Questions about Square Gift Cards Repricing (1/31/24)

[skateman81]

The title of this thread has been edited by a Square Moderator from the original: "Gift Card Load fees?!"

So let me get this straight.  Square now wants to charge a 2.5% fee for loading gift cards, on top of the card processing fee if they use a card to pay with it?  So if someone buys one of my cards and puts $50 on it, pays with a credit/debit card, I have to $5 in fees??  I lose $5 plus the cost of the card.  Is this correct?  If it is, then I might just have to leave square.  I set up a reloadable loyalty card for my customers to pay with to get discounts and now new fee is a big bag over the head and punch in the face to my business.  I thought you were supposed to be helping businesses.  Not screwing them out of even more money!

 

[#2]

Hi @Lovewell , it is true that the 2.5% load fee will apply to both physical and eGift Cards, as they have much of the same functionality and benefits like driving overspend on the balance, customer acquisition, integrated reporting, etc.  

I just wanted to try and clarify one thing. In the example you gave of selling small denomination gift cards at Christmas as gifts for teachers, you mentioned that the sales don't count until the gift card is used, however you are deposited the funds that you received from when the card was originally loaded/bought right away (according to your deposit schedule). Even if the teachers never come back to redeem the cards, you did still make a profit from the sale of the card. 

[#3]

Hi again @dsachs - Looking at your Seller Community profile, I can see you have posted a total of 6 times. All 6 of your posts are still linked to this thread.

The 2.5% gift card load fee will not apply to refunds or store credit issued to Square Gift Cards.

[#4]

Regarding passing the fees onto the customer, every country and state has their own laws on how to enact surcharges. You must make sure you understand local laws before ever passing on any type of transaction or processing fee to a customer. 

[#5]

Hi there @skateman81 and @Jenthom08 - Thank you for sharing your feedback. I can certainly provide some more information to help explain this recent change.

After March 1, 2024, anytime you load a gift card or an eGift card in-store or a customer buys an eGift card online through your eGift card order site, you will be charged an additional 2.5% gift card load fee based on the total amount loaded on the card. For example, if you sell a $100 gift card to a customer, you pay a $2.50 (2.5%) load fee on the transaction plus any other standard Square processing fees (like credit card processing fees). This load fee will be charged for gift cards loaded through any payment method, including credit cards, cash, or other tender payment types.

The load fee will be subtracted from your daily sales (Square balance), similar to how Square credit card processing fees are usually deducted. If your daily sales don’t cover the total fee, the remaining balance will be debited from your linked bank account linked to your Square account.

Square Gift Cards have long been free to use (with the exception of regular Square processing fees and the cost to order physical gift cards). While we have been happy to offer this pricing for quite awhile, as we continue to build more advanced features, we need to make this update so we can continue investing in the product to continue helping sellers like you. 

We believe that by lowering the cost of physical gift cards, it will make it easier for businesses like yours to continue to offer gift cards to your customers. The 2.5% per load fee ensures that you can sell as many or as few gift cards as your customers need without having to pay expensive monthly saas fees to offer gift cards like some other POS systems charge. 

We completely understand that this price change may affect your operations and overall business costs. This is not something we take lightly. As we continue to build more advanced features, we need to make this update so we can continue investing in the product to continue helping sellers like you. 

You can also review this Suppot Article for more details.

I hope this information is helpful but please do let me know if you have any additional questions.

[_Violet · Accepted solution]

Hi there @skateman81 and @Jenthom08 - Thank you for sharing your feedback. I can certainly provide some more information to help explain this recent change.

After March 1, 2024, anytime you load a gift card or an eGift card in-store or a customer buys an eGift card online through your eGift card order site, you will be charged an additional 2.5% gift card load fee based on the total amount loaded on the card. For example, if you sell a $100 gift card to a customer, you pay a $2.50 (2.5%) load fee on the transaction plus any other standard Square processing fees (like credit card processing fees). This load fee will be charged for gift cards loaded through any payment method, including credit cards, cash, or other tender payment types.

The load fee will be subtracted from your daily sales (Square balance), similar to how Square credit card processing fees are usually deducted. If your daily sales don’t cover the total fee, the remaining balance will be debited from your linked bank account linked to your Square account.

