Middle Age Miles

Grocery Shopping = Points Galore: Sizing Up the New Grocery Bonus Offers

amex chase grocery bonus offers points miles supermarket credit card
We can’t earn bonus spend at this grocery store in Ston, Croatia,
but we can earn boatloads of points on groceries in the US!

Introduction

Over the past couple of days, we’ve seen Amex and Chase come out with numerous bonus offers for spend at supermarkets. We wanted to line up all the bonuses and compare their points-earning rates, so we can analyze how to best use the bonuses for our upcoming grocery spend.

If you’re just doing regular grocery shopping, you can probably pick the highest-earning bonus available to you and simply hit it until it runs out. But if you’re purchasing gift cards (including Visa or Mastercard gift cards (VGCs/MCGCs) for manufactured spend), you’ll want to have a focused strategy that takes into account the full range of benefits and trade-offs for each card. Importantly, we’re not recommending that anyone make extra trips to the grocery store and risk additional potential virus exposure. But if you’re going to the grocery store anyway, you may want to take advantage of these unique opportunities.

In terms of manufactured spend, you may want to keep these points in mind:

  • Amex has high sensitivity to purchasing gift cards to meet minimum spend requirements for new-card and upgrade bonuses
  • Amex may be sensitive to gift card purchases in high volume generally; its terms and conditions give it the right to take adverse action against cardholders in the event of gaming
  • That said, we have not had problems so far (!) purchasing GCs in a volume sufficient to hit the $25k/year grocery spend cap on the Amex Gold card or the $15k/year threshold to earn a free night certificate on the Amex Hilton Surpass card; note that we always include at least one other item with our GC purchase when paying with Amex and try to stay away from stores known to report Level 3 detailed data
  • Chase generally has shown little sensitivity to gift card purchases

The Current Grocery Spend Offers

To help in analyzing the current grocery spend offers, we prepared a chart summarizing each offer. The offers are ranked by the “effective return” on each card. We calculate the “effective return” by multiplying the points-earning on each card by our baseline value for the particular type of points currency. For example, the Chase World of Hyatt card’s bonus is 3x Hyatt points per dollar. We give Hyatt points a baseline value of 1.5 cents per point; thus, our “effective return” for the World of Hyatt card’s grocery bonus offer is 4.5%.

We have also included 2 Amex cards that include US supermarket spend as a “normal” bonus category – the Amex Gold card, which earns 4x Membership Rewards (MR) points per dollar, up to a cap of $25,000 per year; and the Amex EveryDay Preferred card, which earns 4.5x MR points/$ if you have at least 30 transactions with the card each month (earning is 3x MR if you have less than 30 transactions in a month), up to a cap of $6,000 per year.

Here’s the full chart, based on the Amex and Chase offers that we’ve seen so far:

Analysis & Strategy

The Chase Sapphire Reserve (CSR) card and the Chase Freedom card (groceries are a 2nd quarter 5x bonus category on the Freedom) are hands-down winners here at 7.5%. We encourage anyone with these cards to use them and max out their caps first.

MS on these cards is nicely profitable, even using online liquidation where the total of purchase + liquidation fees may be in the range of 3-4%. Looking at the effective return rates on the chart, we’re seeing many cards where we project “profits” even with online liquidation rates. (That said, you’ll have to decide for yourself whether you want to “pay” for United or Delta miles or Hilton or Hyatt hotel points during these uncertain times, even at “discounted” rates.)

Beyond the best-in-class CSR and Freedom returns, you can continue down the chart to see what makes the most sense for you. One thing we’d note is that if you’re able to hit the annual cap on grocery spend on your Amex Gold and/or EveryDay Preferred card using spend outside the promotional periods for the other bonus offers, you might want to hold off on using those cards until the bonuses are over. You can always “catch up” on your spend on those cards later and still max out their caps.

For us, the critical strategy questions about where to place our grocery spend turn significantly on what big-spend bonuses we might be able to hit. For example, the $15k spend on the Surpass card for a Hilton free night certificate (FNC) looks like a juicy target, given that you’d earn 12x Hilton points (5.4% effective return) in addition to making progress toward a free night. Sadly for us, we just hit $15k last week, in preparation for upgrading the card to Aspire before its upcoming anniversary date, so we won’t be hitting that one. But suddenly, spending up to $60k on an Aspire card for an additional FNC seems like a reasonable possibility if much of the spend can be done at 12x – even though we categorized this deal as a “No Thanks” in our analysis of big-spend offers earlier this year (see Big-Spend Credit Card Bonuses & Benefits for 2020 – Yes, No or Maybe?).

