Why my Rakuten account was shut down (and then resurrected)

Shutdowns are the great bogeyman of the points and miles community. Most often associated with credit card issuers, a shutdown happens when a company decides that they don’t like you, and usually involves closing one or all of your accounts and then leaving you to spend some time thinking about what you’ve done.

There are multiple reasons that shutdowns happen. It could be that your activity looks like a money-laundering arms dealer, you figured out a unique chink in a bank’s anti-fun armor, or because you’re actually really, really naughty.

Regardless of the reason, they’re no fun, and the possibility of one is something that occupies quite a bit of rent-free space in the heads of many of us points enthusiasts.

Although banks are the most common (and feared) culprit, pretty much any sort of rewards program or financial entity can do it, including shopping portals..which was exactly what happened to me the other day when I discovered that I had been shut down by Rakuten.

What is Rakuten?

For those unfamiliar, Rakuten is a shopping portal that ranks near or at the top for most of us at Frequent Miler. Rakuten has been around forever, always has extremely competitive rates, and is probably the most reliable portal when it comes to correctly tracking your purchases and paying out the correct rate.

Perhaps the best aspect of Rakuten is the ability to choose to receive your portal rewards as either cashback or as Amex Membership Rewards Points. For example, a 3x offer can either be paid out as 3% cashback or as 3x Membership Rewards. We value Amex points at ~1.55 cents each, so it’s a no-brainer (for us) to choose those in lieu of cash. The rewards can really add up; all of us on the FM team have earned hundreds of thousands of Membership Rewards through Rakuten over the years, and I know a few folks who earn far more points through Rakuten than they do through Amex credit cards.

Nick’s scare

I’ve used Rakuten for years (before it was even known as Rakuten), and it’s been my go-to shopping portal for the majority of that time. Since I’ve started working for FM, my referral activity for Rakuten has picked up, because we’re able to share referral links in posts when we write about various offers (and folks kindly sign up using our links, thank you!).

A couple of months ago, Nick had a situation where he was suddenly unable to sign into his Rakuten account. Whenever something like that happens, we immediately fear the worst, so Nick sent a message to Rakuten and quickly got the following response:

In order to resolve your issue, I am transferring your email to a specialist in the appropriate department. They will contact you as soon as they have more information. Thank you for your patience.

The next day, he received an email from a “specialist” asking him if he wrote for a blog. He replied “yes,” and sent some examples of posts that we had published about Rakuten. Turns out, the risk management algorithm had gotten skittish about how many referrals he had been making and decided that he must be posting links on reddit and other forums (which is against Rakuten’s dos and don’ts). Once they found out that the referrals were from writing posts that accurately described Rakuten’s offers, his account was restored, and everything was kosher.

Why Rakuten decided that it didn’t like me

Fast forward to two weeks ago, and suddenly I found myself in the same situation as Nick, unable to log into my account. I sent a message to Rakuten and got the exact same reply about needing to refer me to a specialist, so I assumed it was the same situation and that my account would be quickly restored.

If only.

A couple of days went by with no response, so I replied to the first email, saying that I still couldn’t sign in. Within a couple of hours, I got a reply back telling me that I was still in the queue for a specialist. Great. But more days went by.

Finally, two weeks after my original request, I received an email, but with a very different reply than I was expecting:

Thank you for taking the time to write to us. We are sorry for any confusion regarding your account. Due to the number of ineligible orders in your account, our risk department has ended your membership in our program.

What? I was baffled.

My heart immediately sank. I had almost 90,000 points / $900 waiting in my account for my next payout, and now that was all gone.

Even more to the point, I was honestly confused. Too many ineligible orders? I will often click through a portal on my way to order something, even if I think it might not track, on the off-chance that there might be a payout on it. But the vast, vast majority of my Rakuten transactions track and are paid out.

So what the heck happened?

Fighting Back

When shutdowns occur, there’s no guaranteed remedy. Terms and conditions almost invariably state that your existence in the program is at the pleasure of the king (which is usually a computer). And if the king doesn’t like you, you’re toast. Regardless, it’s almost always worth at least trying to fight back.

I immediately wrote back and expressed my (very honest) confusion. I explained that I had been a Rakuten member for years without incident and that almost all of my orders had tracked appropriately. I suspected that, even though the rep had said ineligible orders were the reason, referrals might be the real cause. So, I mentioned that I might have more referrals than average, but it wasn’t because of posting referral links on forums, but rather in blog posts. I included a link to our Rakuten archives. Again, about 24 hours later, I received another short reply:

Thank you for your reply. Your account has been reported by Dell Technologies for ineligible order activity. Therefore, the account has been deactivated, as we are obligated to abide by the merchant’s reporting. 

