Some Axis Bank Customers Exploited A Loophole In Reward Points System, Here’s What Happened

Banks credit reward points to the customers’ accounts on the basis of transaction size, wherein the bigger the transaction results in more reward points for consumers.

However, if an individual cancels a transaction or returns the product on which the transaction was earned, the reward points of the specific transaction get reversed.

Source : ABPLIVE AI

Credit cards are becoming increasingly popular among consumers. From using reward points for travel to enjoying the comfort of airport lounges and maximising on discounts during shopping, the perks related to the cards have made them a favourable choice for customers.

However, a loophole in the reward points allotment system of Axis Bank resulted in a situation where multiple customers were able to take advantage of reward points that they didn’t earn, reported Livemint.

What Happened?

Typically, banks credit reward points to the customers’ accounts on the basis of transaction size, wherein the bigger the transaction results in more reward points for consumers. However, if an individual cancels a transaction or returns the product on which the transaction was earned, the reward points of the specific transaction get reversed.

Axis Bank failed to reverse such reward points for multiple customers for several transactions in 2023. As such, many customers took advantage of this loophole and earned great rewards by placing high-value orders on e-commerce platforms. When these customers cancelled their order, the bank refunded them for their transaction but missed on revoking their reward points.

This loophole continued for two years allowing customers to take advantage of it and enjoy many benefits from the rewards. It was finally fixed in January 2024, Livemint reported quoting Sumanta Mandal, founder, TechnoFino. 

Bank Trying To Recover From Existing And Former Customers

However, now the bank is deducting the excess reward points from the bank accounts of both existing and former customers. For existing ones, Axis has simply started cutting down points from concerned customers’ Edge Rewards accounts. If they dont have sufficient balance, their account balance is being turned negative, in turn, needing the customers to pay the remaining amount in cash.

In case of former customers, the bank has started sending notices demanding them to make the payment on the basis of the valuation of their excess rewards. However, it remains unclear how the bank will make them comply if they don’t pay voluntarily. Axis Bank has warned them that failure to settle the payments could result in legal consequences.