What is Price Protection?

Price protection is an agreement between a buyer and a seller whereby the parties agree to fix the price of a good or service for a specific period of time.

How Does Price Protection Work?

In practice, price protection (sometimes called purchase protection) is a feature of many credit cards, whereby customers can get a refund on purchases made with the credit card if the price of those purchases goes down within a certain time frame after the purchase.

For example, if you purchase an airline ticket to Orlando for $750 on January 1 with a credit card, but then the price falls to $500 on January 23, a price protection guarantee in the credit card contract entitles you to a $250 refund from your credit card company.

Why Does Price Protection Matter?

Price protection is a way to induce sales by easing customers' uncertainty about price changes. As such, price protection is more effective for goods and services whose prices change frequently. Though it is a common component of credit card agreements, it is generally not well-known.

Ask an Expert about Price Protection

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Price Protection.

Be the first to ask a question

If you have a question about Price Protection, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

Verified Content You Can Trust
verified   Certified Expertsverified   5,000+ Research Pagesverified   5+ Million Users