What the Inspiron?!? I buy a lot of merchandise from Dell as it can be a heckuva deal if you stack Business Platinum credits, Amex / Chase offers, Dell Rewards, and shopping portals.

Dell is notorious for having a hair trigger on order cancellations, especially for new accounts. For whatever reason, I’ve never had an issue and can complete 30-50 orders per year without issue. More to the point, these are all legitimate orders of real products that I pay for and receive, so there’s no hanky-panky going on.

My account with Dell is in good standing, and I have confirmation and shipping emails for every order that I’ve made in the last two years. Because of that, I was very confident that I could prove that there was nothing untoward happening on my side.

So I replied, confidently stating that I could provide proof of the validity of any Dell order that had been reported as ineligible. The next day, this reply was waiting for me when I woke up:

To help us expedite this: Please send along the order confirmation page that includes an order number, order date, shipping & billing addresses and price break-down showing product total, shipping charges, tax and method of payment for your orders listed below:

Also, please provide the email address used to place this order, and make sure the email header is included with no information edited or excluded. As well as the shipping confirmation pages.

Please make sure the email header is included and that no information is edited or excluded. Please note, any edited information will lead to permanent deactivation of all associated accounts.

The reason for the shutdown

As I said before, I save confirmation and shipping emails for all of my Dell orders, so I quickly discovered what had happened. I had ordered three of the same laptop on the same day using separate orders (so that I could stack credits and use rewards). Dell confirmed those orders, but then cancelled them ten days later because they had oversold their stock. They sent an apology email for each one with a discount code to be used for a future order.

However, because the order was originally confirmed and so much time passed before the cancellation, Rakuten had awarded me the points. Dell then went back and told them (correctly) that these orders were no longer eligible for portal rewards…and Rakuten’s cybercops did NOT like it.

I forwarded all of the confirmation and apology/cancellation emails, and I explained what had happened. Surely, they couldn’t hold me responsible for good-faith orders that Dell had cancelled because of stock mismanagement? Here was Rakuten’s response:

Thank you for your inquiry. I apologize for the delay in my reply. We have asked the merchants who reported your account for ineligible order activity to adjust your account as needed in order to remove the flag on your account. Specifically you will see that the orders for the 3 orders have been removed from your account. You will also see 3 other adjustments on your account for orders XXXX and purchases XXXX and XXXX. You should be able to log in to your account once again. Please let me know if you have any trouble logging in.

Eureka! I was back. However, I was surprised that they had to remove three other orders in addition to the ones that I had been asked about. I had no idea what they were for, but I was never awarded points for two of them in the first place (and they weren’t from Dell). My assumption is that there’s some tipping point of “ineligible” orders within a given timeframe, and removing the last three took me below that. But I really have no idea.

Lessons Learned

In the midst of going through all this rigamarole, I poked around online and found several reddit and flyertalk threads where other folks were complaining about similar issues, all within the last few months. From the sounds of it, Rakuten updated its risk management algorithms earlier this year, and the new electronic sheriff in town is extremely concerned with what it considers to be ineligible or fraudulent orders…even penalizing some members for orders made by people that they have referred.

Now that the dust has settled, here are a few things I took away from the whole experience:

• Save order confirmations and communication as often as I can. If I hadn’t been able to produce them in this instance, my account would still be shut down, and I’d be $900 poorer. I was lucky enough to find a rep who actually took a second to listen and look at my account. Even then, had I not been able to send proof, it wouldn’t have mattered.
• If I’m going to take a shot in the dark at an order tracking, I’m not doing it on Rakuten. As I mentioned, I almost always click through portals when making award reservations, buying gift cards, or making just about any purchase, just in case it tracks. I never even considered that it might be a problem. Now, given the stories that I’m hearing from other folks and this situation, I’m choosing other portals to do that with. Not Rakuten.
• Always, always fight back. I’ve had three unexpected shutdowns this year, including Rakuten. In each case, I felt like it was an error on the company’s fault, but I was told that there was very little chance of recovering my account. Despite that, I still tried…and each account was eventually restored. If I hadn’t taken the swing, those accounts would all be toast.

It would be nice if Rakuten communicated with members about this more clearly, and/or gave warnings before inactivating accounts and clawing back cash or points, but that’s probably not in the cards anytime soon. That said, I do appreciate that I was at least able to find a reasonable human to plead my case to and that Rakuten eventually gave me my account (and my points) back. From the sounds of it, there are plenty of folks out there who haven’t been so lucky.

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