Axis Bank suspended reward redemptions on Atlas Credit Cards to fight what they suspect is a program misuse for certain cardholders.
The Problem: Cracking Down on “Manufactured Spending”
Axis Bank believes some cardholders are engaging in practices known as “manufactured spending” to exploit their rewards program.
This typically involves using the card for business expenses (which aren’t eligible for rewards under the program’s terms) but trying to trick the system into awarding points/miles for them. Common methods include:
- Booking travel through specific channels: Some cardholders might be using online travel agencies (OTAs) that categorize business travel bookings under “travel” to earn rewards illegitimately.
- Splitting transactions: Cardholders might strategically split business travel bookings into smaller transactions to fall under the personal travel category.
Why This Matters to Axis Bank
From Axis Bank’s perspective, such practices can lead to:
- Loss of Revenue: The bank offers rewards based on card spending. If a significant amount of spending is illegitimate business expenditure, it reduces their profit from legitimate card usage.
- Program Abuse: A system full of loopholes can discourage genuine cardholders and make the program unsustainable.
The Bank’s Actions
To address these concerns, Axis Bank took a two-pronged approach:
- Requesting Invoice Verification: The bank sent emails to suspected users requesting invoices for travel transactions between a specific period. This aims to verify if the trips were truly personal and eligible for rewards.
- Temporary Reward Redemptions Halt: To prevent further misuse while investigating, Axis Bank temporarily suspended reward redemptions for all Atlas cards. This is likely a precautionary measure to prevent points from being redeemed before they can determine if the points were earned legitimately.
Impact and Criticism
This situation has created some inconvenience for genuine cardholders who weren’t misusing the system.
There have been reports of people receiving clarification notices even for small travel expenditures. Critics argue that Axis Bank’s approach is too broad and unfairly impacts honest customers.
What to Do If You Received a Notice
If you got an email from Axis Bank requesting invoice verification, it’s important to respond within the stipulated timeframe. Gather any relevant documentation (invoices, receipts, itineraries) to prove your travel was for personal purposes.
If you believe you’ve been flagged incorrectly, contacting Axis Bank directly to explain your situation might be helpful.