Square Gift Cards have long been free to use (with the exception of regular Square processing fees and the cost to order physical gift cards). While we have been happy to offer this pricing for quite awhile, as we continue to build more advanced features, we need to make this update so we can continue investing in the product to continue helping sellers like you. 

We believe that by lowering the cost of physical gift cards, it will make it easier for businesses like yours to continue to offer gift cards to your customers. The 2.5% per load fee ensures that you can sell as many or as few gift cards as your customers need without having to pay expensive monthly saas fees to offer gift cards like some other POS systems charge. 

We completely understand that this price change may affect your operations and overall business costs. This is not something we take lightly. As we continue to build more advanced features, we need to make this update so we can continue investing in the product to continue helping sellers like you. 

You can also review this Suppot Article for more details.

I hope this information is helpful but please do let me know if you have any additional questions.

[_Violet · Accepted solution]

Regarding passing the fees onto the customer, every country and state has their own laws on how to enact surcharges. You must make sure you understand local laws before ever passing on any type of transaction or processing fee to a customer. 

[dsachs]

@_Violet my question keeps getting deleted so I will keep asking I suppose. Is there a point to which Square will reconsider this decision that hurts the very businesses that support it? Is there some other option we can pursue rather than a mass migration to another company? 

Also, won’t square end up loosing money when we all migrate to either other gift card services or paper gift certificates ran as a normal transaction? Seems like the power is truly with the people on this one?

[MADBros]

I think we have to do some hard digging most of these companies pretty much do the same thing. Square had something going for it when it started as it opened the door for smaller businesses to have everything in one place for ease of use. I think that is over. "Over" because other companies offer similar packages but all have pros and cons. 

I do think we have the power and always have had it. I know I will not be losing money for this and will take steps to cut out gift card use in the future because of this. I already lose too much money from everything else for there to be another hand (cost) in my cookie jar. 

Gift Cards were just another convenience for my customers and my business as square made them easy to track and see. But honestly, certificates can be a nice plastic card of a piece of paper. 

[_Violet]

Hi there, @dsachs - I have not removed any posts from this thread. I can see your post from about 40 mins ago here.

I have escalated this thread to the Gift Cards team so they can review the feedback from you all. If there happens to be any future changes to gift card fees, beyond what we have already communicated, we will be sure to share that information with Sellers. As of Match 1, 2024, these changes will take effect.

[CColotti]

The fact is this is straight up a money grab

• There is NO way it costs 2.5% of every load to insert a DB table entry.  This fee percentage is literally insane considering the Credit Card processing itself is 2.6%.  Your saying it costs nearly as much to load a DB entry as it is to process a card, meet PCI compliance, store data, etc?  I call BS it's completely laughable it's the same cost.
• There is NO reason physical and digital should share the same fee under the justification that physical card prices went down (it has zero bearing on the digital ones) hence the money grab
• Maybe a flat fee would be in order since the DB entry cost is the same and should not be weighted on the price of the card (also meets the money grab comment)
• Merchants paying for subscriptions vs free users has not been addressed at all with how this has been presented.
• Merchants load GC's at a 100% discount so they can be used for a promotion should NOT have any load fee if the transaction is $0 (that has not been addressed here). is on the VALUE of the card or the transaction amount b/c we should be able to preload and discount for our own use as a promotional gift and not be hit with a load fee.

There are so many other scenarios here that the GC team has overlooked in the PRD when it was written.  I spent 25 years in IT and software and everything about this leads me back to a money grab plain and simple.  There is no way Square was losing so much money on the process of "loading" a gift card that this in any way has a valid justification for the change. 

This was a complete mistake to roll this out as it is now, it needs to be pulled back, merchants need to be heard, and the team behind this all need a slap in the face, becuase that's what they gave us.

[alexandriak]

Square this is a terrible business move. I had no problem paying for the gift cards, I just got generic and had custom labels made for the backs. I reused the gift cards as often as possible. In doing this you're now charging me for reusing the same gift card multiple times. This is complete and total crap. You need to rethink this, because this might just be the thing that costs you a lot of customers. 

Personally I will just go back to using paper gift certificates, they're cheaper anyway cost wise, especially now with this load fee. 

