Merchant Category Codes (MCCs) determine how bonus categories are assigned for credit card spending so it’s worth paying attention to how they work.

If you’re like most credit card customers, you have no idea what a Merchant Category Code is. But it can pay—quite literally—to understand this industry term. 

A Merchant Category Code, or MCC, gets assigned to every company that  accepts credit cards. The MCC categorizes each business based on the kinds of products it sells or services it provides, like this: 

5411Grocery Stores, Supermarkets
5698Wig and Toupee Shops
7393Detective Agencies, Protective Agencies, Security Services including Armored Cars, Guard Dogs

Credit card companies have various uses for these codes. At GigaPoints, we’re most interested in one: how companies use them to calculate bonus rewards. Merchant Category Codes determine whether or not a transaction is eligible for, say, 3 points per dollar on dining rather than 1 point per dollar for general purchases. 

The problem is, MCCs aren’t always consistent or accurate. There are three common issues: 

  1. The operations of a business don’t match its code. Maybe the code was assigned years ago, and now the company sells something different. Or, it may have many different kinds of businesses under one master MCC. For example, a restaurant inside a hotel might use the MCC for the hotel rather than for a restaurant. In that case, you might earn bonus points on a hotel card, but not on a card that gives bonus points for dining.
  2. Different store locations may have different categories. A “regular” Walmart store, for, example, is classified as 5310: Warehouse/Wholesale, while a Walmart Supercenter is classified as 5411: Grocery Stores, Supermarkets. This can make a big difference if you have a card that offers 4x points for grocery purchases. 
  3. Different  credit card companies may put codes into different categories. Chase might put 5451: Dairy Products Stores in the “Groceries” category while American Express does not.

So what’s a cardholder to do? Visa customers who are planning a big purchase or want to make sure they’ll earn bonus points with a particular business can use the company’s MCC lookup tool to check how a vendor is coded. (Amexers, unfortunately, are on their own.) 

If you think a purchase was categorized incorrectly, a friendly call to customer service may get you the additional bonus points.

At GigaPoints, we do the best that we can with the data that we have. But how complex MCCs can be, there will inevitably be instances where our categories will not match up with a credit card company’s calculations.  If you find cases of this, please let us know.