Merchant Cost for Vanilla Reloads?
 

Just wondered if anyone knows actual merchant cost. Assume they are being purchased with an Amex....

My assumption is that the merchant must make some money because they're always trying to sell GCs via promos...but what do I know.

CVS loses money on $500 Vanilla GC's. This is directly from the Managers of 3 different stores.

Managers dont know [redacted]!

^

You couldn't be more wrong

How does it matter to you? its always negotiated and kept secret.

i lol'ed

A grocery store manager told me that AMEX charged them $19 to process a VR card (my guess is $500 load). They first stopped AMEX for VRs for a couple of weeks, and then CC completely.

CVS could get a lower fee but I doubt they really make money on this. Actually I tend to think they very well are losing money for MS purchases.

I don't buy it. They wouldn't sell something that loses them money because it's not enough of a traffic driver to do so. They constantly have gift card promotions for a reason. They're winning somehow.

I think retailers get the gift cards at a discount, say 5-10% off. And they probably get the purchase fee too.

The issuer/bank also makes money on each swipe with the gift card later, so Visa/MC/Amex will make money when you actually use the gift card via interchange fees. Ironically, the issuers should also make money if you purchase the GCs with a cc.

The store gift cards don't have any fees because they assume the cardholders won't use the full value or will spend more at the store than they normally would. So they can offer discounted cards to retailers on that basis.

Everyone is making money.

You are close ^

My guess.

- Stores get kickbacks from BlackHawk, Incomm, Greendot, etc... for selling GC. Most likely more than the transaction fee.

- Incomm, Blackhawk, Greendot make money on the swipe fees and balances that never gets redeemed.

- MSers = paraside for the prepaid networks because we don't swipe, or leave balances unclaimed (except for occasional guy who comes here frantic because he just threw his cards in the trash). But I am pretty sure the prepaid networks are still making money (from other users) despite our efforts. :cool:

There's an MBA sitting in a cubicle somewhere crunching all these numbers and he will decide our fate.

Incoming rampant speculation and arguing that goes nowhere, because no one really knows.

Someone knows and I was hoping they'd post.

It's all about the Benjamins.

So, I'm supposed to believe that these BlackHawk and Incomm empires are as a result of them asking merchants to sell their products at a loss ?