How credit card protection can bail you out if your purchases get lost or stolen

It can happen to anyone. You’re out shopping, you leave your bags unattended for a moment, and all of a sudden your brand new stuff is gone.

Luckily, many credit cards come with coverage that can really save you money — if you remember to use it. Many credit card holders aren’t even aware this is an option.

A purchase protection assurance policy will cover the cost of recent non-perishable retail purchases that are damaged or stolen — as long as you made them on an eligible credit card. Cards also sometimes come with a price protection guarantee that will reimburse you the difference if you find an item for a lower price within months of buying it. Some cards even offer a “purchase satisfaction” guarantee that will refund you if you are simply unhappy with a product and the retailer won’t refund it.

There are a variety of cards that offer this protection, even some that don’t come with annual fees associated with premium cards.

Your policy will specify a maximum lifetime coverage amount along with a limitation on how long purchases are covered. Generally that limit is 90 days for damage and theft and 60 days for price drops. Lifetime coverage limits can vary, but will often be about $60,000.

So how exactly does purchase protection work?

Sean Widdess, LowestRates.ca’s Head of Strategic Partnerships, recently discovered the perk of having purchase protection. His wife, Lisa, and her friend, Sabrina, had their shopping bags stolen out of their vehicle earlier this year.

The pair had been out shopping in Kelowna and ended up spending several hundred dollars each at a local mall. Sabrina used around $500 in gift cards, while Lisa put $350 on their MBNA World Elite Mastercard.

“After a whole day out shopping, they decided they wanted to go out for dinner. So they go in [leaving their stuff in Sabrina’s car], they have a great dinner, they drink their wine, they’re laughing, they have a great time. So when they come back to the car, they notice the door was open a little bit,” Sean explained. “They look in and all of the stuff was stolen. Every single piece was stolen.”

When they come back to the car, they notice the door was open a little bit. They look in and all of the stuff was stolen. Every single piece was stolen

Retail parking lots are a favourite spot for thieves to get their hands on new loot, especially during busy shopping seasons like back-to-school and the winter holidays. Even outside of shopping centres, unattended goods in cars are an easy target for someone looking for a quick score and sometimes the aftermath can be tricky to deal with.

Purchase protection can make that process a lot easier, however. After reporting the theft to the police, Sean found out he could file a claim to his credit card company for most of the stolen goods. The one exception is on perishable items, which Lisa had indeed purchased some of. They were however able to claim back $270 of the $350 spent, with the only real necessary legwork being that they had to go back to all those stores and get reprinted receipts.

On the other hand, her friend was not so lucky. Sabrina contacted her auto insurance company, but because her deductible was $500, she would end up spending about the same amount of money that she’d get back. Plus, she was afraid an insurance claim might raise her premium.

While she didn’t get everything she had back, Lisa was able to buy most of her stolen merchandise again at no additional cost, which is a lot more than can be said for her friend.

A few things to keep in mind for purchase protection plans

Don’t be afraid to ask - Purchase protection can help you replace or repair defective appliances, clothes, and even consumer electronics. Plus, since many cards with purchase protection also include warranty extension features, you may be able to fix broken toys and gadgets instead of dropping even more cash on replacing them. If you aren’t sure if something can be claimed, go ahead and just try it anyway.

Report right away - When it comes to stolen goods, it’s very important to report the loss to the police as soon as possible. Insurance companies will always want some assurance that your items were actually stolen. This will streamline the claims process and also helps you get your stuff back if it is ever found and recovered.

Keep those receipts - Not only will these come in handy when filing a police report, they are necessary for the insurance company to determine the accuracy of your claim. Organize your receipts in a file folder to easily keep track of the purchases you’ve made for at least the last three or four months. This will ensure that you will be able to easily make a claim if you ever need to.

Keep an eye on those deals - It’s natural to stop checking prices on an item after you buy it, but if your card has customer satisfaction guarantee, you can sometimes save money on unexpected price drops. Once again, even if you’re not sure something is eligible, it won’t hurt to call your credit card provider and inquire.

With lifetime coverage amounts in the tens of thousands of dollars, purchase protection coverage can save you a lot of money if used correctly. Of course, it’s protection you hope you won’t ever need, but it’s always better to be safe than sorry.