item. You must also prove the new, lower price. For example, you can verify the original price by providing a printed advertisement showing the same item and the lower price.

Each credit card company will have slightly different program stipulations. For example, there may be a refund limit per item. Some companies will limit refunds per year (such as $250 per item and $1,000 per year).

Not all credit card companies offer a price protection program.

Some credit cards exclude internet purchases from their price protection offers. Furthermore, the lower price that is being used for comparison often cannot be from an internet auction, where pricing might start low but change drastically before the buyer has a reasonable chance to purchase the item.

Varying Price Protection Programs

There might be special allowances instituted on specific types of lower prices that other companies might not honor. For example, a credit card company might not offer price protection refunds if the item is found at a discounted price at closeout, liquidation, or going-out-of-business sales. Or, the amount could be much smaller than usual with maximums of $50 per claim, and up to $150 per year, compared with other refunds.

Price protection is not always an automatic service, even from creditors who offer it. It may be necessary for the cardholder to register items that would be under the service to let the company monitor for price changes that would warrant a refund. In such instances, the credit card company would search the internet for possible lower prices and then issue refunds where warranted.

Conversely, the credit card company might highlight big-ticket items that would be potentially good candidates for the price protection program. From the credit card company’s perspective, this service may encourage consumers to use their cards more regularly, as there is an increased potential to get a refund through the company as they make more purchases.

Not all credit card companies offer price protection, and those that do might only allow it for specific cards they provide or for particular types of purchases.