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. 

[HeatherMcNeilMT]

I literally have like, a panic attack every time a client uses a gift card now BUT I have been finding the old gift cards under the Cards On File payment section. I would have never guessed that because I don't keep cc info! 

[cbenson]

This is freaking ridiculous.  You get your $$$$ Square when I sell the gift card.  Now you're taking 5%?  I pay you for 6 locations @ $600 a month plus 2.x% of a **bleep**load of sales and you nickel and dime like this?

[Somuchfail]

Considering square is not responding there is only one thing to do here, folks. Start a class action lawsuit. 

Dm if you are interested in joining

[blacklabimaging]

I'm onboard with this idea. They have messed up so many things on us and the amount of time and money it costs us is just ridiculous. And we are so invested in the system now... been with Square for 7+ years. Biggest bait and switch scam in history. Get you on board with great rates, low fees, refund transaction fees with returns and they little by little, take it all away.

No customer support.

No follow up.

No fixes.

No solutions.

But this must all be great for their shareholders. Profits Profits Profits.

[Teryeaw]

If this is illegal; it would definitely be federal case. It might be wise to first reach out to you State Atty General’s office, Consumer Protection. 

[Teryeaw]

I’m a massage therapist. I charge $90 for a 1 hour session. My work is labor intensive and requires that I maintain 12 continuing ed hours a year to maintain my certification. I work with people that are recovering from surgery, injuries or people that overwhelmed with stress. I already charge surcharge for credit card fees, in compliance with my state regs. BUT adding this ridiculous load fee, this complete slap in the face to small business owners, this insulting price gouge to your customers makes this is untenable. 
I think the only thing I can do is still offer the gift cards with a huge email blast to my customers, along with a big note on my website gift card page the following statement:

Dear Customer, Square has decided to price gouge their customers and charge a load fee of 2.5% of your gift card purchase in addition to the credit card fees they charge. These fees have made it necessary for me to raise my rates. $5-7 discounts are available for cash, in store transactions.

Shame on you square. I am seriously considering switching back to paper gift certificates. This is pure BS.

[Teryeaw]

By the way, saw this earlier this year but it slipped from my radar bc my landlord passed away, my building was sold and I had to move my business. Fortunately I found another great location, but I’m still recovering financially. This truly presents a hardship for me and other small business owners. That you would take from our hard-earned profits like this is greedy and heartless. First chance I get I’m speaking with my local bank to switch my credit card processing. I know losing my business won’t crack to big a dent in your bottom line, but I know I deserve better than this. ALL OF YOUR CUSTOMERS DESERVE BETTER THAN THIS!

[Printing]

Hi. We can help with less expensive custom printed gift cards, and pre-loaded gift cards. Feel free to contact us.

[Teryeaw]

If I can’t have the same level & quality of gift cards that I’ve always had without Squares new greedy loading fees, I’m not interested. I’m planning to go to my local bank for credit card processing and possibly go back to paper gift certificates or find another gift card source. Credit card processing fees are one thing, but loading fees? This brings merchant fees to over 5%. No thank you. Give us what we’ve always had without the loading fees lie lose a lot of your customers.