In some ways Gift Cards have not been very well thought out. In particular, they are hard to distinguish from real credit cards, and this can cause problems for merchants. Well, it also causes problems with the governments efforts to fight against money laundering (link and link) because 1) it is not illegal under the current US […]
Archive for the ‘Fees & Breakage’ Category
Prepaid cards are essentially open-loop gift cards without the word “gift” on them and are often marketed as a viable alternative to a bank account. Wal-Mart recently announced that it will be paying employees through prepaid debit cards instead of direct deposit. Consumers Union decided to weigh in on the topic and has published an in-depth review […]
To get a better idea the value lifespan of an All-Access Visa gift card, one of the most highly reviled and complained about gift cards due to their very short no-fee period and their very high ($4.95 monthly fee), it is helpful to graph the value left on the card over time. A $25 gift […]
I came across this handy summary of prepaid debit and gift cards. The author makes a very valid point; even when you’ve managed to spend the last dime on your prepaid card, you may not want to get rid of it. In the case where you return something that was purchased using your prepaid card, it […]
I’ve seen plenty of estimates of how much of total gift card sales gets left on the table by consumers each year ($8-10 billion), but I’ve never seen someone give a number for the TOTAL in gift card value that sits unused. An article in Business Week (here) says that there is about $40 billion […]
How does Ticketmaster get around honoring an expired gift card even though California has a law that says gift cards can never expire? They call it a “discount card,” despite the fact that the card says “Gift Card” right on it. (story) We can undoubtedly expect more of these shenanigans as more gift card laws […]
US Bank recently announced that it is the number one issuer of Visa branded gift cards. An analysis of their gift card fees shows that they are even worse than everyone’s least favorite gift card, the All-Access gift card. The US Bank Visa gift card starts charging a $2.50 monthly fee ONLY six months after issuance, charges […]
Sounds good, doesn’t it? GiftCards.com recently announced, as a gesture to help people for whom every buck counts, a gift card that has no montly fee. Their normal gift cards come with plenty of fees, including a per-transaction fee, ATM fee, international use fee, and even a fee to change your PIN number. The new montly feeless […]
Tennessee is considering a bill that would allow consumers cash back for gift cards worth $10 or less. (story) Sadly, no talk of including open-loop cards.
You can now be the proud owner of a Capcom Street Fighter sponsored Visa debit card that sets a new low in the fees it charges, including: * $9.95 activation fee * $4.95 monthly fee * $0.25 per debit use * $1.50 per ATM withdrawal (not including whatever fee the ATM charges) * $10 to […]
February 22, 2009 by Advocate · Leave a Comment
Filed under: Fees & Breakage, Legal & Regulatory, Scams
Filed under: Fees & Breakage, Legal & Regulatory, Scams
This has to be the most blatant example of the government not “getting” gift cards and the ridiculous fees they charge. The governments in 30 states are essentially using reloadable gift cards issued by banks such as BofA, Chase, and US Bancorp to pay people their unemployment benefits. The problem is, the cards include all […]
More states are jumping on the bandwagon. Indiana has a bill (1529) before the State House that would ban fees and expiration dates. Like all other states, they specifically exclude open-loop gift cards. (article) For once I’d like to see a legislator state WHY they are excluding open-loop cards.
Westfield malls is HUGE, with 55 malls in the US and more outside of the US. They sell a lot of gift cards. Their gift cards happen to be American Express branded cards and can be used anywhere Amex cards can be used. As Amex/open-loop cards, they come with all the downsides that everyone complains […]
For a while I thought I was the only one talking about the fact that multi-store, aka open-loop or bank issued gift cards are exempt from most laws that limit expiration and fees on gift cards. Finally at least some articles are beginning to mention them.
As this article points out, merchant agreements with credit card processors specifically prohibit merchants to have minimum purchase amount requirements for credit card use. This applies to gift cards as well. If they say you need to meet the minimum purchase amount, tell them it is against their merchant agreement. If they still refuse, report them […]
Consumer reports says that 25% of gift cards go unused each year. A commonly accepted breakage value (the amount of gift card value that doesn’t get spent) is 10% of the total amount on gift cards sold each year. For these two numbers to make sense, the cards that go unused must be heavily weighted in […]
I recently ran across an article in the Washington Post from February of 2006. The article talks about how difficult it is to use up small amounts left on Visa and MasterCard Gift Cards. A couple of quotes from the article caught my eye: “Visa spokeswoman Rhonda Bentz said the company was unaware of the […]
September 11, 2008 by Advocate · Leave a Comment
Filed under: Fees & Breakage, Legal & Regulatory, Scams
Filed under: Fees & Breakage, Legal & Regulatory, Scams
Speaking of terminology, an article in today’s Wall Street Journal talks about “prepaid debit” cards. As debt among college students has risen to record levels in the last several years, colleges have gotten criticized for allowing credit card companies to aggressively promote credit cards to students on campus. In response, many colleges have limited credit card […]
I’ve seen stories about debit card holds at gas stations since the Spring. The problem is that at a gas station, where the pump authorizes payment before it knows how much gas you will pump, it typically does an authorization for $50 or $75 first and then when you are done, releases the hold and […]
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