Chase axes perk from its Sapphire Reserve card—why your issuer could do the same

Issuers are quietly scaling back some of their perks after the fanfare surrounding their cards’ release
Price protection can help consumers save big, especially on pricey items.
Price protection can help consumers save big, especially on pricey items.
Chase’s Sapphire Reserve card just got a little less generous.

Chase JPM+1.94% is no longer offering price protection as a perk on its Sapphire Reserve card, the company announced earlier this month. That perk — which allows cardholders to be reimbursed for purchases they make, if the item can be found for cheaper at a different retailer — will no longer be offered, starting Aug. 26, 2018.

At least a few consumers expressed their dissatisfaction with that on Twitter.

At least a few consumers expressed their dissatisfaction with that on Twitter.

 

Chase’s response: “We’re always evaluating our products to provide the most rewarding and useful benefits to our customers,” the company’s support staff wrote on Twitter. (Chase did not immediately return MarketWatch’s request for comment.)

Chase isn’t the first issuer to roll back perks after offering them initially. Earlier this year, Discover DFS+1.63% discontinued five benefits for all of its cards, including extended product warranty, return guarantee, purchase protection, auto rental insurance and flight accident insurance. (Discover did not immediately return MarketWatch’s request for comment.)

Why companies are rolling back some benefits
Card companies in recent years have been catering their cards more toward travel, Karimzad said. That may be one reason lesser-known perks like price protection are going away, while travel-specific benefits like large sign-up bonuses or hotel points rise in popularity.

Another perk that’s catching on: Cell phone protection. Companies, including Wells Fargo WFC+2.25% and Chase on its Ink Business card, offer this service as long as customers pay their phone bills using their card. If they do, the card issuer offers to replace or fix the cell phone if it becomes damaged.

Those types of perks tend to attract a wealthier clientele, who will use the cards more frequently and stay loyal to the brand, said Brian Karimzad, vice president of research at CompareCards.com

Credit card companies have gotten increasingly competitive, said Matt Schulz, a senior industry analyst at the credit-card website CreditCards.com. If one company isn’t willing to offer a popular perk, maybe another one will. “If one particular feature is really driving a lot of customer satisfaction, it’s not going to go away,” he said.

“Card issuers are always kind of tinkering with their terms and conditions,” Schulz said. “As useful as these perks can be, I don’t know that they move the meter a whole lot when it comes to convincing folks to get one card over another. If they did, they wouldn’t be going away.”

Nearly half of cardholders are unfamiliar with their perks
Many cardholders don’t even know which perks and protections their cards offer, according to a survey from the credit-card website CompareCards.com. Nearly half (47%) of cardholders fail to take advantage of valuable benefits that come with their cards, the site found in a survey of 1,050 cardholders in March 2018.

And some perks change frequently, even including the interest rate on cards, or the value of airline points and hotel points. They often aren’t dictated by the card issuers, but by the companies they partner with. (The website The Points Guy tracks the value of points each month.)

Credit-card issuers are required by the Credit CARD Act of 2009 to let cardholders know with 45 days’ advance notice of any changes they will make to the cards. But it’s understandable that some more knowledgeable customers would become upset when those perks go away, said Brian Karimzad, vice president of research at CompareCards.com.

“If you’re not satisfied, it’s a good time to shop around for a card that didn’t make a change to those benefits,” he said.

Beyond that, however, customers have little recourse, he added.


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