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Email this1:36 pm
August 9, 2014
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Is finally on the news
1:50 pm
October 21, 2013
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Thanks, Jon.
One of the comments which someone has added to this news item is to wonder what will happen with accumulated cashback credits at Amex, which apparently are normally credited early in the year. So, whatever you do, don't cancel your card prematurely! They will have to figure something out, I would think.
8:46 pm
August 5, 2014
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Loonie, what does shoppers Drug Mart with their optimum points program do and Aeroplan with their points program and so many other reward, points programs do?
They increase the amount of points needed to buy the same products or miles, rewards by 20%, 30%, 40% devaluing what rewards you already accumulated.
They can also put time limits or expiring points, miles, other rewards. They can also put other restrictions on what you can use the points, rewards for and when too.
Don't worry Loonie, they have a full bag of tricks up their sleeves. This is their employees job and their business. This is one of the reasons they created such reward programs in the first place, control over the contract. This is why they say the devil is in the details.
Aeroplan a few years back made rewards accumulated for years already there disappear on the death of a deceased person. The rules before stated that a transfer from a deceased spouse to a surviving spouse was allowed. This is not the case anymore. Poof, gone forever!
9:15 pm
October 21, 2013
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Aeroplan also put an expiry date of 7 years on their plan, but they removed it under public pressure. And they weren't the only ones.
I'm not defending their antics, but the best thing is to redeem one's points as soon as possible before they change the rules or end the programme.
They DO call the shots. It's their plan. We just have to be clever in how we use them.
10:07 pm
August 5, 2014
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Loonie, I agree that we have to be smart about using up all the points, miles, rewards as soon as possible so we get the most out of them as we can.
They know that human nature is mostly not that way and many procrastinate leaving them the winners most of the time.
Poor planning or no planning at all is their best profit making scheme. Governments, corporations and many other organizations that profit or receive some type of funding are using the same rules and playbook.
10:47 pm
October 21, 2013
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And this is why they have expiry dates and so on. Otherwise, the points remain on their books as a liability forever. They are hard for them to get rid of from their books if people just forget about them.
12:25 am
August 5, 2014
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I have no idea what would happen for sure if one of these companies declares bankruptcy or some type of insolvency.
Loonie, reward points, miles etc. are just another liability for them and probability most of us who have reward points, miles etc. would get nothing or from a possible company buying them out, pennies on the dollar, maybe 10 cents, 20 cents on the dollar.
This is another form of forced expiring rewards because the contract is now worthless.
12:49 am
October 21, 2013
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However, in truth, this rarely happens.
I know there were some problems with futura.ca . I got my $100 out of that one and never collected again. It's very hard to know how you accumulate the rewards, and they won't let you have anything until you get to $100. I just don't trust them.
They're only points, not part of your net worth. If you can use them, great!
1:06 am
August 5, 2014
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Loonie, we may see it as not our net worth but I can see a day that there are billions of dollars in points, miles etc. and other rewards accumulating but the tax man CRA, IRS etc. are not getting income taxes on them.
It is like any other benefit that we are receiving. If you receive a non cash benefit from your workplace, it is fully taxable just as you earned it from employment income.
My cousin in Belleville works as a landlord and his $900 a month rent that is paid as part of his full employment pay is fully taxable as if he received the income from employment but got no direct paycheck or cash.
1:11 am
August 5, 2014
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Loonie, when it comes to taxes and reward programs, there is more than one way to skin a cat. What a world we live in and a society that we have become.
2:47 am
October 21, 2013
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I regard any return in terms of points etc as returning my previously-taxed money to me, not as income. In this respect, the better reward programmes offer cashback, making it clearer and recognizing that it is a return of your own money. This is the same way that, with non-registered annuities, one does not pay tax on the portion which is a return of one's own money. Same with some other cleverly structured investments such as corporate class funds and so on which have created trading loopholes. If they want to open up rewards to taxation, they will face a hornet's nest of issues, and I can't imagine it will be worth the effort. It would be better, as kanaka has suggested, if they simply charged us less in the first place for products and got rid of all these "incentives". We would unquestionably save more money, if they were honest, because they wouldn't have to administer the programmes or advertise them, which costs a fortune. But they would end up charging us just as much probably, and with no reward. Anything that I can get back, I will take!
