The strange economics of Kohl’s Cash


Kohls Cash

Every few weeks, Kohl’s runs a sale where Kohl’s charge card holders get up to 30% off with a coupon and everyone gets $10 Kohl’s Cash for every $50 spent.  In fact, a sale like this begins today and runs through October 5th.  For this sale, charge card holders can use code SAVING30 to get their 30% off discount.

Even though the Terms & Conditions say otherwise, it has long been the case that one could stack the above mentioned savings with Ultimate Rewards Mall 10X bonus earnings.  And, physical gift card purchases earn points too.  And, Chase Freedom often offers Kohl’s as one of it’s 5X categories.  So, one could do the following:

  1. Go through the Ultimate Rewards Mall (10X)
  2. Buy physical Kohl’s gift cards and pay with the Freedom card (5X)
  3. Go through the Ultimate Rewards Mall again (10X)
  4. Select charge card as form of payment
  5. Input 30% off code
  6. Enter in up to 4 gift cards for payment (before the charge card is invoked)
  7. Earn $10 Kohl’s Cash for every $50 spent.

In total, with the above steps, one could earn 25 Ultimate Rewards points per dollar, save 30%, and earn up to 20% in Kohl’s Cash.

Unfortunately, lately hasn’t been working quite right so some people have suffered from reduced Ultimate Rewards Mall payouts and cancelled orders.  Hopefully, that will all be cleared up soon.  But, this post isn’t really about that.  It’s about Kohl’s Cash…

UPDATE:  Since this post was written in 2013, I haven’t been keeping up with the latest Kohl’s changes.  However, here’s a comment from a reader named Mike that you may find helpful:

There have been a number of changes at Kohls involving kohls cash. For example, it used to be fairly easy to extend the life of kohls cash by buying something and then returning it. They used to give a merchandise credit with no expiration date for the portion paid for with Kohl’s cash. However, for the last few years, that policy changed and now you get back replacement kohls cash with a new 30 day expiration date. The best way to deal with kohls cash is still to convert it to a merchandise credit to get rid of the expiration date, and gain the ability to use other discount codes, shopping portals, easier free shipping, etc. So the way to do that is to make sure you get a gift receipt when you buy something with kohls cash, and then return it with the gift receipt. Returns with a gift receipt still get a merchandise credit with no expiration date. I just did this today and was pleasantly surprised to get a merchandise credit for not only the kohls cash, but also the sales tax on the kohls cash. It’s been awhile since I’ve done this, but I don’t think it was like that a few years ago – you would get a merchandise credit just for the kohls cash without sales tax, as this article implies in the first paragraph under returns. So this means that you no longer have to forfeit the one advantage of kohls cash (sales tax savings) in order to get rid of the expiration date, and gain the ability to use other discounts, portals and easier free shipping that you get with conversion. Also, although not directly related to kohls cash, but related to the method of making kohls cash more valuable, is that as of last September there is a time limit on all returns (180 days for most items), previously there was only a time limit on premium electronics.

Earning Kohl’s Cash

When Kohl’s Cash is offered, you get $10 Kohl’s Cash for every $50 of merchandise purchased ($50 is after coupons but before sales tax).  If you come within $2 of the first level of Kohl’s Cash, Kohl’s will round up for you.  For example, if you spend $48 (pre-tax), Kohl’s will round up and give you $10 of Kohl’s Cash as if you had spend $50.

The value of Kohl’s Cash

Kohl’s Cash is sent in an email when you order online, or given as a paper certificate when you make purchases in-store.  Either way, there is a set date range within which the Cash can be used.

When using Kohl’s Cash, the dollar amount of the Cash is taken off the total merchandise order before other coupons are applied.  This has a few negative consequences: 1) The portion of your merchandise paid for with Kohl’s Cash is not discounted by any coupons; and 2) Coupons that require a certain dollar amount to activate are harder to use.  For example, if a coupon gives you free shipping for orders of $50 or more, you need to have more than $50 of stuff in your shopping cart to account for the amount of Kohl’s Cash you want to use.

There is one positive aspect to the way Kohl’s Cash works:  The portion of your purchase paid for with Kohl’s Cash is not subject to sales tax.  For example, I had $40 worth of Kohl’s Cash that was about to expire so I visited Kohl’s in person and found an item that was on sale for exactly $40.  The cashier rang it up, I paid the $40 Kohl’s Cash, and all of the sales tax disappeared.

Since Kohl’s Cash prevents you from applying coupons to that portion of your purchase, and since they are only valid for a limited amount of time before they expire, I like to think of Kohl’s Cash as worth about half of its face value.  A $20 Kohl’s Cash certificate is, to me, worth about $10.  It’s a convenient way to conservatively estimate savings when Kohl’s Cash is offered.


If you return something that was paid for with Kohl’s Cash, you are given store credit for the purchase price.  If you then go to buy the exact same thing and pay with that same store credit, you’ll be charged sales tax.  That’s the bad part.  The good part is that the store credit doesn’t expire and you can apply discount coupons to the portion of the order paid for with that store credit.  Store credit is treated exactly like a gift card.

Where things get really weird is if you return something that was in an order that generated Kohl’s Cash.  For example, imagine buying a watch for $100 and earning $20 Kohl’s Cash.  Now imagine that you’re unhappy with the watch and want to return it.  If you don’t use the Kohl’s Cash before returning the watch, you get your money back and the Kohl’s Cash is understandably invalidated.  If you do use the Kohl’s Cash before returning the watch, though, they will deduct the Kohl’s Cash value from your refund.  So, if you buy something where there’s a high likely hood of a return, you might be better off not using the Kohl’s Cash.

Bottom Line

If you have a Kohl’s charge card, the frequent 30% off plus Kohl’s Cash sales are really a great way to save.  It’s important, though, to understand the limitations and strange behaviors of Kohl’s Cash.

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