Numerous websites such as this Time article or this Nerdwallet page say you can buy gift cards at grocery store to get the higher category rate when applicable.

You can purchase gift cards at supermarkets for Amazon.com, Starbucks and many other chains, giving you an effective 6% cash back at those stores.

Source: Best Cash Back Credit Cards of 2016

I just talked to American Express online chat and the rep I talked to said this is not and has not ever been the case. I said,

"So if I go into the grocery store and buy $30 in groceries and then get a $20 starbucks card, I don't get the 6% on the starbucks?"

and the rep said no that portion would not be included.

Could someone tell me if this rep is correct, I find it a little concerning that there are many reputable websites and publications that all say otherwise.

  • 2
    What was true of the writing of the article may not be true today, and it will be something different three months from now. It's likely the software that runs these kinds of systems can be changed within moments.
    – Pete B.
    Jul 13, 2016 at 16:34
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    @PeteB. the rep I spoke to stated, "this is not and has not ever been the case" - I specifically asked if it was at one point and perhaps changed and she said no.
    – Ender
    Jul 13, 2016 at 16:40
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    Worth noting that many gift cards have a purchase fee that could negate any savings. Jul 13, 2016 at 23:33
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    @Comptonburger store gift cards such as Starbucks or Amazon don't have fees. A Visa gift card is $5, so 1% on a $500 card. A 5% gain if this works on the 6% Amex card. Jul 14, 2016 at 1:44
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    @Ender My experience suggests that anyone who's on the front line of fielding customer or potential customer inquiries (sales, IT help, anything, any industry) is typically as ignorant as the customer on most complex matters.
    – jpmc26
    Jul 14, 2016 at 4:50

5 Answers 5


If you go to a grocery store and purchase retail gift cards along with other products, and you pay with a credit card, your credit card company generally does not know what you spent the money on; they don't get an itemized receipt.*

If this is the case with your rewards card, then yes, you would get the cashback reward on the gift cards, because all the credit card company knows is that you spent $100 at the grocery store; they don't know (or care, really) that $50 of it was for an Olive Garden gift card.

This, of course, should be fairly easy to test. Buy the gift card, wait for your statement, and see if they included the purchase when calculating your rewards.

* Note: I don't have an American Express card, but from some quick googling I see that it is possible that American Express does actually receive itemized billing details on your purchases from some merchants. If your grocery store is sending this data to AmEx, it is possible that the gift cards could be excluded from rewards. But again, I suggest you just test it out and see.

  • Would there be any way to find out if Amex recieves this or not? Would that be in the fine print somewhere that I could read before opening an account?
    – Ender
    Jul 13, 2016 at 18:14
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    @Ender You could certainly look at the terms. But you did call and explicitly asked your question to AmEx and received an answer. I think it's possible that the answer you received is incorrect, but if it is incorrect, you won't find the correct answer in the terms. The only way to find out for sure before you get the card is if someone comes on here that has an AmEx card and shares his experiences. Even then, AmEx could change their policies at any time.
    – Ben Miller
    Jul 13, 2016 at 18:18
  • @Ender Here are the AmEx rewards terms and conditions. It does talk about "Purchases and loads of reloadable prepaid cards" not being eligible purchases, but if you are purchasing a gift card at a grocery store register, I suspect that they have no way of knowing what you purchased at the grocery store.
    – Ben Miller
    Jul 13, 2016 at 18:27
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    I have asked AmEx customer suppor, and they explicitly told me that gift cards at grocery stores are permitted as purchases that receive rewards. (Maybe the service rep was mistaken, of course.) I suspect the "reloadable prepaid cards" identified in the Amex terms refers to general debit-like cards, not gift cards redeemable at only a particular merchant.
    – apsillers
    Jul 13, 2016 at 18:59
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    @BenMiller I believe the "reloadable prepaid cards" here is referring to those debit card alternatives that are essentially cash equivalents. Grocery stores usually have strict policy on these products that sometimes prevent customers from using credit card to buy them altogether.
    – xiaomy
    Jul 13, 2016 at 21:57

In a similar situation I wrote about How I Made $4,000+ on a Cash Back Credit Card Offer. The total was actually $4550, and was from an insane offer from a new credit card my bank advertised. 10% cash back on all spending during the first 90 days. I wondered if gift card purchases counted, and more than store cards, I saw that Visa gift cards with a $500 value sold for a $4.95 fee. A 1% hit.

It would have been foolish to load up, and realize that they were somehow excluded, so I bought 2 and followed the transaction on line. When I saw the 10% credit, I went full steam, and bought these, $2000 at a time, as that was the limit CVS imposed. In the end, I stopped at $50,000. (And the bank killed the online offer about $25K into this, but still honored my 90 days) Yes, I had to make payments mid cycle to avoid the card limit ($20K), but in the end, the bit of effort paid off. It took a bit over a year and a half to burn through them. In hindsight, I'd do it for $100K if the opportunity came up. Cash in the bank is earning near zero.

