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. 

[brick]

This is the best response so far - nicely done.  I was raging too much to be as articulate, so thank you. 

Are you listening Square??

Someone in charge over there needs to sit back down, take a deep breathe, and take a moment to reflect on how absolutely absurd this policy is - and then reverse it immediately. 

For me, the cost in time and money to leave Square will be significant, but I also know that this will continue. They count on these "sticky" features that get embedded into our business model.  Every time I want to do something with Square there's now a Subscription Plan attached to it.  It started with Marketing, then Loyalty, then Messaging, and now this.  Next it will be a charge for the size of your Items catalogue, or taking Cash, or depositing your daily receipts, or running reports, or downloading your data.  Just wait... it's coming.  I'd rather quit Square now when I can do it on my terms and protest this ridiculous idea. 

[Lovewell]

@LSPA this is extremely well said. That’s all I can say. 

[majpepper]

Yeah, we’ve been using Square for ten years. I’ve been fairly happy with their all in one solution for most of our needs. I’ve been willing to overlook all the idiosyncrasies and not-quite-the-solution I needed but good enough, because it worked, it was integrated, and the fee structure was transparent.

This is patently a cash grab. If this decision is not reversed, we will be dropping Square in favor of a new provider within 6 months.

[brick]

100%

[F1etch]

a lot of people in eluding myself charge the client the loading fee. I already charge the client for the credit card fee. No $ out of your pocket.  My clients to budge,  every business charges a fee.

[CColotti]

Not every business charges a fee.  I have and will never use surcharges and in fact Square actually currently has no compliant way to do surcharging properly since there are rules around it to be compliant (like you can't surcharge on a debit card) but that's a completely different bag of worms discussion.  It's in their documentation that you specifically can't use the service charge fields to add a surcharge.  Also in TN the law prohibits charging any extra fees on Gift Certificates/Cards specifically.  

Even yesterday I got a reply back from VISA on a merchant I personally reported that was charging a 3.99% "Convience Fee" (for the record also using the wrong terminology which is a big deal convience fee and surcharge are not the same thing by the law) but there is no way they are paying 4% on processing fees, You also can't legally surcharge more than you are paying in fees....it can't be a profit center.  You have to have it posted on the entrance to your building before a customer can even order, and Like I said a completely different bag of worms.  Build the costs into your selling price and if you want then do a cash discount....no compliance issue with that.

there are so many articles on how surcharging is a bad practice and there are better ways.  DO you surcharge for your power, gas, phone, and internet services?  No it's part of your cost of doing business and you're selling prices should cover it.  CC processing is no different.  It's a service just like power or internet you can not otheriwse provide yourself.

End of the day on adding fees specifically to gift cards for this new loading fee.....know your local laws.  Being I am in TN....it's 100% not legal to do (passing on the loading fee specifically)

We are all merchants, but we are also customers, and I like to know what is and is not allowed and yes I do call out other merchants on bad practices.  Now imagine if every other consumer started actually doing their research, and reported violations what then it will cost you in legal fees and fines.  Don't assume every customer isn't that smart..

[dsachs]

I wonder how many gift card fees it would take to get a functioning system? Maybe @_Violet could pass along the current fees don’t give us a reliable product so forgive sellers if we get upset when you impose more?

[brick]

Unbelievable... and yet, it's not.  This is SO TYPICAL. You can't even keep the lights on and yet you're gouging us on gift cards. 

[CColotti]

wow I just ran a saw for $200 in GC's and I can't even see it in the transactions...WTH?  Another one for $250 is showing I did after but the app said it processed, so how am I to know if it charged them or what?  dear lord this is not good.  

[Candlestore]

@CColotti ;

Yellow Banner when you log in to the Square Forum shows Square is having issues.

To make hard copies of receipts you may want to read my reply in this thread:

https://www.sellercommunity.com/t5/Square-for-Retail/Service-Disruption-2-6-2024/td-p/708570 

At least this way you have proof that the transaction did go through according to Square.  Just make sure you are ONLINE and NOT in OFFLINE mode, which some sellers are being forced into.

