Maybe you've seen the ads on TV or heard them on the radio or seen them in magazines. Discover Card would like you to know that you can earn 5% cash back in certain categories (currently, Restaurants) when you pay using your Discover card. Everything else, you earn 1% cash back. Coming up in July, it's even better – the 5% cash back applies to purchases made in the Gas Stations, Hotels, Movies and Theme Parks categories. Sounds awesome!
But we were not born yesterday. We read the fine print, don't we?
* Earn 5% Cashback Bonus for gas (at stand alone gas stations), hotel stays, movies and admission to theme parks from 7/1/10 (or the date on which you signed up, whichever is later) through 9/30/10, subject to a cap of $300 in purchases.
It's that last bit that interests me. What is 5% of the “cap of $300 in purchases”? Fifteen bucks. Sure, that's better than the three dollars that you normally earn under the 1% plan, and I'm not one to complain about getting cash back on things I'm going to buy anyway. What bothers me is that in all of the advertising for their 5% deals, Discover never mentions up front that there's a pathetically low cap. I can just imagine the number of people that see that ad and think, “hey, I spend $1,000 a month on hotels alone because I travel a lot, and since I drive, I spend another thousand on gas! I could probably rack up a hundred bucks or more in cash back, just on those two categories!”
No, you can't.
Can you imagine how ridiculous it would sound if the voiceover in Discover's TV ad told the truth, out loud? “Earn up to $15 cash back on the things you buy anyway, subject to terms and conditions.” Who would rush out to sign up for a new Discover card?
That, I suppose, is exactly why companies feel they need to trick us by playing with the numbers and using fine print shenanigans.