TL:DR Make a small purchase and confirm your card gives you the bonus you expect.

  • Amusing anecdote but how does this answer the question?
    – Ender
    Jul 13, 2016 at 18:07
  • I added a TL:DR , better? Jul 13, 2016 at 18:09
  • I don't have the card. I'm comparing cards in order to open one. I need an answer that addresses how to know the bonuses prior to opening the card
    – Ender
    Jul 13, 2016 at 18:09
  • Ben's answer seems to be correct, that the stores probably don't break out this data. Jul 13, 2016 at 18:11
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    It was as risky as having $50k in cash. I'd typically not have more than a few hundred dollars sitting around. Somehow a card might not have been loaded correctly, and I kept the receipts, no issues. It was a pain when the value was sub $5. Some stores would just reject using it to purchase anything. So I used them to pay my cable bill and burned off the small balances. Last, I might have been questioned under suspicion of money laundering. Those cards are an easy way to move money. Jul 14, 2016 at 0:33

Understand that buying a Starbucks gift card at the grocery store to receive 6% back on your coffee rather than 6% back on your groceries is an exploit of a flaw in the benefits program, not a feature. It's definitely not a blanket yes or no answer, the only way to find out is to try.

Separately, I don't know why you would find this "concerning." This will vary greatly between merchants and cards. There will always be new points churning exploits, they don't last forever and you can't expect every customer service rep to be well versed in methods employed to juice cardmember programs.

Hell, a number of years ago one person figured out that he could buy rolls of $1 coins from the US treasury with free shipping and no additional fees. This guy was literally buying thousands of dollars of cash each month to deposit and pay his credit card bill; completely against the terms of the treasury program for distributing the $1 coins. A number of people had their cards and points/cash back revoked for that one.


(I agree with the answers above; would just like to make a couple of additional points.)

It's a good and simple strategy to try it out with a small amount as suggested by @JoeTaxpayer♦. It's also generally safe to assert that card issuers currently don't receive or actively look at itemized transaction details. But that does not mean they cannot in the future.

Some stores utilize level 3 data processing, which tells the card issuers exactly what you bought in a transaction. An example of level 3 data being utilized to reject rewards is with Discover, which announced a 10% cashback reward for any transactions made with Apple Pay last year. It later introduced an additional term to exclude gift card purchases. And this has been verified to be effective - no more reward on gift card purchases; clawback of cashback on existing gift card transactions.

As far as I know, Amex does receive and look at some level 3 data retrospectively. That does not necessarily mean they will claw back your cashback after initially rewarding the 6%. But it might show up if you ever trigger an account review, and be used as evidence of your "abuse" of the program (which BTW is defined rather subjectively). There has been many cases of account shutdowns because of this. Card issuers are also trying to do a better job preventing "abuses" by proactively setting caps on rewards (as opposed to closing those accounts afterwards and taking the rewards away altogether).

Given the trend in recent years, I have to speculate that at some point the card issuers would put clear language in the terms against gift card purchase and enforce it effectively (if they haven't already). This reward game is constantly changing. It's good while it lasts. Just be prepared and don't get surprised when things go south.


I actually just did that with my Chase Freedom card. They rotate categories every 3 months, and from April-June it was 5% back at grocery stores. So I bought a ton of gas cards and got my 5% back. Next I figured out I would be clever and buy a ton of store gift cards (grocery gift cards) right at the end of the quarter, then use those in the future to purchase gas cards. Well, I just tried that a couple days ago and discovered the store refuses to sell a gift card if you're paying with a gift card! So now I'm stuck with $1,000 in grocery cards until I use them in actual grocery purchases haha

One of the things about this grocery store is they partner with a gas station on their rewards program. They offer 10 cents off a gallon with every $100 spent in store, and they double it to 20 cents off a gallon if you buy $100 in gift cards. Then on the back of the receipt is a coupon for 10 cents off per gallon -- which they double on Tuesdays. Unfortunately I think I'm one of the only people that takes this much advantage of the program :-/

Side note: I actually just changed the billing cycle of my Chase Freedom card to end on the 24th of the month. That way I can charge a bunch of rewards in the final 6-7 days of the quarter. And if I have a $0 balance on the 24th, my bill isn't due for 7 weeks -- interest free! And Chase Freedom has never cared if you purchase gift cards with their quarterly rewards program. I also gave them a courtesy email giving the specific store and $$$ amount that was going to be charged, and of course they still called me with a 'fraud alert'...

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