Credit, Personal Finance, Shopping 
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Ethical Question: Getting Perks & Returning Products

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Jonathan explains a loophole in the Discover holiday promotion at Mills malls where you can buy $200 of stuff on your Discover card, get the $20 gift card, and then return the stuff while keeping the $20 gift card. As a very vocal and ethical group (which is a great thing and evidenced in numerous posts in the past), I wanted to know what you all thought of this. Is it right? Would you do it?

My personal take is that it’s a little dishonest (I saw ‘a little’ only because I don’t like judging other people) because you are taking advantage of the system by buying something with the intent of returning it later just so you can get a receipt for the $20 gift card. But how does this compare with looking for receipts on the ground (you’d have to look a long time to find receipts on a Discover card but whatever)?

I really want to hear everyone’s thoughts on this one… thanks!

{ 13 comments, please add your thoughts now! }

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13 Responses to “Ethical Question: Getting Perks & Returning Products”

  1. michael says:

    too much work for $20, but I’d do it it it was more

  2. Andy says:

    Nope. Not honest. Several years ago, I think it was Microsoft that had a similar problem with a promotion. I vaguely recall you had to sign up for some service, but the law said Microsoft couldn’t prevent people from canceling after they’d received the promotional materials. (Maybe it had to do with being offered over the internet???) At the time, when they realized their error, they said they’d honor their offer, but that, in their opinion, most people were ‘honest’ and woudn’t ‘take advantage.’

    If you find a $20 on the street and there’s no one else around, I say its yours. If you have to make one trip, purchase goods, and then make another ‘trip’ to return them, you’ve “made” $20, I suppose, but it isn’t “right livelihood” and not a good thing to be doing with your time.

    I gather that you only need a receipt to get the gift card–I tend to hoard receipts and eventually shred them. Searching for someone else’s receipt would again fall under ‘not a good thing to be doing with your time.’

  3. I challenge the loophole theory. I think if one is ambitious enough, one can find numerous retailers whose promotions one could work around. The retailers know this, and are aware that some people will try, and the losses get passed back to the honest customers.

  4. Miller says:

    Questions about ethics usually aren’t black and white, right? I think this is just another one that is somewhere in between. And where in tha spectrum it falls depends on the person. Some people think 0% BTs are unethical. What about buying something, using it once and then returning it? What about siging up for those credit card services for a $10 check and then cancelling the service? Ethics are hard to judge. First thing o check is to make sure its legal. It looks like this one is… so I dunno where you go from there.

    I think the reason so many people got up in arms about the “tipping with cash” post is that that would be actually helping people do something illegal (not pay taxes).

  5. samerwriter says:

    Tough question. I wouldn’t feel comfortable doing it. But for some reason I do feel comfortable taking the $100 for the Citibank Credit Protector service that I never plan to use or pay a penny for.

    I also agree with the commenter who said it’s too much work for $20.

  6. Matt says:

    I won’t be taking advantage of this particular moneymaker, but only because I don’t have a Discover Card.

    Ethically, I don’t have a problem with this at all. Companies offer promotions like this because they are going to make money off of them, and the fact that a small percentage of people will go through the effort to take advantage doesn’t mean that they won’t make money. I imagine that, like all promotions, the potential for exploitation has been built into the cost.

    A thousand people might walk away with $100 each, costing Discover $100,000. But in the meantime, a hundred thousand people will have been persuaded to spend an additional fifty bucks apiece, which will net Discover an additional $500,000 in interest payments and late fees. Of course, I’m pulling these particular numbers out of my ass, but they illustrate my point.

    If I show up at a timeshare meeting for the free pizza, and have no intention of buying a timeshare, I don’t think I’m harming the good folks at Timeshare USA. The lost pizza is simply a (relatively small) cost of doing business.

    To me, a wrong behavior must cause some harm. I don’t see the harm here at all. Another poster mentioned that the honest customers eventually bear the costs of this type of shenanigan, but I’m not convinced that this is the case. The overall budget of Discover is so vast and complicated that it’s difficult to point the finger for, say, high late fees at the customers who have taken advantage of this type of promotion. There is a long, long list of expenses and factors at a credit card company that have a more material impact on the bottom line for the customers than something like this.

    Another example: Supermarkets often take a loss on a single sale item in order to bring people into the door. The theory is that a person who comes in to buy the .59 2 liter of soda will then stick around to impulse buy something like a $2 candy bar. If a consumer buys only the soda and walks out, no one can complain that the consumer has been unethical.

    I understand that returning the item is the facet of this that sticks in peoples’ craws, but Discover isn’t selling those items. Discover is selling credit, often at a premium. This is an incentive by Discover to use their card, and the consumer will be using it.

    Matt

  7. Tom says:

    I don’t really think you can answer an ethical question simply by asking how much it hurts someone else. You can rationalize a lot by doing that. If you walked into a Wal-Mart and took $50 dollars out of a register they wouldn’t miss it much, but that doesn’t make it right.

    I don’t have a problem with taking advantage of an offer that will end up costing the person who made the offer. If you make your purchases, get your gift cards, then pay off your bill it’s the same result for Discover. However if you’re planning on returning what you buy I think you’re not keeping up your end of the bargain. I just think it’s dishonest.

  8. UNC says:

    Isn’t Discover getting something out of it even if you return the items? Transaction fees from the store or something along those lines and the store will get their merchandise back. Seems like a lot to do for $20 though, especially since I hate shopping.

  9. Flexo says:

    For me, this would be too much work for $20. Do the terms of service expressly forbid it? If not, then I don’t have a problem with it. Large corporations have lawyers who should think of these possibilities and should count on them happening. If the terms of the agreement don’t forbid it, then they must be willing to accept it. I t imagine their lawyers would have thought of it all ready, and if it mattered to them, they would say so explicitly.

  10. Matt says:

    It’s entirely fair to game Discover for this, but I think it’s a bit unfair to the retailers, to buy things with the intent of returning them, just to game a system they didn’t set up. Accepting returns consumes a disproportionate share of a retailer’s expenses, and it’s not really fair to exacerbate that problem when the retailer in question isn’t the one who wrote the loophole into the plan.

  11. Mike says:

    A good point was actually made about the transaction fees. If you are looking at someone who pays their bill in full each month, they would actually prefer you buy it, then take it back, since they make money off of both transactions, while costing them little.

  12. jim says:

    I didn’t think credit cards made money when you returned an item, it’s like voiding a sale… since it never existed then the credit company (or the middleman-type company) doesn’t earn a fee.

  13. CK says:

    Actually the retailer pays a small fee for each transaction that isn’t refunded when an item is returned.


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