[Also, note that Hilton free night certificates just became much more flexible and valuable today, with the announcement that unexpired and new Free Weekend Night Rewards issued through 12/31/2020 can now be used any night of the week, and newly-earned FNCs will be valid for 24 months rather than just 12!]

Another big-spend bonus that jumps out as appealing is the Hyatt Category 1-4 FNC for $15k in spend during a cardholder year on the Chase World of Hyatt card. If you haven’t hit that threshold yet, the new grocery bonus presents a golden opportunity to make $3,000 worth of progress. This one turns out to be helpful for us, as we’re still a bit shy of getting to $15k during this cycle.

We suspect that some Delta flyers who hold the Amex Delta Reserve card will salivate at the prospect of earning 4x Skymiles while making progress toward their Medallion Status Boost thresholds and MQM waiver. This benefit is magnified by the facts that (a) 2020 MQMs will be rolled over to 2021 for qualification toward 2022 Medallion status; and (b) bonus earnings are uncapped on this card.

Wrap-Up

Obviously, we see some great opportunities for points-earning and progress toward big-spend thresholds in this flurry of grocery spend bonuses. We need some groceries anyway, so we’re heading out to our local store to pick up some food and GCs, CSR card in hand!

What are your strategies for the grocery spend bonuses on Amex and Chase cards? Please share with us and other Middle Age Miles readers in the Comments!


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11 thoughts on “Grocery Shopping = Points Galore: Sizing Up the New Grocery Bonus Offers

  1. Bob

    Very Timely, Craig! And welcome back! I just finished my own spreadsheet looking at the same issue. My insights mirror yours. One question – does the Hilton Biz AMEX card free night have the same enhancements as the Aspire and Surpass? No grocery spend benefits, but that free night is right now significantly more valuable than before . . .

    1. Craig at Middle Age Miles Post author

      Hi Bob – Thanks for the comment. You’re right, the enhanced Amex grocery benefits are only on the personal cards. I don’t know for sure about the FNCs on the Amex Hilton biz cards, as I don’t have one and haven’t seen anyone else comment on this. I’m guessing that those FNCs will also be extended and available on weeknights, but it would be nice to get official confirmation. And I totally agree, adding weeknight availability is a game-changer for Hilton FNCs … as soon as we can travel again! Have a great weekend. ~Craig

      1. Bob

        Craig – FYI, according to a commenter on FM, the Hilton Biz card’s free nite cert is enhanced, too. The claim is he received the answer in a twwwt with AMEX.

        1. Craig at Middle Age Miles Post author

          Thanks for the update, Bob. That sounds like very good news! ~Craig

  2. Grant

    Great summary! I had this discussion with my wife earlier today regarding our grocery store shopping strategy. I’ve trained her to use her AMEX Gold Card for grocery stores, but I need to temporarily train her to use her Chase Freedom Card through 6/30, until we max out the $1500 limit.

    1. Craig at Middle Age Miles Post author

      Thanks Grant! Good job getting Laura trained up for grocery shopping!

  3. pepe mujica

    Nice to see you are back Craig!! As always with a great table that no other blogger built.
    Idea for a follow up article, what grocery stores sells 500 GC ?

    I’m glad you are done with the move, you should post some pictures of your new house 😉

    1. Craig at Middle Age Miles Post author

      Hi pepe – Many thanks for the comment and kind words. Haha on house pics – it’s nice but rather unassuming; much easier than our old house to lock-and-leave if and when Philly and I can travel again.

      Good idea on grocery stores. Trouble is, it’s very location-dependent so very hard to give advice that will help people beyond a very narrow area. Here locally in the north Dallas suburbs, we can buy 500 GCs at Kroger, Tom Thumb, Market Street, and probably some others. ~Craig

  4. Aaron

    These are great rates, but what are the stay at home options for redemption—at any price (other than for taxes)?

    1. Craig at Middle Age Miles Post author

      Hi Aaron – Thanks for the comment. You’re asking a good question, one that many people have spent a lot of blood, sweat and tears trying to figure out. And it’s a moving target because of changing rules & policies, like Plastiq shutting down GCs as funding sources for payments at the end of 2019.

      At any price? Start with Doxo, which accepts a wide range of GC as payment sources but has high fees. Beyond that, research and experiment. One research hint for ideas would be to use the “Search by Category” function on Middle Age Miles 🙂 ~Craig

  5. Pingback: Face Masks Everywhere, Extra Miles on Groceries, Diamond Princess Nightmare, Warren Buffett AMA - TravelBloggerBuzz

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