Sobey's typically offers something for free if you spend over $50. This coming week, in Ontario, it's a free pineapple. Are you suggesting that people should be taxed on the value of the pineapple? Typically the freebie is worth about $2. or so, so that's really a bulk discount of about 4%, in the form of in-kind compensation. They could equally have advertised, "$2 off when you spend $50", but that would not have been appealing to very many people because it is obviously so small. The pineapple costs them less because it's a wholesale cost, but we are surely paying for it in the higher prices that Sobey's charges overall.
Even if they wanted to try to tax all this stuff, it would be a nightmare.
I was reading somewhere recently that cash-back programmes are much more popular with Canadians than with Americans. Perhaps we're smarter than we thought!
People know, when they get taxable benefits from their employers, surely. You can always say "no" if you don't want it. Why shouldn't they be taxed? If the "benefit" is in terms of points redeemed, well, they're not yours because you never paid for the item in the first place.
Of course your cousin should pay tax on his "free" rent. Everyone else pays their rent on after-tax income. Surely he knew that when he took the job.
When people get things tax-free that they SHOULD be taxed on, we all end up paying a little bit more to compensate.
3:04 am
October 21, 2013
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According to this news item, Costco will accept all Mastercards as of Jan.1/15, as we anticipated.
http://business.financialpost......n-express/
It's hard to imagine why I would want to get another one if I can use the one I already have - unless it's got a heck of a cashback. The Costco credit card will double as a membership card, an idea which I don't like much, as it means I will have my photo on my credit card, I suppose. Too invasive. Who wants to be flashing that all the time?
" The Capital One Platinum MasterCard will serve as both a credit card and a Costco membership card. MasterCard Canada has also entered into an agreement with Costco to open credit card acceptance to all MasterCard cardholders."
They currently offer the Aspire CashTM Platinum MasterCard®, which is no-fee and gives 1% cashback. I don't see that Capital One offers any better deals than this, but it is not exemplary, so they will have to do better if they want Costco members to switch over to them from other Mastercards. They will have to compete with MBNA's cards, where you should be able to get 2%.
9:22 am
October 27, 2013
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I won't be switching from my existing no fee Capital One Aspire Cash World card..... a card no longer offered by MC. Good news though that Costco has dropped the Amex card. I had no real need for it beyond Costco with one exception - Amex Front of the Line tickets from Ticketmaster. Don't know whether I will keep the Amex card strictly for that or not.
5:39 pm
December 23, 2011
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This whole topic started by Loonie has opened my eyes to the benefits of shopping at Costco and the not so benefits of shopping at Costco. At this point I feel that I have definitely lost some loyalty for Costco and no doubt some of their customers feel the same way.
Although I already had an Amex Card that I could shop at Costco with, I decided to take on the Amex Costco Cash Back card with my pic on it. I liked the idea of one less card in my wallet as I would no longer have to carry a membership card, better security as my pic was on it, and the cash back option. But now that the change has been announced I am annoyed that I fell for the Amex Cash Back card to "fit into their mold" for an acceptable way (to Costco) to pay for my purchases. No doubt the Amex/Costco agreement likely lined the pockets of Costco for every purchase made on that Amex card. If they say any MasterCard is acceptable there is no way that I will fall into to their new card, if there is one, no matter how good it is, no matter what its longevity it will be!! I have an Executive Membership with Costco and was very surprised what items are excluded from the Executive Membership rebate. Makes me wonder if the items that are excluded should be purchased elsewhere...ie drugs at Safeway for 7X Air Miles points...but a much higher dispensing fee. And as being a cross border shopper I wonder if I am collecting 2% on those purchases or not. Once I see what card I can use in the USA, as it appears they are still on Amex....and it appears my Amex Air Miles card will do the trick, I will be re-evaluating all of my credit cards of what ones to put back in service and what ones to cancel (for sure the Costco Amex Cash Back). 
I cant wait to see their suck up campaign!!!
