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. 

[CColotti]

Yes but proves the point about the how the "justification" on card savings was not so well thought out....

[Jenthom08]

I think the worst part about this is that they sent that email thinking that we were too dumb to do the math. "Hey guess what guys? You get to save a few cents on a reusable physical gift card but you now get the privilege of paying us an extra $25 on a $1000 egift card. That's way better right?!!"

[LittleCreek]

We just moved last year from handwritten gift cards/gift certificates- largely because I've been stuck in other POS ecosystems before and was wary of going into that again.  So then we bought into the square gift cards.

Our biz, like so many, is about 98% credit card already, so we already know we lose 3% of sales there.  To add 2.5% for no additional service or effort is just greedy.  We will return to paper certs, and save the 2.5%.  Its not enough for us to leave the POS system, yet, but in past experiences, these kind of fee-stacking behaviors increase and are dreampt up by a board or investment group, and lose sight of what it takes to keep everyone.   Super disappointed.  Also- for some of the above conversations- it is illegal in NY, and most states, to pass the fees along, not that it would go well with customers.

[irh8515]

Why the ridiculous gift card load fees?

[TheRealChipA]

@irh8515 Gift card LOAD fees?  As far as I remember, if you get physical gift cards you pay for the cards, not for loading a gift card amount on them.

[_Violet]

Hi @irh8515 - Thanks for reaching out to us here on the Square Seller Community.

I went ahead and merged your post to an existing thread where other Square Sellers have discussed the recent change to Gift Card pricing as well. We merge duplicate conversations together to keep like comments in one place, and to make it easier for others to find the thread in the future. 

Please see the reply from me, which has been marked as the Best Answer to this question ✅

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

cc: @TheRealChipA

[TheRealChipA]

Well I’ll be darned.  Thanks, @_Violet.  I obviously missed that memo, and owe @irh8515 an apology!  Apologies, @irh8515!  I stand corrected.  Otherwise, hmmmm. Now I have to decide whether to eat this new fee or pass it on to my customers.  Most likely, I’ll just eat it since I have thousands of dollars in gift card funds that haven’t been touched in years.  Until that changes, I’m not really out anything, am I?  I’ll never understand why folks who get gift cards don’t use them.

[CColotti]

FAQ already says NO can’t pass on the fee and most states don’t allow it on gift card sales since the value of the card is fixed.  Don’t even go down that road it’s worse than understanding the legal bits of credit card surcharging which most merchants also don’t meet compliance on. 

[alexandriak]

Square says no to passing on the fee for this. I do see your point though that most of us probably have some outstanding gift card balances that may never be redeemed so in theory yes you're right. But the annoyance for me is I'm paying this new load fee on gift cards I paid the old pricing on. 

[Lovewell]

@_Violet both of the best answers that are marked are not helpful. This is a HUGE issue. And the answers given don’t help anyone. If you guys are trying to discontinue gift card sales altogether you may be succeeding. 🤷🏼‍♀️ 

[homeprogreen]

Yeah I won’t be selling any gift cards after February the 29th

[brick]

I can confirm Square is indeed removing posts, as my earlier reply is no longer anywhere on this thread. Who knows how many hundreds of people have replied and been squelched. 

The bottom line is that on a $100 Gift Card, the fees Square collects will now be near or in excess of 5 points.  5 POINTS!!  That's 5 points off whatever thin margins we're all working on.  That's DOUBLE what it would otherwise be without this new surcharge - for doing absolutely nothing extra. 

What makes this even MORE egregious is the fact that Square tries to pitch this as somehow "aligned" to our needs.  Please stop the charade. According to Square's propaganda message: "We lowered the cost of physical gift cards to reduce your upfront costs and introduced a load fee to better align your costs with your gift card use."  REALLY????  That is an absolute LIE!  It costs NOTHING to load a gift card, plus Square is already getting the transaction fee. Besides that, purchasing a gift card is a ONE-TIME expense, whereas collecting a load fee is a RECURRING expense. You all must think we're stupid... we all know this is a money-grab. Just say so.

For me, this is the final straw.  I paid Square over $41K in fees last year...  since I've joined Square in 2014 they've added surcharges for Loyalty, Marketing, Retail, and others that I can't recall.  And yet Square services are less reliable and stable than ever.  What a joke. 

Square is so poorly managed and has clearly entered the death spiral.  In case you had not heard, Block, Inc., Square's parent company, began to layoff 10% of staff the same day this money grab was announced.  Think that's coincidence?  Just google "Block Inc layoff 2024".  The more people that leave Square over this, the faster it will die.  Good riddance.

[skateman81]

It was in my registered email about 30 minutes ago.  The discount on cards is around 30%, so you would save about 30-40 cents a card.  I would rather have no processing fee.  

[CColotti]

Same and I keep asking how is the same 2.5% fee even applicable to the DIGITAL cards then?  That is straight up robbery.

[CColotti]

Clearly there are a lot of questions unanswered by that useless FAQ including paying subscription users vs free users, how this charged on a digital card the same as a physical

"The 2.5% per load fee ensures you can sell as many or as few gift cards as your customers need without having to pay expensive monthly fees to offer gift cards like those charged by some other POS systems. "  Except those paying subscribing customers already paying additional monthly fees...you left us OUT of this entire equation.   These fees should old be waived then for retail PLUS or restaurant PLUS paying customers.  Our fees should cover this!

[Teryeaw]

Thank you for this! I wonder if Block Inc has any class action suits against them? 
People replying here should take screenshots of their comments in case they get deleted. I’m seeing a few pists make the same observations. Money grab is actually a nicer term than I came up with but it def fits. 

[homeprogreen]

A load fee makes absolutely no sense. It’s a really bad idea to try to increase revenue in this way. The policy at most merchants has always been that when a customer returns a product that the transaction is refunded to a gift card in order to avoid losing the money paid as a processing fee since those aren’t refunded to us if we refund a customer. So we lose the process fee on the original transaction, then the load fee on the gift card of 2.5% and then the processing fee again when the customer uses the gift card? So what this means is that instead of Square increasing their profit by 100% on each gift card by charging a load fee and a processing fee they are going to lose 100% of of the fees because I will absolutely stop selling the gift cards I already have on hand effective February the 29th. It’s really easy to print up some gift certificates and track the sales and redemption of those in Square by hitting “ Other Gift Certificates “ in form of payment during checkout 

[CColotti]

Just another use case not considered with this decision.  Merchant's that don't refund but issue a GC for the return...now there's a load fee for that use case too.  They literally did a zero effort job understanding the actual merchant's use cases for Gift Cards.

[brick]

100%   But these people at Square do not care... not at all. Not until the number of customers that actually leave hits a tipping point.  I will not support a company that pretends it's offering a benefit while they knowingly harm you.  That's simply unethical.  Jack Dorsey needs to cover his losses on crypto in other ways besides milking Square.

[alexandriak]

oh crap!! We do exchanges that way. Guess we won't be anymore.

[Candlestore]

I wonder if the Credit Card industry knows about this as now Square is charging basically 5% or more (2.5 % for in person CC minimum if with Square for Retail Paid,  PLUS a SURCHARGE of 2.5%)  So that is 5% fee on a Credit card to the user.... US MERCHANTS for taking a CC.