AMEX return protection overwhelmed by iPhone customers

I posted a story in early September on American Express' return protection guarantee and how some customers were taking advantage of the offer after Apple's US$200 iPhone price cut on 06 September.

A colleague who spoke with a representative from AMEX was told that they usually handle 1,000 to 1,500 claims per week for return protection. After the iPhone price cut was announced AMEX's return protection department fielded over 7,000 claims in two days. You can guess who they were from.

The program works like this, if you try to return an eligible item purchased in the U.S. within 90 days from the date of purchase and the merchant won't take it back, American Express will refund the purchase price. The problem with AMEX's return protection program is that there's a limit of US$300 per item and a maximum of US$1000 annually per credit card account.

Who would return a US$600 (or US$500) iPhone to get a US$300 credit? More people than you'd expect.

According to the AMEX representative a lot of people took the US$300 and ran. People that were disappointed with iPhone's on-screen keyboard and the lack of support for their corporate email systems (read: Exchange Server) made up the bulk of the returns. The problem is that returning your iPhone to AMEX doesn't release you from your contract with AT&T, so I wonder what these people purchase instead... A Curve?