See 2% Excluded Items Here
http://www.costco.ca/wcsstore/.....008-EN.pdf
7:31 pm
October 21, 2013
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I think Costco must have gotten a "promo" when they signed up with Amex.
Amex would have bargained hard to get their foot in the door with the exclusive deal.
Now that the promo term is over, they no longer find it to their best advantage - just like us!!!
I wouldn't be surprised, too, if Costco felt it had reached its saturation point with the Amex card, and it wasn't a high enough percentage of their members to justify itself. I would say too that it was a poor incentive for bringing in more members. Paying without it can be a hassle, particularly if you don't want to use debit, but not everybody wants to (or can) take on another credit card, particularly one with limited acceptance. I was surprised to see that Buffett owns so much of Amex. I wonder what he sees in it.
Oh, to be a fly on the wall in these inter-corporate discussions. High stakes indeed! Money, money, money. It always talks. And sometimes it walks!
7:33 pm
October 21, 2013
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P.S. In Ontario at least, you can't get any kind of points or airmiles or whatever on prescription drugs, no matter where you shop. I believe this is a rule from the pharmacy profession.
8:26 pm
December 23, 2011
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Loonie said
P.S. In Ontario at least, you can't get any kind of points or airmiles or whatever on prescription drugs, no matter where you shop. I believe this is a rule from the pharmacy profession.
Safeway had been giving 7X Air Miles on prescriptions for years then got outlawed...but it is back in, in B.C.
12:37 am
December 23, 2011
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Bought gas at Costco today. As we already knew, the pump screens are saying both Costco Amex and Costco MasterCard and a new decal on the pumps showing Capital One MasterCard.
12:33 pm
February 20, 2013
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I read an article in the Financial Post about the Costco Amex card essentially not offering any further cash back after Sept. 25 (Article). I went into the store to confirm this and was told it was true.
So it appears that you can use your Costco Amex card to the end of the year but you will not get any cash back after Sept. 25.
I got this in an e-mail from Costco on Sept. 26, "You may continue to use your TrueEarnings or American Express Platinum Cash Rebate Card at Costco warehouses and gas stations in Canada, as well as on Costco.ca and everywhere else that accepts American Express, until December 31, 2014, unless you accept a replacement card from American Express. If that is the case, you will no longer be able to use your TrueEarnings or American Express Platinum Cash Rebate Card or earn rewards on them".
This implies you will earn rewards until the end of the year? However you should make sure that you wait for your Costco Amex rebate cheque or confirm you will get one before cancelling your Costco Amex or accepting this new Amex card the e-mail talks about.
So I guess if you want a reward for using a credit card at Costco from now until the end of the year you need to use a different Amex card?
You can apply for a new Capital One Costco Mastercard now but you can't use it at Costco until Jan. 1. Here is the link describing the card details and their introductory offer (Capital One Costco Card).
12:48 pm
October 21, 2013
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Thanks for the info.
I am really surprised that they would stop the cashback as of Sept 25. My reading of the FP article is that there will be no further rebates on the Amex Costco card accumulated after Sept 25, although it will be accepted in the store as a credit card. Amex wants you to switch to their other card, which offers 1.25% on everything, but won't be accepted at Costco in the new year. I don't have any Amex card, so it doesn't impact me personally, but I think this whole situation has been poorly handled, and it makes Costco look really stupid.
This perception is not helped by the description of the new Capital One card. Why would Costco want to be encouraging people to go out to restaurants? 3% is a sizeable return, on restaurant items. (I wonder if you can get this at Tim Horton's? - which might be a better deal than the new Tim's card!) It just seems to me that if you're in the business of bulk food sales, then what you don't want to do is shift people's spending from yourself (by eliminating your own cashback) to restaurants (hard to imagine Costco makes anything on that). Is there something I'm missing?
Presumably, the cashback on gas will work at Costco gas stations, but why single out the gas for the rebate?
The whole thing makes little sense to me. I don't understand the Costco co-branding. I have never seen a co-branded card before where the retail brand seemed irrelevant to the card issuer. Why would anyone get this card, unless they just happen to belong to Costco and they also go to a lot of restaurants? For the 1% you can get back for regular Costco purchases, you can use other MCs.
Please write your comments in the forum.