[CColotti]

yeah these were done on my iPhone tap to pay so no real way to print a receipt...they eventually showed up nd I suspect it kicked into offline mode to hold the transaction.  I am fine with offline mode as long as THEIR service is back within 24 hours...the phone is always "online" but it seems like it used an offline tap to pay and eventually sent it up.  Maybe b/c it was a phone not a register, and online/offline really is hard to control unless you pull the network cable from a register.  On a phone it's pretty much impossible to control.

Still as we've said if you're going to charge more fees....keep the system up.

[CColotti]

"Our systems are beginning to recover. Please continue to stay logged into your account and follow any instructions in your Point of Sale banner. We appreciate your time and will continue to post updates."

So then what was the RCA (Root Cause Analysis)?  Will we ever know?

[CColotti]

The real Irony?   have outages notifications turned on to go to 2-3 email addresses.....never even got on but I guess when EVERYTHING is down you can't even sent the notifications....

[CColotti]

That's funny....here come all the service outages notifications....a day late and a dollar short but seems those should be outside the core systems so they don't get impacted by the same outage they need to report...hard having been in IT for 25 years not to question the basics of the workflow here...

[piddlinpottery]

I have been trying to find a place to send a formal complaint about the new gift card loading fee that square has decided to charge for ALL gift card formats, but there apparently is no place to do so other than creating a discussion here.

This new fee is ABSOLUTELY RIDICULOUS. Not only will we be charged the credit card fee, plus the cost of the cards that are already invested in, now there's an additional 2.5% of the card value to be added to that. So to sell a $50 gift card it now costs me close to $4 including the cost of the card?  Not to mention, the fee applies also to egift cards! 

I was already on the verge of finding a new POS because of all the fragmented services that you have to pay monthly for, the constant barrage of issues with the Retail app, etc. but now I will for sure be looking for a new system. I know this is the same for quite a lot of sellers in my industry as well.

I saw another post that said they had to do this in order to provide new benefits to the service or something like that, but the only benefit I see to this is more of the small business money in squares pockets. I hope, but doubt, that square takes these complaints they are getting to heart and considers reverting to the old gift card policy. 

[DinaLRosenberg]

I completely agree with you.

We have for the past 5 years in business never passed fees onto our customers.. but with this gift card situation... I may have to charge a surcharge on physical gift cards.. or get rid of them all together. 99% of our gift card purchases are made with CC... Square is already receiving their cut.

With this new fee.. costs associated with gift cards are going to be around 5%... that's INSANE!

[Candlestore]

@DinaLRosenberg ;

Just be careful how you word these fees because if its close to a Credit Card Surcharge you could be in violation of the Credit Card industries fees rules.   Most CC only allow a 3% fee, and as you pointed out it could be close to 5%.  

I always built my CC processing fees into my pricing, but with this I agree with you that I may have to charge a fee like other bigger stores do for their gift cards.  I already saw flat fees for buying store gift cards, and thought they were high for the cost of the Gift card, but if they are including these types of fees, now I understand.  

[DinaLRosenberg]

I wonder if we can charge for the physical gift card itself.. like any other merchandise. So we aren't charging. fee but charging for the card. Like at Walgreens when I get the AmEx gift card it's $4.95

[majpepper]

Yeah, we’ve been using Square for ten years. I’ve been fairly happy with their all in one solution for most of our needs. I’ve been willing to overlook all the idiosyncrasies and not-quite-the-solution I needed but good enough, because it worked, it was integrated, and the fee structure was transparent.

This is patently a cash grab. If this decision is not reversed, we will be dropping Square in favor of a new provider within 6 months.

[jthorvaldson]

We already pay almost $300/month to use Square services (Square for Retail, Loyalty, Marketing). To be charged now for selling gift cards? Really? Yeah, that's a no go for us. I feel like we already pay enough in monthly fees. We also have to purchase the gift cards to use not to mention the credit card processing fees for the payment. Keeping track of our gift cards should be done by coding already embedded in the software that we pay a monthly fee for currently. Why exactly does Square need to charge even more fees on top of what we already pay to load a gift card? And even if Square is dead set on charging a load fee, why is it a percentage vs a flat fee? Does a $200 gift card require any more work than a $10 gift card? We are already looking at different POS systems. If Square doesn't re-consider this fee, we will be switching POS systems this year for sure.

[1369Coffeehouse]

I'll second this!  It's absolutely infuriating, atop their usurious gift card pricing!  We're already paying 10x what other gift card makers charge per card.  How many ways can you squeeze us?