If you have a rewards credit card that allows you to earn points with every dollar you spend, you might want to find out how your purchases are classified when you spend your hard-earned money.
Most credit cards that pay out rewards have specific categories that help determine earning-spending ratios. For example, your particular credit card might allow you to earn 2% cash back when you shop at grocery stores, but only 1% at pharmacies. In this case, you may want to focus more on getting as many of your pharmacy-based purchases at a grocery store to help you earn more points.
That’s why it’s helpful to understand merchant category codes (MCCs) and how they impact your earnings when you use your points-based credit card to shop.
What Is A Merchant Category Code (MCC)?
Merchant category codes use a classification system to categorize credit card purchases using 4-digit codes. Merchants that accept credit card payments will be assigned a merchant category code based on their predominant business type, such as grocery, retail, restaurant, and so forth.
Credit card networks assign these codes to merchants accordingly. When you use your credit card at a specific retailer, the merchant category code will identify the type of merchant you made a purchase at.
Importance Of Knowing Merchant Category Codes
These codes are more relevant to consumers who use rewards-based credit cards that earn points with every dollar spent and help determine the number of points or cash back earned on each purchase.
It’s important to understand merchant categorizations when determining how and where to spend your money. This will help you earn the highest rewards, as your credit card may allow you to earn more points for specific purchases. For instance, you may have one credit card that earns more points when you shop at grocery stores or gas stations, and another that earns you more points when you spend your money on entertainment.
Knowing your merchant codes can help your dollar take you farther on earned points or cash back rewards when you shop with the right merchants.
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Merchant category codes are assigned to merchants rather than to the actual products you purchase. As such, it’s about where you shop, not what you buy that matters. It’s important for the retailer to have the appropriate merchant code no matter what they sell so you can earn your rewards when shopping in the corresponding category.
Classifying Merchant Category Codes
Here are a few examples of merchant codes and their associated categories:
| Category | Merchant Code |
| Groceries | 5411 |
| Gas/Service Stations | 5541 5542 |
| Restaurants | 5812 5813 5814 |
| Pharmacies | 5912 |
| Entertainment | 7941 7922 7996 7991 7929 7998 7832 7829 |
| Travel | 7523 4111 7524 4121 4784 |
| Hardware/Lawn & Garden Stores | 5251 5200 5261 5231 5718 5713 5714 |
| Hotels/Motels | 7011 3500-3828 |
Who Assigns The Merchant Category Codes?
Credit card networks establish merchant category codes, not individual banks or credit card issuers. Further, there may be some differences between codes among credit card issuers like Visa, Mastercard, or American Express, though the variations are typically minimal.
Benefits Of Knowing Merchant Category Codes In Canada
While certain merchants are easily classified, others are not as obvious. For example, Fortinos is clearly a grocery store and Esso is obviously a gas station.
But it may be more difficult to determine what category other merchants may fall under, like Walmart or Costco. After all, you can get groceries, furniture, electronics, and pharmacy items when you shop with these retailers.
The reason why you would want to know what category each retailer falls under comes down to the type of rewards credit card you have and what the earn rate is under different categories, like groceries, pharmacies, and gas. For example, you may not want to do your grocery shopping at Costco if your particular credit card issuer categorizes the merchant as a discount store. In this case, your dollars won’t take you as far in terms of earning rate.
On the other hand, you can use this to your advantage in other ways. For instance, if you earn more points at pharmacies, you can buy your milk and eggs at your local Shoppers Drug Mart and earn more points than you would at a grocery store. Likewise, if you earn more points at grocery stores, you can buy non-grocery items sold in these stores — such as cleaning supplies or household goods — to collect more points with the right merchant category code.
Best Credit Cards By Category
| Best Credit Cards For Groceries In Canada | Learn More |
| Best Credit Cards For Gas In Canada | Learn More |
| Best Cash Back Credit Cards In Canada | Learn More |
| Best Travel Credit Cards In Canada | Learn More |
| Best Hotel Rewards Credit Cards In Canada | Learn More |
How To Find A Merchant Category Code?
Merchant category codes for specific stores are difficult to find because credit card issuers do not make this information readily available. You likely won’t find these codes listed anywhere on your credit card statements. In order to find a merchant category code, you’ll need to get in touch with your credit card issuer to inquire.
Merchant Category Code FAQs
Is Costco considered a grocery store?
What is Walmart’s merchant category code?
What stores fall under the MCC 5411 list in Canada?
What merchant category do convenience stores fall under?
Final Thoughts
While you might not think twice about how different retailers are classified in terms of merchant category codes, you might want to get familiar with them based on the places you shop at. That way you can maximize your purchase to ensure you get the most cash back or points when you shop.
