American Express is tweaking its gold card program again with a price protection enhancement.
All American Express gold card and platinum card owners will be eligible at no additional cost for the new feature, called Best Value Guarantee. The enhancement gives customers a refund if they can prove that an item they bought with their American Express card is selling for less elsewhere.
Last November, American Express launched a new charge card aimed mostly at its current gold card customer base. The new product, Rewards Plus Gold Card, was designed to fill the gap between American Express' standard gold card with a $75 annual fee, and its exclusive Platinum card that costs $300 a year.
Rewards Plus carries a hefty $125 fee, but offers various enhancements, including a unique program that provides cardholders with a monthly consolidated statement of the customer's frequent-flier activity.
While the New York-based card issuer hopes to garner some new accounts with this product, company officials said Rewards Plus would probably win more converts from the standard gold card base.
In an earlier interview, Frank Skillern, president of the U.S. consumer card group, said that Rewards Plus is designed to stem gold card attrition.
Spokeswoman Audrey Jonckheer said that Best Value Guarantee is part of American Express' overall strategy of "strengthening the niches that we have" by targeting specific groups of people.
Cardmembers are not required to do anything special to activate the enhancement, which will go into effect by Feb. 1.
If an American Express gold card customer buys an item, and within 60 days of the purchase notices an identical item advertised in print at a lower price, the customer can request a credit for the difference between the two prices.
American Express will provide a refund of up to $250 for each item, up to $1,000 a year.
In order to get the refund, American Express customers must send in their original charge card receipt and a clip of the advertisement showing the lower price within 90 days of purchase.
According to American Express' consumer research, there is a real demand for such a program.
Ms. Jonckheer said that consumers use price protection programs most frequently when they purchase electronic devices.
There are also certain items that are excluded from the program, like plants, animals, and precious coins.
MasterCard and Visa do not have comparable programs, but the associations said that some bank card issuers offer price protection programs independent of the standard Visa and MasterCard mandated gold card enhancements.
Most notably, Citibank has been offering price protection since 1991 for its classic and preferred customers.
Citibank limits its refunds to $150 per item up to $1,000 annually.