Originally Posted by
krazykanuck
This is my thought too. Pretty much the minimum transaction cost for a grocery store is 1.65% (per Visa's published info) so if you buy a $500 VGC it's likely costing them ~$8, which is more than the VGC purchase fee and that's assuming they get all of the purchase fee.
My guess is that most grocery stores assume they will sell enough low dollar amount gift cards to make a profit on gift cards, on the whole.
Exactly this! I have an ACE hardware store in my area that sold $500 VGCs up until early this year. I would max out my 5% category spend on those VGCs my CCs when home improvement stores where a quarterly category. When they disappeared I inquired as to why and was told by the manager they were losing money on them due to processing fees. It's likely the same for most smaller independent stores.