The competition between an unprecedented reductive chlorination and the Pummerer reaction was studied and applied to the synthesis of benzofused oxygen heterocycles including 3-aminochromanes and in the intramolecular chlorination of activated aromatic rings. The use of (COCl)2 as a Pummerer activator showed substantial activity, producing α-chlorinated sulfides that can undergo Pummerer–Friedel–Crafts cyclization. If the aromatic ring has electron-donating groups in position three, then the reaction follows a different pathway, yielding the reductive chlorination products, where the chlorine atom comes from a sulfonium salt.