Let's hope this never happens— you buy something online, such as a new laptop computer, and someone steals it, or you drop it the first day, and it cracks. If you used a credit card to make your purchase, you might wonder if you can get a refund or replacement. Does your credit card company share in the responsibility when a newly purchased item is stolen or accidentally damaged?
You may not think to ask for help paying for loss or accidental damage that happened after an item is delivered to you. However, if your credit card account includes something called a "purchase protection program," you may be entitled to a refund or replacement. It pays to check your card benefits to see if you are covered.
What is credit card purchase protection?
Purchase protection programs are one of those benefits that credit card companies advertise to set them apart from the competition. They generally cover new items damaged, defective or stolen within 60 to 120 days of purchase, with some limitations. Don't expect it to cover your entire cost of an expensive item; most coverage is limited to $1,000 per incident.
For instance, American Express offers perhaps the most well-known and the most comprehensive credit card purchase protection program among all major American credit card issuers. On eligible purchases made with your eligible American Express card, if you accidentally damage an item or if it is stolen within 90 days of your original purchase, the company may cover the cost of repair or replacement. You can use this benefit for claims up to $1,000 per occurrence with select cards, provided your theft isn't also covered by another form of insurance such as auto or home insurance. Some American Express credit cards, including The Platinum Card® from American Express and American Express® Gold Card , offer claim purchase protection for up to $10,000 in goods per incident. For most American Express cards, you are limited to total claims of up to $50,000 per year.
Visa Signature cardholders now enjoy a similar credit card protection program, called Purchase Security. The terms of your coverage, including maximum reimbursement per incident and number of incidents per year, are determined by the agreement with your bank. Visa also extends this feature to a number of its prepaid debit cards, including TravelMoney, Payroll, and some reloadable cards. Visa Signature cards also offer coverage such as hotel theft protection, cell phone coverage, and lost luggage coverage.
Under MasterCard's Purchase Assurance program, issuing banks can choose whether they want to extend a similar purchase protection benefit based on card category or customer status. The issuing banks offer coverage and determine limits and rules for each type of card they offer.
Learn more about credit card purchase protection.
What should I do if my purchase has been damaged or stolen?
Here's how to file a purchase protection claim if an item you purchased using a credit card has been accidentally damaged or stolen:
- Notify the merchant or vendor from whom you purchased the item. They may refund your money, send a replacement or repair the item.
- Check into all other coverage options, such as homeowner's insurance or car insurance. For example, if you home was broken into, your homeowner's insurance may cover the loss. Purchase protection only covers your loss after you've exhausted other insurance options.
- See if your agreement includes a credit card buyer protection program and whether your loss is covered. You can read your printed credit card agreement or go to your credit card company website. You can also call the customer service number on the back of your card and be directed to the claim department if applicable. Make sure your type of loss is covered; for example, your loss may not be covered if you left the item in public sight or you merely lost it and you have no evidence it was stolen.
- File your claim within the time limits. If your loss is covered by a purchase protection program, the bank will require order numbers, a police report (if it was stolen), and other information to process your claim. As with any credit card benefits, your bank may reserve the right to honor or reject your claim depending on the circumstances.
How can purchase protection plans protect me in the future?
Credit card companies offer so many benefits, it's easy to forget most of them as soon as you've signed up for a card. Some of the perks, like purchase protection plans, can be valuable, however. Check out the perks for all your credit cards and make note of which ones carry purchase protection plans. If none do, you might consider shopping for a card with a plan you like. Next time you make an important purchase, remember to use that card to pay for it.
For cameras, computers, and other electronic goods most likely to get stolen or damaged, you can speed up the process by keeping a list of serial numbers and accompanying receipt numbers in a secure place so you can make your claim and purchase a replacement in a timely manner.
If you're shopping for a new credit card, purchase protection plans are just one perk you should be aware of before you settle on a card. Cards with more perks are generally offered to customers with good or excellent credit scores, and they are more likely to carry an annual fee. Use our credit card comparison tool to look at all the benefits a card has to offer, including purchase protection plans. Be sure to balance card benefits with any annual fees and other expenses before you make a decision.
What other types of purchase coverage do credit card companies offer?
Theft and damage are not the only things that can go wrong when you make a purchase. Your credit card company may offer one or more of these other forms of protection:
- Price protection. You don't really lose money when the price goes down right after you buy something, but it may feel like it. If that happens, first ask the merchant if they have a price protection policy. Some stores, especially department stores, refund the difference if the price drops within a certain time frame. If not, check to see if your credit card agreement offers this coverage.
- Extended warranty. Electronics and other goods seem to quit working right after the manufacturer's or vendor's warranty expires. If this happens, take a look at your credit card company coverage. Some credit card companies double or otherwise extend the warranty, which can mean you get a replacement or refund while the credit card warranty extension is in effect.
- Return protection. Most vendors and merchants allow you to return items within a short period of time. If you want to return something after that time period ends, return protection coverage may make that possible.
- Cell phone insurance. Credit card coverage for cell phone loss or damage is becoming popular. You could be reimbursed if something happens to your phone. If this coverage is included with your credit card, make sure you're not paying for duplicate coverage through your cell phone carrier.