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. 

[Submatic]

As a Square partner we developed a feature that plugs into the Gift Card system.  The feature allows businesses to offer members tracked balances (for example join as a member and receive $50 to spend every month).  We developed this feature last year before the new fee was announced.  The new 2.5% fee makes the feature a lot less practical. 

It was definitely a bummer to learn about the new fee. 😥

[isabels]

I just discovered this today when I noticed the "load fee" on my daily report. I also have a gift card program for my loyal regulars to give them a discount. In this way I feel better as I am forced to raise prices due to the increase in costs overall. I do feel this fee is unfair and redundant. Already there was a per transaction fee in addition to the percent taken for a credit card sale. So NOW, per transaction, percentage for credit card sale AND a load fee on a gift card on top of it all! I also use gift cards as donations and promotions. I stocked up last year to be sure I wouldn't run out, so it is likely I won't run out for several years. Thus I will not get the benefit of the lowered up front cost.

I use a number of the Square products, and I am generally satisfied with what I get. I am frustrated when the fees keep increasing on a fairly regular basis. During this high inflation era, there is only so much I can pass on to the customer in pricing. I won't pass on fees directly to them. It seems rude.

[homeprogreen]

the Square Loyalty program is a much better way to reward regulars. They can earn discounts without requiring you to carry gift card balances on your books so you avoid that liability on your P&L sheet.I have mine set so that the customer earns 1 star for every 20 dollars spent and when they have 10 stars they can redeem them for 10% off a total purchase, customers love it. you can configure your loyalty program however you want to best suit your particular business 

[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.

[UGJac]

Square needs to offer a partial refund to those of us who purchased a bulk order of cards. I'm sitting here with 1,000 brand new in box cards.  But they already have the money I paid for them, AND now they're taking a percentage of what gets added to it! 

From a square agent:

I am sorry to hear this. This is due to Square's new policies regarding gift cards. Unfortunately if you purchased them previously I cannot offer any refunds, as the new policies were not in effect at the time you purchased them.

Square is on their way to losing my business... But do they really care?!

[jthorvaldson]

We sell close to $30,000 in gift cards annually. That is an extra $750.00 in load fees on top of all the fees we already pay to Square monthly and for credit card processing. This is the straw that broke the camel's back, people. I am meeting with our bank tomorrow to discuss other POS system options that they work with as well as exploring other options out there. They have yet to say what this new "load fee" is going to. I would imagine all the "work" that goes into selling a gift card and keeping records of them is already built into the software, right? And how does a $200 gift card require more work to load than a $10 or $25 gift card?

[mablack]

How and when were you notified of the recent gift card fee change?   I don't find any correspondence from Square. 

Thanks 

[BernadetteA]

Thanks for reaching out, @mablack

I believe an email was sent out to the address on file for the account. I apologize if you did not receive the email, but also recommend checking your spam/bulk folder. 

I am merging your post to this thread where other sellers have been discussing the update. We merge posts to keep track of feedback, and for posting updates when applicable. 

[RoasterChica]

I see you replying to the question of being informed about gift card changes, but no one has replied yet to my inquiry about the effects on reporting.  As @bkraft has seconded, the reconciliation process has been a mess.  Is anyone listening??

[IroncladCafe]

Legitimately was JUST coming back to use Square for our card processing and gift cards. Guess not any more.

[Rp3]

Also disappointed in this change.

[RoasterChica]

@_Violet or someone else from Square, I previously email Square about this and got the big blow off.  Could you please update on this important reporting issue...

For bookkeeping purposes, now (on daily Sales Reports) when you subtract Fees from Total collected from Card, the amount no longer aligns with the Balance that was actually deposited. Nobody should have to navigate to yet another screen to see the actual balance deposited.  It's bad enough that there are now new load fees on the gift cards, but for the love of all that is good, PLEASE roll the new fees into total fees on the Dashboard & Daily Sales Reports!!!

[bkraft]

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PLEASE roll the new fees into total fees on the Dashboard & Daily Sales Reports!!!

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Seconding this! The reconciliation process has been a mess since this update. Please update.

[SunnysideGreenh]

This is getting ridiculous. First they remove the ability to surcharge and now I pay to have a gift card loaded. I also see that they have reduced the actual price of the physical card to offset the new fee which is great. Are they going to reimburse us the difference for the cards we have already purchased but haven't used yet. I'm done with square. I have researched other POS systems and they have better functionality and don't charge these load fees and have surcharging capabilities. 

[Teryeaw]

Thank you! I’m speaking to my bank next week Square used to be great for small business and now… not so much. 

[HeatherMcNeilMT]

So where is everyone moving their gift card sales to? These fees are outrageous and deceptive. 

[Teryeaw]

I’m actually willing to switch back to  paper gift certificates until I find another source. 

[blacklabimaging]

This is yet just another reason we are seriously contemplating on dumping Square. They are becoming the masters of bait and switch to lure in new users to their systems and then when they need to make their stock investors happy, start gouging us with these fees.

I would love to know what that 2.5% is going to be used for... the new features they are talking about. 

Our company sells a lot of items that don't have a huge markup, the 2.6% fee was already hurting on those items and we do not pass that fee onto our customers. Now adding 2.5% on top of that doesn't leave a whole lot left. Raising our prices is counterproductive especially since the government is working so hard to get inflation down.

Looks like Square is helping keep inflation up. We should pass this thread along to the feds 😉

Thanks again Square for ruining my day. Probably tomorrow your systems will be down again and I won't be able to process cards all day. Cash Is King!!

[Teryeaw]

I’ve wondered if this is legal. A flat fee fee would be on thing but this is like paying thugs protection money. What is the 2.5% being used for? I’m definitely contacting my states Attorney General’s office. Everyone should do the same in their state. 

[cartee]

The new 2.5% gift card load fee is very difficult to swallow as an ADDED cost to a gift card transaction. Historically the transaction fees charged by Square have been justifiable (even in the face of banks and card processors who try to convince you otherwise) BECAUSE of the added value of the Square software, not to mention the hidden fees with traditional merchant accounts. The subscription fees for advanced services like payroll and appointments make perfect sense. This gift card load fee is out of place among Square's other pricing, seems to border on qualifying as a junk fee, and I certainly hope Square will reconsider to keep the gift card business on their system.

[RSPoke4Well]

Bigger issue now is tracking the gift cards sold prior to the price change.  The Dashboard no longer includes them in the reports.  SInce we can't track via customer, I'm at a loss as to what was actually redeemed by older cards and what is old card sales.  AND you treat giftcards as "card not present" transactions now?  So it's actually higher fees than you are advertising.