Gift Card Purchases Using a Credit Card

TDMH · 2026-02-04T12:42:57+00:00

I purchased 2 x £50 gift cards for a well known online clothing company. When I searched for this company’s gift card at the top of the page was Giftcard .co.uk so went ahead and bought from them. When looking at my bank statement they had charged me a 3% fee. I complained and was told that it was because that were advancing me money. I had also purchased other gift cards from other companies directly and not been charged a fee. My point is that I believe it to be misleading by not informing the customer before the purchase that they would be liable to pay a fee on certain gift card transactions.

la531983 · 2026-02-04T13:01:37+00:00

You were buying from a company that SOLELY offers giftcards so their MCC code is likely to be different from a website that, for example, sells clothing but also offers gift cards for that store too.

TadleyBaggie · 2026-02-04T13:01:59+00:00

The gift card company have no idea what your bank will do with the transaction.

flaneurs_lobster · 2026-02-04T13:04:09+00:00

It's worse than that, you are probably paying interest on that £100 from the purchase date (unless you've already paid off the credit card).

Who do you think is misleading you, the gift card company or your credit card company?

Pretty much all credit cards will charge a fee + immediate interest for cash advances. The difference is that not all credit cards treat gift card purchases as cash advances.

Even more involved, some credit cards will charge for certain gift cards but not for others.

All credit (and debit) card purchases pass a "merchant category code" back to the issuer, the issuer uses this code to decide if it's a "cash advance" or not. Different card issuers may use different codes, different gift card sellers may use different codes, so there's no general rule.

Example (not real life)

Buy Argos £20 gift card in supermarket with weekly shop, pay with CC, no fee.

Buy Argos £20 gift card at giftcardsRus.co.uk with same CC, fee.

Simple solution, gift cash.

born_again · 2026-02-04T13:20:07+00:00

https://forums.moneysavingexpert.com/discussion/6653778/gift-card-purchases-using-a-credit-card

They will have in the T/C on your CC. You did read them?

What you have not realised is that you also lose a lot of card protection. No S75 due to debtor/creditor link broken. No chargeback, as you bought a gift card not a item…

MEM62 · 2026-02-04T13:49:47+00:00

Give cash instead. The recipient can spend cash anywhere and is not limited to just the outlets accepting that particular card. Also, cash does not become invalid when a retailer or gift card issuer goes out of business.