Reader Phyllis asks: My brother gave me a mastercard debit card for 50.00. His wife paid the 4.95 activation fee upfront. However, when i went to use it at a restaurant, they said only 40.00 could be gotten through. I have tried numerous times to redeem the remaining 10.00 to no avail. What can be […]
Archive for the ‘Fees & Breakage’ Category
We’ve reported on this a number of times before, and it is time to say it again: Non-gift prepaid debit cards are not covered by the fee limitations imposed on gift cards by the Credit Card Act of 2009, and issuers are free to load up as many fees as they wish, and many do. […]
Prepaid card issues have been pushing non-gift prepaid card since the Federal Reserve finalized gift card rules for the Credit Card Act of 2009 and this recent news blurb (Wall Street Journal Overheard, 3/8/11) perfectly demonstrates the fee traps that exist more than ever in non-gift prepaid cards. As a reminder, the Credit Card Act […]
The Wall Street Journal points out in an article today (Banks Pin Revenue Hopes on Prepaid Cards) why prepaid (non-gift) cards are a bad idea for consumers. Prepaid cards carry the same interchange rates as debit cards, typically 0.75% to 1.25% of each transaction. So if banks lose some of the debit-card fees, they hope […]
One of the biggest problems with open-loop gift and prepaid cards is the ability to use them all up, or, in some cases, use them at all, as gift and prepaid open-loop cards can be very difficult to use online. So, if course it catches our attention when there is mention of making these cards […]
With mail-in rebates, the odds are against you from the start. My own experience is that I only get an actual response to a mail-in rebate about half the time, even if I have done everything right. Then rebates started to appear as Visa/MasterCard cards, with none of the protections of most state laws or […]
Even though vendors have until January to comply with the new packaging requirements for open-loop gift cards, they are required to follow some of the new rules, like no expiration before 5 years and no fees until after 12 month starting August 22nd. And like clockwork, the announcements for new and friendlier open-loop gift cards […]
A recent LA Times consumer advocate column states that a customer was upset when he found out that Target charged him a $4 activation fee. When I tried to verify this by going through the purchasing process with Target online, I was not charged an activation fee, but only a $1.95 shipping and handling fee, […]
I just came across this story on Consumerist.com about the Walmart money card, which, by all appearances is a normal Visa prepaid gift/debit card. The biggest problem with the card is its onerous activation scheme, which seems almost designed to prevent people from successfully activating the card, thus allowing Walmart to keep the money. You […]
Holy cow! According to this article by the Australian Herald Sun 30% of the $1.2 billion Australians spend on gift cards this year will go unspent. The main reason seems to be that Australian law doesn’t restrict expiration at all and my gift cards expire after only 12 months. Another difference between Australia and the […]
It is always interesting to compare the perspective of industry trade groups with those of consumers, consumer advocates, and legislators. Take for instance this article, which talks about the new gift card rules and their effect on the prepaid card industry. The article quotes the Network Branded Prepaid Card Association. By the NBPCA‘s estimate, more […]
A bit of a black eye for Amex and Travelocity on this one. A class action lawsuit accuses them of colluding to charge more for trips when American Express gift cards are used to pay for them than they would otherwise. Named plaintiff Morris Wilner said he received a $200 American Express prepaid gift car […]
Colorado Senate bill 10-155, awaiting signature by the governor, would do away with all gift card fees of any kind. Alas, it does not apply to what they call “general purpose” cards, or open-loop gift cards. If signed, the law would take effect Aug 11.
I’ve made no attempt to hide my prejudice in favor of American Express gift cards lately as they have shown some extraordinary customer service and were the first to do away with monthly fees, but this agreement with National Gift Card to market a corporate volume rewards card seems like s step in the wrong […]
Mail-in rebates are what gift cards wish they were. Let me explain. Anyone who has tried to get a mail in rebate knows that the odds are against you. In fact, only somewhere between 20% and 40% of mail-in rebates are ever redeemed. Now, given that many people don’t bother with the mail-in rebate, that […]
I’m not sure the history of the laws around gift card fees in Hawaii, but, in a move that seems contrary to the trends in legislation both at the State and Federal levels, Hawaii’s legislature voted to approve the charging of fees, up to 10% of the gift cards face value with a maximum of […]
The process of adapting to limits on fees has begun, such as the Valley View Mall’s gift cards, which no longer have expiration related fees, but now cost more when you purchase them. Another interesting fact about this particular mall’s gift cards is that while the previous ones were American Express branded, they could only […]
Holy cow! This article claims that 33% of Australian gift card go unredeemed. While that figure is for the number of gift cards sold, apparently it represents the value that goes unredeemed as well. What is curious though is that the article (entitled Profiting from Expired Gift Cards) is for merchants and touts the benefits […]
Came across an interesting restriction while reading the terms & conditions for the US Bank Visa gift card: “Resale of Gift Cards is strictly prohibited.” Wow, that’s quite a restriction. But the US Bank gift card is unattractive for their many fees, most of which will presumably change after the gift card rules from the […]
A bill was introduced into the PEI legislature recently is similar to the new US Federal gift card laws under the credit card reform act of 2009, namely it limits expiration dates and severely limits fees.
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