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. 

[mwulf]

I am so furious about this as well! It is so ridiculous. I have been with Square for 10 years, just like some of you have mentioned, and we all have adjusted to the increases in fees and expenses, but this one hurts and is not fair.

I have reached out to my sales rep as well as a different support and haven't heard anything back as to why they implemented it or if they can lower it or get rid of it all together. 

With being a small shop, every dollar counts and can't justify spending any more on fees. AH!

[lodee]

Since gift cards will be 30% cheaper upfront, what about the 2k+ gift cards I ordered in bulk before we were ever notified about this? Will I be getting a 30% refund on the cost of those? Otherwise this just seems like a slap across the face.

[CColotti]

When did you order them?  I was originally told no refunds for the difference but then ecard systems actually did do it with a separate email.  Worth calling them.  Mine were bough Jan 5th and the credit came last week. 

this week I’ve been selling them to local businesses a promo items as fast as I can. 

[lodee]

Good to know! I purchased 3k in November 2023, I have 2k left. I'll reach out to ecardsystems to see.

[CColotti]

Those might be too far back but can’t hurt to ask. Being mine we less than 30 days ago they seemed to do it.  Never know. 

[skateman81]

I have already started the process of leaving Square.  I found a new POS and credit card processing company where I can do my gift card without any fees.  Best part is I haven't had to purchase much new hardware.   My business relies HEAVILY on gift card sales and unless this new system doesn't workout, I don't see myself returning. 

[brick]

What POS?

[skateman81]

Loyverse. Works very similarly.  You can choose SumUp or Zettle for processing.  They don't exactly have a gift card program but there is a feature where there is a workaround using the built in "loyalty" program.  

[skateman81]

it Doesn't have a LOT of feature that square does though, but I don't use a lot of the features.  So if you use most of their POS sale features, it may or may not have it.  But so far it looks like it will work for my business. 

[brick]

I'll check that out.  Thanks!

[skateman81]

If you are curious how to do the gift card work around, shoot me an email and I can show you: bsmay2000@gmail.com

[tdgjrb]

Both the online FAQ and @_Violet state: 

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

So, I will go ahead and ask something that I am sure others are thinking of.

How will Square react if I sell an item like "PAY IT FORWARD GOOD WILL CONTRIBUTION" for say $100 and then immediately refund that item amount to a gift card?

I do not think this policy change and its impact on businesses was well thought through, and processes like the one I describe are a rational reaction to an unreasonable and expensive policy.

[CColotti]

I brought this up I just worded it a little different....I may load a GC to give away for $100 and just use a 100% discount on the transaction which means it's loaded but no money was actually taken in.  My understanding is you will still pay the 2.5% loading fee just no transaction fee since the load fee also applies to cash loads, and it's the action of loading it not the form of payment that is where the loading fee applies...

[tdgjrb]

Hi @CColotti,

I take the Square statement at face value and believe that a REFUND transaction is fundamentally different from a  LOAD transaction, even when the LOAD is discounted.

But mostly it is silly that  merchants who are already paying significant fees to Square have to look for clever workarounds to avoid being charged a made up just-because-we-can fee.

Thanks

[CColotti]

Oh I re-read your statement.  You are saying record a sale, then refund it to a GC...maybe you shouldn't post that it will yes give merchants ideas but then they will turn around and change the policy LOL...I see what you are saying now though.   My version is a load fee...yours is a refund going to a GC which has no load fee...wow...yeah.

[tdgjrb]

I had the same concern that posting this may lead Square to make their policy even worse.

But I always try to be honest and above-board with my customers, employees and vendors, so I'd rather plainly state something than try to sneak it in. Even when sneaking in is an appropriate response to an arbitrary fee imposed by a behemoth corporation against the little guys.

I naively hope that someone at Square will put on a thinking cap and realize this merchant antagonizing move is one that should be reversed. A girl can dream.

[Jenthom08]

I think way back in the thread Violet said the load fee would not apply 'refunds' to a gift card which is different to a 100% discount. I had the same thought, won't people just sell 'something' than immediately refund the amount to a gift card?

[CColotti]

Yep yep, just updated my reply.  Sell a "widget" and refund it but now that we have told them that....guess what will happen...I'd remove these LOL

[SMW]

I 100% agree with the discontent voiced here. I would like to add that not only is Square double dipping us with these fees but they havent fixed known gift card bugs for years. If you, Square, are going to charge these additional fees you **bleep** well better make sure your product is flawless. and it is certainly NOT.   

Gift card problem that has existed FOR YEARS:
MY BUSINESS IS MASSAGE. WHEN I SELL AN ITEM THAT ITEM IS FOR A "MASSAGE SESSION" AT A SET AMOUNT AND EVERYONE TIPS. I AM CONSIDERING ELIMINATING GIFT CARDS BECAUSE OF THIS ONGOING PROBLEM AND THE VERY CUMBERSOME WORK AROUND. A GIFT CARD IS TREATED AS ANY OTHER TENDER AND THE SQUARE SYSTEM SHOULD OPERATE AS SUCH.

IF THE GC IS EQUAL TO THE ITEM/SESSION AMOUNT:

IT WILL NOT PROMPT FOR GRATUITY!

YOU HAVE TO EMBARRASSINGLY ASK THE CUSTOMER “IF THEY WISH TO PUT IT THROUGH EQUAL TO THE SESSION COST OR IF THEY WISH TO ADD ANYTHING BEFORE DOING SO”

IF THEY WANT TO ADD GRATUITY YOU MUST USE THE KEYPAD FUNCTION AT THE TOP LEFT. ALWAYS ENTER A “NOTE” OF “(YOUR NAME) TIP/GRATUITY” AND ENTER THE AMOUNT.

ONCE YOU SWIPE THE GC AS PAYMENT IT SHOULD PROMPT FOR ADDITIONAL FORM OF PAYMENT.

THE BACKUP OPTION IF YOU MISSED DOING THE ABOVE IS TO CREATE A 2ND SALE FOR A CUSTOM AMOUNT USING THE KEYPAD FUNCTION AS DESCRIBED ABOVE.
AWFUL.

[LSPA]

We are disappointed by Square and decided to switch to a different provider for Gift Cards and Credit Card processing.  We are a high volume and low margin business, so 2.5% extra fee makes a impact.  We have custom pricing on credit cards processing due to high volumes.  

We have invested a lot in the Square hardware since 2017, and sitting on thousands of new gift cards that we purchased at a premium price in December.  Square has not offered to remiumbuse for printing of the cards. 

@Wendyct, @_Violet and @skateman81 - would you allow us to migrate gift card data?  We don't have access to the outstanding gift card numbers and amounts.

[JJ_]

Thank you for taking the time to share your decision. I am sad to see you go. Our support team can help you migrate cards to another provider. When you reach out explicitly let them know that you are the owner of the account that you need to migrate your Square Gift Cards to a new provider and that you will no longer be using Square as your Gift Card Provider.  After confirming your identity, they will get your request escalated.