Credit Card Offers Explained

 Update: October 2020

All sales (almost) of Flipkart and Amazon there will be a “Credit Card Offer” available. We all will be accustomed to the view where we see bank logo and 10% off or 15% off on the sale banner. The title may itself tell us what it means but there are some important aspects that you have to consider so as to not fall in the trap and utilize them for the maximum benefits.

Instant Discount vs Cashback
We fail to see the distinction between the two

Most of us think that Instant Discount and Cashback is one and the same but they are not.

Remember why there was no reduction in the cart amount even though you purchased items more than the minimum cart value and are paying from the credit card that is mentioned in the offer. This is the case that the offer is a cashback and not an instant discount.

There are two types of credit card offer:-
a) Instant Discount – The best of the two. Here the qualifying discount amount is cut from your final cart value and you pay the balance amount.

b) Cashback– Here the qualifying discount amount will be reimbursed to your credit card account within the date mentioned by the online website. The date as to when you will get the cashback can vary from sale to sale, but is generally 3 months after the sale.

Read Terms & Conditions
This is a very important document to refer which governs whether you can avail the discount or not

The terms and condition is a sacrosanct document to read before making up your mind on availing the offer. Hence any disputes regarding the credit card offer will be based on conditions mentioned in this document. This being the fact that most of the time we go ahead with availing the credit card offer by only referring to the points displayed on the offer banner. There may be many points which are not mentioned in the offer banner but will be certainly mentioned in the terms and condition document.

The terms and conditions document will generally have many points, but the main points you should be looking at is as follows-
a) Which type of cards are excluded from the offers.
b) Which are the products excluded from the offers.

Maximum Discount Cap
It is the maximum discount that you can avail

Maximum Discount Cap is an important parameter in these offers. Hence, this had to be noted priorly. The maximum discount cap will either be mentioned in the offer banner or it will be in the terms and conditions document.

To give a math example,
Suppose the credit card is giving a discount or cashback of 15% and the max cap is 5000.
The maximum amount that you can avail discount on is 5000/0.15 which is Rs. 33,333/-.
Hence if you buy something for Rs. 50,000, you will not get the discount for the remaining amount which is 50,000-33,333 = 16,667.

Minimum Cart Value
It is the minimum cart amount to qualify for the credit card offer

As the name suggests, it is the minimum cart amount to qualify for the offer. This minimum cart value will be mentioned in the offer banner or in the terms and conditions document.
This value has to be carefully noted as this is an important factor on whether you will be applicable for discount in case you return your product. Please read the next point to get a clear picture.

Returns may affect Offer
Be cautious when doing returns as it may affect the offer that you have availed

You may have come across instances where you have successfully availed the discount/cashback all to know that the discount/cashback was cancelled when the product was returned. This may be a confusing case most of the time. Well, this is mainly due to the fact that on return our final cart value has fallen short of the minimum cart value required to avail the discount. Hence the above being the case, for cashbacks the website does not award the cashback and in case of discounts the website will minus the discount amount from the refund amount. Hence, this has to be kept in mind before deciding on a return.

Offers are never a free lunch if not used sensibly

A point to realize is that “Credit Card Offers” are for websites to attract you into buying more and is this will certainly not be beneficial for you if you get into the lure.

We can take Tom's example for this below when he bought items in a sale just because of the credit card offers.
“Tom was in full enthusiasm when he saw a sale with credit card offer. He could already dream him being reach. The credit card offer being the primary reason for him to pre-phone his buying plan of next month to immediately. He buys the items he wanted and enters the cart only to find out that he still needs to buy Rs. 500 worth of items to qualify for the minimum purchase amount. Tom does a browse to find the magical item that can help him cross the bridge. But he couldn’t seem to find any product useful for him. After a brief brainstorming he comes to a conclusion that he will buy a portable hard drive worth Rs. 2000 as it will be useful for him anytime in the future although he does not need it at present. By this Tom qualifies for the credit card offer. Later on when he receives his shipment, and after a year, Tom finds that he has never used his portable hard disk and cursing his destiny for the fact that he would have been better off without the discount and saving on the hard disk cost“.

As the above message conveys, mostly during sales we unnecessarily compel ourselves to buy products (hoping we will use them in the future) to qualify the minimum cart value. Most of the cases we end up not using these future items.