As someone else in this thread mentioned you're starting to have so many small fees that businesses are going to have to start considering other options. It's one thing after another. 

[CColotti]

This wasn't a business move it was a 5:00 on a Friday idea to grab more money without any real thought put into the process, the use case, the ramifications, the various level of users (paid, free, etc).  This was a lazy answer to some other problem with Block Inc. 's revenue issues and layoffs.

[alexandriak]

I'll normally go to bat for Square but this time I just can't do it. I already know when I walk into my favorite market stand tomorrow what they're going to say. They're going to start looking elsewhere and they spend a lot of money on custom printed cards. 

[CColotti]

I literally just ordered my first round of them on Jan 5th they get delivered tomorrow. So yeah. What now.  Pre load them?  But then how do I sell them?   I can preload them with a 100% discount now but then just create a new item to sell them preloaded?  Can’t scan them again. It’s such a mess and I just paid the higher price for the ones I bought.  Guess I need to sell them quickly to places to use as a giveaway  

it’s also taken nearly 4 weeks for them to be printed and delivered all while this was being dreamt up behind the scenes. 

[alexandriak]

You would ring them out as an item. Create an item called gift card and you could even edit it to include the last 4 of the card number (I would personally) and then finish the sale as usual. 

I'd say contact ecards but I doubt they're going to do anything at this point in the process.

[CColotti]

You mean after it’s been preloaded and processed as a $0 discounted transaction yes?  Still when they come back to reload it all bets are off after March 1st

also pointing note my square rep had NO idea this was coming. He was blind sided by over 200 text messages starting with mine.  He’s not happy Block let him get smacked by his customers on this with no warning. 

keeps brining me back to this was not well thought out. You don’t do that to your own field people trying to sell and keep customers happy. 

[alexandriak]

I did have the same thought about part of their services being down that affects businesses while most of us are finding out about this. I've never had this many issues with parts of square being down like this this often.

[LSPA]

@_Violet

This is nuts!  Our operating margins are 10%.  After paying Square... we will end up with 4.5%.  We can't sustain Square's gift card program and stay afloat.  

Please offer the opt out option... we are okay with the hight upfront physical gift card fees.   Business owners that are already enrolled in high upfront gift card fees should be exempted or grandfathered. 

This "new" pricing should only apply to new gift card subscribers.  They new business owners can make a decision if this pricing structure is right for their business. 

We enrolled in this program in 2018.  We agreed to the pricing and purchased thousands of gift cards based on the Square promise.  We will face extreme hardship due to this arbritary pricing change.  

The new pricing may be good for some businesses, but we should be given a choice -- instead of arbitarily changing rules after 6 years!

[CColotti]

They seem to forget their user base is small business not Walmart.  This approach is not helping small business succeed it’s helping to kill it. 

[DancingBearChoc]

We are very disappointed to receive word that yet another fee will be charged, this hits our bottom line and creates a situation that we will have to evaluate if it is worth moving forward with Square, your fees are getting to be outrageous. 

[alexandriak]

WAIT A **bleep** SECOND. New thought

So if we're going to buy into the whole well we've made the cards cheaper to purchase so we're charging this load fee, what about those of us who bought the cards at the higher prices? We paid the higher prices AND you're going to charge us the load fee?

If that's the plan wait until more people have this same thought and think of the reaction then. What Square should do is get all the card numbers from those of us who have cards and exclude them from the load fees. This is a decision that needs to be made now so anyone who ordered cards prior to march and may be waiting for them to arrive later this month have time to get Square the card info, or Square has time to get the info from ecards.

[dsachs]

I think you’re confusing Sqaure with a company who actually cares about the people who use it. 

[CColotti]

I’m already in that boat. I ordered 125 cards on Jan 5th that finally get delivered tomorrow.  I’ve been saying it in multiple replies.  This was NOT well thought out as the use cases and impacts were not fully considered. 

[alexandriak]

Email and ask for a price adjustment

[CColotti]

You really think eCard Systems will adjust after the fact?  I doubt it but I'll send it and post the response..

[CColotti]

From eCard Systems

"Unfortunately, we are not able to refund the difference because there is a 7 day policy from when you ordered the gift cards"

so...NOPE!!

[alexandriak]

well it was worth a shot