Credit Cards - Fees on Gift Cards

CliveOfIndia

WillPS said:

There's also reports of bureau de changes having separate payment terminals for some customers; M&S Bank credit card customers used to be able to use M&S bureaus and have it go through as a purchase for example.

That's correct - or certainly it was when I used it a couple of years ago.  Must admit I don't know if they use a physically different piece of hardware, or whether it's just some sort of flag on the account (I ordered and paid for mine online).  But yes, it's kind of a "perk/special offer" whereby if you use your M&S card to buy currency from M&S, you don't get charged a fee.

I've heard of similar problems at casinos (not relevant to the UK since it's illegal to use a credit card for gambling, but if you use your card in Las Vegas or somewhere).  If you buy gambling chips then it's classed as cash - perfectly reasonably.  But if the casino has a restaurant and you pay for your food using your card, sometimes it'll be classed as cash if they only use a single MCC, but some places have a separate MCC for the restaurant side of the business.

flaneurs_lobster

CliveOfIndia said:

gbhxu said:

 Some cards even start charging you if don't use them for a time

Have you got an example of a card that does that?  It's not something I've ever come across.  Certainly most cards will close the account if it has a zero balance and hasn't been used for a couple of years, but I'm not aware of any that start imposing a charge.

The only scenario I can think of is perhaps one of the cards that does charge an annual fee but gives you the first year free, something like that.  Even then, I'm not sure if there are actually any cards that do that, I'm only guessing.

Could @gbhxu please expand on their comment.

I thought they were addressing charges on GIFT cards, @CliveOfIndia thinks charges on CREDIT cards.

Nasqueron

CliveOfIndia said:

gbhxu said:

Some cards even start charging you if don't use them for a time

Have you got an example of a card that does that?  It's not something I've ever come across.  Certainly most cards will close the account if it has a zero balance and hasn't been used for a couple of years, but I'm not aware of any that start imposing a charge.

The only scenario I can think of is perhaps one of the cards that does charge an annual fee but gives you the first year free, something like that.  Even then, I'm not sure if there are actually any cards that do that, I'm only guessing.

We had one from work, I think it was the One4all card - after 18 months they start charging a 90p monthly fee on the card which then runs the card down to 0 if you don't use it

Nasqueron

Phil65 said:

Nasqueron said:

I have seen people comment they have been able to buy cards via supermarket shopping, running them all together so it treats them as a shop, not the card.

Be mindful of gift cards though, they often expire or end up with weird amounts left on them that goes to waste, if giving a gift card, you might as well give cash directly as it's more flexible 

Not always possible.  Businesses are allowed to provide trivial benefits to staff ex tax which can be gift cards but cannot be cash.

I think I got the impression from somewhere you were buying them as birthday presents, no idea why!

We always got taxed on the gift cards we were issued from work

DullGreyGuy

WillPS said:

DullGreyGuy said:

la531983 said:

Nasqueron said:

I have seen people comment they have been able to buy cards via supermarket shopping, running them all together so it treats them as a shop, not the card.

Be mindful of gift cards though, they often expire or end up with weird amounts left on them that goes to waste, if giving a gift card, you might as well give cash directly as it's more flexible 

Even if you went into Asda just to buy a shop gift card, the till would just process it as it would 50 cans of baked beans. Doesn't have to be "ran in" with other things.

In practice I'm sure you're right but in principle a POS could be setup to run the transaction through a merchant ID based on a logic tree but as only 1 merchantID can be used for a single transaction if there is a majority of groceries then it'll be run through on the grocery ID 

I've never seen any evidence of supermarket till MCCs being dynamic. Any tills/PDQs for that. I'm not convinced it'd be a practical solution nor why the supermarkets would want to engage in it?

I have seen evidence of separate hardware for separate MCCs - the most obvious example being the tills in supermarket petrol stations (which use a different MCC from the ones in the supermarket). There's also reports of bureau de changes having separate payment terminals for some customers; M&S Bank credit card customers used to be able to use M&S bureaus and have it go through as a purchase for example.

Hence saying in practice its likely fine, it's just in principle they could do otherwise. 

Why would they want to engage it? Why do most places that have an FX Bureau use a different MMC for that -v- groceries, clothing, travel or whatever else it is they sell? You'd have thought someone could do fairly nicely out of being able to offer FX on cards without fees by running it through their normal merchant account. Presumably there is something in it for the merchant to split them 

Phil65

Nasqueron said:

Phil65 said:

Nasqueron said:

I have seen people comment they have been able to buy cards via supermarket shopping, running them all together so it treats them as a shop, not the card.

Be mindful of gift cards though, they often expire or end up with weird amounts left on them that goes to waste, if giving a gift card, you might as well give cash directly as it's more flexible 

Not always possible.  Businesses are allowed to provide trivial benefits to staff ex tax which can be gift cards but cannot be cash.

I think I got the impression from somewhere you were buying them as birthday presents, no idea why!

We always got taxed on the gift cards we were issued from work

A little OT but...

They are Easter gifts to the kids from my closed company through me - you are allowed £300 per year of such gifts providing they do not exceed £50 each - Products and gift cards are included, cash is not.

Any company can provide 'Trivial Benefit' gifts to employees subject to certain rules - specifically it cannot be payment for work but can be for a birthday or special occasion.  Providing they qualify then employees DO NOT pay income tax on their value. 

callum9999

DullGreyGuy said:

WillPS said:

DullGreyGuy said:

la531983 said:

Nasqueron said:

I have seen people comment they have been able to buy cards via supermarket shopping, running them all together so it treats them as a shop, not the card.

