MasterCard and Discover have new requirements that merchants who accept those cars support some new capabilities that could have a very beneficial effect on open-loop gift card usability. Specifically:
Balance response transactions — For prepaid and gift cards, once the card has been used, the remaining account balance will be transmitted along with the authorization response. The remaining balance must be printed on the customer receipt, displayed on the Web page or point-of-sale terminal, or both.
Partial authorization transactions — When a customer’s transaction amount exceeds the balance available on their debit, prepaid or gift card, instead of declining the transaction, a partial authorization for the amount available to the customer will be returned. This will allow the customer to pay for the remaining amount with another form of payment. This is called a split-tender transaction.
Authorization reversals — An authorization reversal is a real-time transaction initiated when the customer decides that they do not want to proceed with the transaction, or if the merchant cannot complete the transaction for any reason. Authorization reversals free up the customer’s available balance on their debit, prepaid or gift card.
What this means is that:
- You will know the remaining balance on your gift card after you purchase something. I can only hope this eventually leads to all merchants being able to determine your balance before you purchase.
- Merchants must support split-tender transctions, which would allow you to use the last $5.11 on your MasterCard gift card with cash or another credit card to buy something that cost more than that.
- When you try to use your gift card to purchase something but it fails for some reason, funds won’t be held on your card for weeks.
Merchants have until June 30, 2011 to comply with these new rules. I would say it is a coin toss that after that time these things will actually be possible given the industry’s track record.