Amex Suddenly Ends Popular Delta Card Loophole That Turned Hotel Credits Into Cash—Now Clawing Back Refunds

American Express just slammed shut a popular loophole that let Delta cardholders easily turn hotel booking credits into cash—and has started reversing statement credits for cardmembers who try it.

Delta American Express cards offer statement credit for booking prepaid hotels and vacation rentals through Delta’s portal. The credits vary from $100 to $250, depending on the card (with larger credits for higher annual fee cards).

If you make an eligible booking, it should trigger the credit. Thing is, until recently if you cancelled the stay you’d get a refund but the statement credit wasn’t reversing. So people were using this to turn the Delta stays benefit into cash. However, about two weeks ago American Express started to claw back the statement credits when cardmembers try this.

• Historically people could get the Delta Stays credit to post and then later cancel for a refund without the credit being reversed

• Cancellations starting on or about January 29 started triggering the new clawback behavior, while many earlier cancellations did not.

• That means the Delta Stays credit now behaves like Amex Platinum’s Fine Hotels and Resorts credit.

Amex’s published Delta Stays benefit language includes the usual “credits may be reversed if refunded/canceled/modified” but it wasn’t enforced. Now it seems that Amex runs a ledger of eligible Delta Stays spend against credits issued. When a refund posts, it reduces eligible spend and triggers a credit reversal to keep credits aligned with net spend. That’s important because it’s preventing some of the workarounds that people are trying with this. And it’s even factoring for bookings made in one year for stays in the next.

Here’s one example from a Delta Business Gold cardmember:

• Booked $180 room on January 29
  
• Received $150 credit on February 1
  
• Refunded the room same day
  
• American Express reclaimed $135, not $150
  
• That’s because ‘last year they had booked $165, so $15 “rolled over,” reducing this year’s clawback by $15.’

That changes the card economics for many people who were previously gaming tihs, suggesting that the higher fee cards become harder to justify. However, if you’re really going to use the credits anyway this remains quite a valuable perk since – though it’s often an Expedia back end booking, with no loyalty credit – there are a lot more properties than the premium hotel booking credits offer like Fine Hotels and Resorts or The Edit.

Many people, by the way, wonder whether the Hilton Aspire resort credit clawback logic will change as well.

Statement credit reversals seem to take varying amounts of time. There was one person noting that their Gold card saw a reversal of the statement credit on the same day their refund posted, while two people wiht Reserve cards said their credit hadn’t (yet) reversed.

(HT: Miles Earn and Burn)