Stoughton

huh?

pcharles

"one" is that you?

MDtR-Chicago

Vanilla Debit is not Vanilla Reload.

fti

The guy said he was a supervisor at a CVS. Isn't that "source" enough?? Don't believe him if you want, but he obviously knows more than you and I do. Also obvious is that CVS pays less than face value for the card. I have heard that about gift cards in general. The "spoilage" rate is relatively high on such cards and apparently such spoilage rate is shared with the retailer. Very believable.

MDtR-Chicago

He said they "make a rather nice commission". I'm interested in a clarification of what that means.

There's a $3.95 loading fee. If a nice commission is half of that, ok.

But, again, even at 1%, the credit card processing fee would be over $5 for a full reload. $5 is always higher than $3.95.

If he says that, indeed, they get more than the credit card processing charge, and the source is internal financial documents he has seen with his own eyes, that's probably a decent source.

But it's entirely different than implying that Incomm kicks back a large percentage of $3.95.

There's no evidence these have high spoilage. On the contrary, they probably have the lowest spoilage of any cards on offer, as they are specifically designed to be converted to some other currency, not held onto like a traditional gift card or used down like a debit.

broadwayblue

Anyone know if there is an option with bluebird to schedule a payment for a date in the future? Haven't seen that.

caGALINDO

no option.

augustus21

To answer your question, yes. CVS does not lose money selling these things.

Remember that CVS is not charged by your credit card company to process credit card payment; the merchant's acquiring bank handles that, and passes that down, along with interchange fees, to the merchant. Thus, fees vary merchant to merchant, depending on the deal struck with their bank. However, CVS is likely paying less than 1.7% in total credit card processing fees. I mention this only to demonstrate that the fees to process the transaction are not that high.

CVS is given the "loading fee" + at least 1% of card value. Thus, they always come out ahead when you buy these cards, but they naturally do not want them to be bought with credit cards for the simple fact that it cuts into their profits (and the less obvious problems of their shadier uses).

MDWCommuter

This sounds right to me. I've swam in the pool of gift cards as a merchant and can tell you that it's a breakage game pure and simple. People are forgetful and careless and that's what the seller counts on (prepaid cards aside). You get a cash float and then at some point in the future you get to recognize the unused cash as income. I believe that the retailer keeps the entire $4.95. Can't comment on the CC fees, no experience there.

On another note, had two Vanilla GC's go wonky on me today. Retailer had problems with their computers and even though a receipt printed that said they were activated, the cards were not actually activated. Just spoke to a very nice person at Incomm who gave me instructions on what to do (fax copies of receipt and front and back of cards to them). Sounded promising so I'm hopeful that my cards will be activated tomorrow. Hah.

MDtR-Chicago

See? That explanation at least sounds plausible. (Though when you do the math, it's still a razor thin margin.)

The question now is: Are there enough foolish people who lose their VRs before loading to compensate Incomm for their losses due to fraud, before they pull the product entirely?

gpapadop

>>>>>>>Are there enough foolish people who lose their VRs

I say yes as there are obviously enough foolish people who get credit cards and run up balances on them to allow the banks to still offer crazy signing bonuses!

MDWCommuter

Incomm wouldn't do it if there wasn't money in it that's worth their time. In my experience 30-40% of gift card product goes unused. Shocking, but true -- at least in my experience with product I've sold. And the longer it goes unused, the less likely it will be used. Nearly 100% of that that will be used, gets used within 30 days. Anything beyond that will probably wind up in their pockets and they know it.

So to share some of that breakage with CVS is certainly possible as I've done the same with some of my retailers -- in fact some of the savvy folks ask for it up front as you negotiate the deal.

Happy

I am curious on how far down in the future you would recognize the unused cash as income?

Up until a couple years ago the GC issuers would charge a monthly maintenance fee after the first 6 months and the GC starts losing value bit by bit from the 7th month on... Some law has passed to do away such practice so nowadays most GCs sold do not expire. So I am curious about how far down the breakage can be recognize as income, for accounting purpose.

pcharles

5yrs

member7777

My last good local CVS informed me today that no more gift cards for mvd or vr. Spoke to very nice manager, said they got reamed for allowing, I apologized, since I was the only one using (that I could tell watchting the inventory closely).
Then stopped by a new CVS 30 miles away in the hood when picking up something else and went thru no problem.
Gotta love the consistency.
Then used my last OD gift card in an experiment on Reloadit at Safeway, self service lady told me cash only, went to a cashier, got all the way to hit the green button, cashier had a heart attack, called for help, same lady as self checkout, blah blah blah card already was charged too late I got it but not ever gonna do it again.
So envious of peeps with VR access and no problems. I am going to semi retire for awhile, knocked off a nice chunk last 2 months or so, too much emotional damage to continue....till next time lol.