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]

Personally I just added PayPal Zettle on my phone as a tap to pay "backup" option.  I also was considering GoDaddy and Stripe as they both offer simple Tap To Pay options that can accept payments in a bad situation.  I believe the POS side will still work for orders and kitchen tickets in offline or cash only mode but I have to test.

In my wife's business we have used, PayPal, CarConnect, Stripe, and quickbooks payments and I can count on one hand the COMBINED outages of all those processors in the last 10 years of using them.  I am not sure who the CTO, and CISO are over at HQ, but they need to get their house in order.  a $41B company should not have operational issues like a startup company.  Small business, and people's livelihood depend on processing cards.  We keep pushing for a Cashless society and then what?

I am sure the restaurant POS side of things will function but yes everyone needs a "backup" means of processing cards at this point.  Clearly Square has too many Single Points of failure, so as a user and a merchant eliminate your own SPOF by adding a 1-2 other apps.  Yes the rates will vary but during a busy day do you care more about the rates or transacting business?  Zettle, GoDaddy, and Stripe all have phone apps for tap to pay.  Venmo is in a slow roll to release it as well it's not showing for everyone, but there are some "pinch" backup options out there just for the processing part of things.

I certainly prefer the actual square register as I am not keen to using my personal phone, but as a backup option I can't think of another way that is somewhat "easy".  I was looking and I think Zettle and the others you can add "employee" users but then everyone is carrying their personal device around to make charges...

[alexandriak]

After their last big outage I had ordered a PayPal Zettle reader and so yesterday we just pulled that out, opened that app, and kept on moving. 

[CColotti]

Yep 100%.  I added the phone app for sure but I may add a reader b/c I think that can be used with a "universal" device like an ipad.  Tap to pay on phone requires an iPhone specifically but with an external reader it is true the option may be better to not have to use my personal phone specifically.

[Donnie-M]

The biggest weakness in an outage currently is if you are completely cloud connected services and USB connected printers.  It makes it impossible to route tickets, but we have 2 fallback procedures.  1 is to print the order tickets at the register and hand them back to the kitchen.  The 2nd way is to route kitchen tickets to a networked kitchen printer.  Running an in house router and small network is the best defense in these times coupled with a back up processor.  We just enter those in as an alternate tender and keep on going. 

The biggest challenge currently is WHEN to make those adjustments.  I use the terminals for payments and when the cloud goes down, then you have to process the cards on the stand.  The abrupt change is the hard thing to manage.

[CColotti]

@Donnie-M

That being the case we might be good.  we use the USB printer and printer driven drawer BUT I also got a network kitchen printer and the network KDS for my food truck.  The printer can even use a LAN connection too.

They are all connected by an internal router to get to the internet.  My basic test will be just dropping the internet uplink side (kill the internet) and see if the tickets still route over the LAN and receipts print via USB.  It's easy enough for me to go offline if the LAN tickets route which I'd think they would.  If all that required Cloud connectivity It's a flawed system.  Only updating the menu, and CC processing real time should really need that.  Tickets should not go up to come back down but I can test all that easy enough for sure.

If that all works then I can run a cash sale and fall back to the Zettle reader for CC payment in an outage.  The fact is as an IT person I understand I need a backup system of some kind not rely 100% on one system (as long as tickets route) I can still transact and fill orders.  Happy to let you know how that process/testing goes.

[Donnie-M]

@brick I got to jump here and take a little exception to the term "abuse of power".  I would be very offended if someone who buys my food demanded I sell it for less or otherwise I am a bad person or taking advantage of the person.

As a business owner, I greatly value my ability to run my business the way I see fit.  I also raise my prices when my costs go up due to wages or inflation.  I do not run a charity nor can I force someone to eat my food.  I think it is smart business to build a system or product that people when invested are better off than switching to the competition every 5 minutes.

The point is you have the freedom of choice to do business or not do business with someone.  No one wants to pay more, but that is the way it has been and always will be.  If you don't get the value for something or don't think it is priced appropriately, you get the right to run your business the way you see fit....why would you expect anything less from square...a business?

I double checked and toast charges more for the same type of cards through e-card systems, they charge a monthly fee to use the system, and they still charge CC processing fees on loads...

Everyone charges the CC fees...clover charges 2.5% per load and you still have to buy the physical cards.

Square is actually one of the last companies to charge a per load fee to use the system..but there are NO ongoing costs after the load.

[dsachs]

I would love to meet what idiot thought this was a good idea at Square. We were about to migrate our website to Sqaure hosting to streamline everything. Now, I’m going to keep with Wix and try and figure out how to maybe sell physical gift cards through Wix. Which ironically, processes through square.

In the meantime, we will be posting a very prominent sign stating our business can no longer afford to sell gift cards due to Sqaures policy. We will also be posting their customer service phone number so our customers can call them to let them know. It’s absolutely insane they would value my businesses loyalty this little…

[CColotti]

Jack Dorsey might be the idiot you are looking for, CEO of Block Inc..

[CColotti]

So here's what's even better...You LOAD a card for YOU yourself to give away to people.  You run that as a 100% discount so you pay no processing fee BUT it still cost YOU 2.5% to give away a card to your customer or use as a promotion.  The loading fee in that case should not even apply...

This was not well thought out when you would be better off just hading them $5 cash from the till!

[MADBros]

Back to certificates or single-use cards that are worth the value you put on them for a one-time purchase. 

[nicholasfeigen]

This is our most prominent use case for the gift cards... we use this 20 or so times a year,   This change from square is going to make my job radically more difficult 😞

This, after the change away from refunding fees when refunding transactions, is really terrible for small businesses

[MistsOfValhalla]

I tried this, and STILL got hit with the 2.5% fee. This is bull***t. Looks like no more GCs for me. 

[CColotti]

Tried what?  Doing 100% discount for a giveaway?   Yes you will pay the load fee that is what I stated originally.  

the workaround stated later was to issue that giveaway as a “refunded sale”.   Go dig around but square has gone largely radio silent now on this more in the “a problem ignore long enough eventually goes away” methodology 

[MADBros]

I agree that this is a bad move, just one more reason that I feel Square is not what it used to be. It seems more and more Square is taking money from everything they offer and in my opinion pricing themselves out of the game. Luckily I am already in the process of deciding to leave. The sad part is all systems like Square are generally the same. 

[skateman81]

When you say all systems are generally the same, do they charge loading fees for gift cards? I understand they all charge processing fees. 

[Lovewell]

@MADBros I am really crossing my fingers that this is not the start of a long string of changes and fees heading our way. I still have faith in square. As I think we all should despite this very ill planned change to gift cards. I do not think one decision defines the company so I am having faith square will make this right. 

[CColotti]

I really do feel like something like this should be a waived fee for PLUS paying customers OR if nothing else a much reduced fee....to shotgun the fee for all merchants regardless of user level is truly horrible.....as a new merchant I am already paying $150-$200 a month for the various pieces and parts and I still maintain that was never considered with this rollout.

[CColotti]

I think all merchants need to contact their local Attorney Generals as a starting point on this too.  

[MADBros]

I agree. I would also encourage everyone to talk to their Attorney about their state laws on adding an Initial issuance fee to help cover this ridiculous charge. 

[MADBros]

Also, another idea for everyone is take all your cards and pre-load them before March 1st, 2024. Do amounts that make sense $10,$25, $50 then all your cards are loaded. Keep track of them (you can pull them from square once loaded) and mark them down when given out so you can wipe them in case of theft. 

[CColotti]

Ah well...this explains some of it....time we all email Jack about this..

https://cointelegraph.com/news/jack-dorsey-block-layoffs-leaner-operations