What Are The Ethics of Taking a Travel Reimbursement and Keeping the 4th Night Free Rebate for Yourself?

I receive compensation for content and many links on this blog. Citibank is an advertising partner of this site, as is American Express, Chase, Barclays and Capital One. Any opinions expressed in this post are my own, and have not been reviewed, approved, or endorsed by my advertising partners. I do not write about all credit cards that are available -- instead focusing on miles, points, and cash back (and currencies that can be converted into the same). Terms apply to the offers and benefits listed on this page.


Citi Prestige has a fantastic benefit (well many great benefits, but for this exercise I want to focus on one) in fourth night free on hotel stays.

  • You book through the Citi Prestige Concierge, stays earn full points and stay credit, and then you pay at checkout with your Citi Prestige card. You then receive a statement credit for the 4th night of the stay.

  • This is fantastic for stays where the rate goes up on the 4th night of a stay.

  • And this is fantastic where you’re going to stay 3 nights anyway, just tack on a 4th night (best flexible rate, AAA rate, AARP rate) and earn additional stay or night credit towards status and promotions and additional points without coming out of pocket any extra money. It’s the perfect mattress run.

You can use this even at luxury properties, you can get huge savings if you book the kinds of rooms that are $400, $800, per night.

There’s no limit to the number of times you can use this benefit each year (other than the calendar, 365 divided by 4).

In response to my post on Citi Prestige’s free golf benefit, reader HoKo comments,

As Ben just posted about he has already saved thousands of dollars with the 4th night free benefit, and stands to save thousands more over the course of the year. I realize Ben is an outlier [because] he lives in hotels but so do the giant army of consultants and sales people that travel 4-5 days per week every week of the year. Those sort of people could absolutely clean up using this card, and I’d have to think they would absolutely destroy Citi’s profitability metrics for this card.

The two things that Citi has in their favor to prevent that from happening are:

1. A lot of companies require spend to be put on corporate cards and/or travel reservations made through their in house travel portals

2. Many consultants follow a model of flying out early Monday morning and coming home Thu[rsday] night so they are only doing 3 night hotel stays every week. I wonder if this is part of the reason Citi chose 4 nights as the threshold.

This is a fantastic benefit, and the consultant angle got me thinking about something.

For someone who follows an out Sunday, back Thursday schedule each week (or out Monday, back Friday) and books and pays for their own room and gets reimbursed, this card is a clear gold mine.

  • They book their stay. They check out and pay for the full stay. They submit their folio for reimbursement.

  • They also get the fourth night of their stay credited back to the Citi Prestige card.

It’s a perfect double dip.

Normally, a rebate isn’t taxable. But if you’re receiving tax free reimbursement and a rebate then technically that rebate should be considered income. That’s between you and the IRS and the subject of a different discussion.

Here I’m interested in the ethics. Should you take the full reimbursement for your hotel stay, or should your employer profit from the fact you happen to have a card with this benefit?

Your employer may be billing a client, but that’s not really relevant since it just pushes back the question to whether the client should be benefiting from the card you happen to have to pay for your stay.

  • Your employer has you on the road four nights and expects to pay for four nights of lodging. You do actually pay for four nights of lodging, and you submit your receipt just like anyone else at the company. What’s wrong with that?

  • But you aren’t actually incurring a cost for the full four nights. Should your employer really be reimbursing you for more than what you’re actually out for the stay?

  • Citi Prestige is your card, not your employer’s. You pay the annual fee on it (even though you get way more out of it than the fee costs), not your employer. Should your employer really benefit from a rebate provided by that card? Isn’t that your cardmember benefit?

What’s right here? Who should benefit from the rebate, you or your employer?

I know who will most of the time under this sort of scenario…

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Editorial note: any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Comments made in response to this post are not provided or commissioned nor have they been reviewed, approved, or otherwise endorsed by any bank. It is not the responsibility of advertisers Citibank, Chase, American Express, Barclays, Capital One or any other advertiser to ensure that questions are answered, either. Terms and limitations apply to all offers.

Comments

  1. Not sure how it’s a problem, like most are saying. If you stay in a $100/night hotel for 4 nights, that’s $400. If you told the company you will stay in this hotel for 4 nights, the company approves, stating an “OK” for the $400. You get a rebate of $100 later. Did you cheat the company? They approved the $400, so you haven’t cost them anything extra, and you didn’t fraudulently submit any paperwork or anything.. right?

    Like others have said, what if you paid for a $5000 airline ticket on a 2% CB card and pocketed $100? Isn’t it the same thing?

  2. There are certain conditions that would justify its use or not IMHO
    -If your employer had paid the 450$ fee for the card so you could get that rebate then the rebate should go to the employer.
    -If you are to pocket the 4th night free because of the card which you paid for, you should not be booking a rate through the 4th night free portal, if you could do it elsewhere for cheaper just to get the 4th night free.
    -As long as your use of the benefit does not cost the employer more and you follow your applicable travel rules, how you arrange your finances should not matter to the employer.

  3. Since I foot the annual fee charge I’d have no problem reaping the benefit personally. Much like I don’t accumulate FF points and then buy a freebie award ticket for the company. I suppose the only morals question here is if that practice is sound or not, in which case the company should go to a travel dept inhouse that books and pays for all travel.

  4. Also, I just had a stay of 17 nights. I booked the cheapest option, that was equal in price to the hotel usually booked by remote visitors, yet that got me HHonors points. I felt fine doing this. Then I learned of the Hyatt Diamond challenge and looked into switching to the nearby Hyatt House. Cost would have been about $250 more for those 17 nights. I stayed with the Hilton option, I could not bring myself to ‘take’ $250 of my employer’s money just to earn status. I, however, do not feel badly about pocketing 60k HHonors points from the trip. I suppose, in the end and as long as it doesn’t violate company policy, it’s a judgement call for us to make.

  5. My new Citi card is on the way. Am I to understand that this “4th night free” promotion applies to rooms booked at other than the least expensive rate? THAT would be an ethical problem. If you’re paying the same rate, then you get to keep the fourth night money.

  6. Does anyone know what the rates are like for the concierge? I know some sites like Kaligo & Rocketmiles quote more expensive per night rates but then give you miles. So if a regular hotel was 200/nt and when you book through the concierge it’s 300, that could have some moral grey area. I would just also like to know how competitive the rates are because that would make the card more attractive.

  7. I’ve never had any problem accessing any rate that is on the hotel website through the concierge, including AAA and senior discounts and promo rates.

Leave a Reply

Your email address will not be published. Required fields are marked *