Be mindful of gift cards though, they often expire or end up with weird amounts left on them that goes to waste, if giving a gift card, you might as well give cash directly as it's more flexible 

Even if you went into Asda just to buy a shop gift card, the till would just process it as it would 50 cans of baked beans. Doesn't have to be "ran in" with other things.

In practice I'm sure you're right but in principle a POS could be setup to run the transaction through a merchant ID based on a logic tree but as only 1 merchantID can be used for a single transaction if there is a majority of groceries then it'll be run through on the grocery ID 

I've never seen any evidence of supermarket till MCCs being dynamic. Any tills/PDQs for that. I'm not convinced it'd be a practical solution nor why the supermarkets would want to engage in it?

I have seen evidence of separate hardware for separate MCCs - the most obvious example being the tills in supermarket petrol stations (which use a different MCC from the ones in the supermarket). There's also reports of bureau de changes having separate payment terminals for some customers; M&S Bank credit card customers used to be able to use M&S bureaus and have it go through as a purchase for example.

Hence saying in practice its likely fine, it's just in principle they could do otherwise. 

Why would they want to engage it? Why do most places that have an FX Bureau use a different MMC for that -v- groceries, clothing, travel or whatever else it is they sell? You'd have thought someone could do fairly nicely out of being able to offer FX on cards without fees by running it through their normal merchant account. Presumably there is something in it for the merchant to split them 

Because their Bureau de Change counter is generally (always?) a separate entity to the rest of the supermarket (i.e. Sainsbury's is run by "Sainsburys Bank", Tesco's by "Travelex" etc). Even if it's not, it will be on its own dedicated system not used for groceries etc, so presumably their payment provider wouldn't be too happy with it having a terminal that classifies FX sales as a grocery purchase. 

While I don't doubt you're technically correct, bringing up the possibility of a supermarket checkout being set up to dynamically change the MCC used based on the products being purchased is incredibly farfetched! 

DullGreyGuy

callum9999 said:

DullGreyGuy said:

WillPS said:

DullGreyGuy said:

la531983 said:

Nasqueron said:

I have seen people comment they have been able to buy cards via supermarket shopping, running them all together so it treats them as a shop, not the card.

Be mindful of gift cards though, they often expire or end up with weird amounts left on them that goes to waste, if giving a gift card, you might as well give cash directly as it's more flexible 

Even if you went into Asda just to buy a shop gift card, the till would just process it as it would 50 cans of baked beans. Doesn't have to be "ran in" with other things.

In practice I'm sure you're right but in principle a POS could be setup to run the transaction through a merchant ID based on a logic tree but as only 1 merchantID can be used for a single transaction if there is a majority of groceries then it'll be run through on the grocery ID 

I've never seen any evidence of supermarket till MCCs being dynamic. Any tills/PDQs for that. I'm not convinced it'd be a practical solution nor why the supermarkets would want to engage in it?

I have seen evidence of separate hardware for separate MCCs - the most obvious example being the tills in supermarket petrol stations (which use a different MCC from the ones in the supermarket). There's also reports of bureau de changes having separate payment terminals for some customers; M&S Bank credit card customers used to be able to use M&S bureaus and have it go through as a purchase for example.

Hence saying in practice its likely fine, it's just in principle they could do otherwise. 

Why would they want to engage it? Why do most places that have an FX Bureau use a different MMC for that -v- groceries, clothing, travel or whatever else it is they sell? You'd have thought someone could do fairly nicely out of being able to offer FX on cards without fees by running it through their normal merchant account. Presumably there is something in it for the merchant to split them 

Because their Bureau de Change counter is generally (always?) a separate entity to the rest of the supermarket (i.e. Sainsbury's is run by "Sainsburys Bank", Tesco's by "Travelex" etc). Even if it's not, it will be on its own dedicated system not used for groceries etc, so presumably their payment provider wouldn't be too happy with it having a terminal that classifies FX sales as a grocery purchase. 

While I don't doubt you're technically correct, bringing up the possibility of a supermarket checkout being set up to dynamically change the MCC used based on the products being purchased is incredibly farfetched! 

It wouldnt change the MCC, it would change the merchant ID, which may or may not have the same MCC. As previously stated one transaction is one merchant ID so one MCC. We have this setup for market stall as the Mrs sells her own and an associates goods. The first scanned item sets whose account it used but if someone wants to buy stuff from both then it has to go as two transactions. If we can manage it I would imagine others can manage it too if they wanted to. 

Different entity could be a reason, but then Sainsburys bank also sells insurance and payments to them dont count as a cash like transaction so even within the same entity they clearly have more than one merchantID. 

A better example is probably travel agents who often will sell holidays, insurance and FX all in store, certainly Hays dont use a different legal entity but do use a different merchant account for FX

bozo007

Caffe Nero cards are issued by Cashstar and if you go to the Caffe Nero website, the e-gift card link redirects you to the Cashstar site. It is the same for electronic cards from John Lewis or Sainsburys when purchased on the retailer web site - they are all actually issued by third parties which are explicitly identified as gift card suppliers or, in other words, retailers who only sell cash equivalent products.

piker57

flaneurs_lobster said:

FWIW I'm using gift cards via Airtime (4% cashback) for my supermarket shops (Tesco/Waitrose/M&S) via a Santander Edge CC (2%) cashback. 

No fees, reported on my Santander app as "Purchase - Domestic".

ETA : Cafe Nero gift cards available.

I'd be grateful if you could advise which retailer you're obtaining your gift cards from via the Airtime App, as I was interested by your post, but I've not been able to obviously see where I can purchase gift cards as you're doing.

TIA