Merchant Cost for Vanilla Reloads?

Old Oct 14, 2014, 10:02 am
  #1  
Original Poster
 
Join Date: Nov 2004
Location: Ann Arbor
Programs: HHonors Gold , National Emerald Exec, Hertz Presidents, Delta Gold
Posts: 2,604
Merchant Cost for Vanilla Reloads?

Just wondered if anyone knows actual merchant cost. Assume they are being purchased with an Amex....
Bikeguy is offline  
Old Oct 14, 2014, 10:25 am
  #2  
 
Join Date: Sep 2014
Posts: 109
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.
rooney is offline  
Old Oct 14, 2014, 10:36 am
  #3  
Suspended
 
Join Date: May 2010
Posts: 2,998
CVS loses money on $500 Vanilla GC's. This is directly from the Managers of 3 different stores.
Stoughton is offline  
Old Oct 14, 2014, 11:33 am
  #4  
 
Join Date: May 2013
Location: AZ
Programs: AA, UA, US
Posts: 525
Originally Posted by Stoughton
CVS loses money on $500 Vanilla GC's. This is directly from the Managers of 3 different stores.
Managers dont know [redacted]!

Last edited by cbn42; Oct 15, 2014 at 9:17 pm
oohaahouch is offline  
Old Oct 14, 2014, 11:36 am
  #5  
 
Join Date: Jul 2013
Location: SoCal
Programs: AA EXP, SPG Lifetime Platinum, MR Platinum, Hilton Diamond
Posts: 249
Originally Posted by oohaahouch
Managers dont know [redacted]!
^

Last edited by cbn42; Oct 15, 2014 at 9:17 pm
kenme1 is offline  
Old Oct 14, 2014, 11:39 am
  #6  
Suspended
 
Join Date: May 2010
Posts: 2,998
Originally Posted by oohaahouch
Managers dont know [redacted]!
You couldn't be more wrong

Last edited by cbn42; Oct 15, 2014 at 9:17 pm
Stoughton is offline  
Old Oct 14, 2014, 11:45 am
  #7  
 
Join Date: Feb 2012
Location: Los Angles
Posts: 2,101
Originally Posted by Bikeguy
Just wondered if anyone knows actual merchant cost. Assume they are being purchased with an Amex....
Originally Posted by Stoughton
CVS loses money on $500 Vanilla GC's. This is directly from the Managers of 3 different stores.
How does it matter to you? its always negotiated and kept secret.
prasha11 is offline  
Old Oct 14, 2014, 11:47 am
  #8  
 
Join Date: May 2013
Location: AZ
Programs: AA, UA, US
Posts: 525
Originally Posted by Stoughton
You couldn't be more wrong
i lol'ed
oohaahouch is offline  
Old Oct 14, 2014, 12:14 pm
  #9  
 
Join Date: May 2014
Posts: 191
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.
usalibido is offline  
Old Oct 14, 2014, 12:38 pm
  #10  
 
Join Date: Sep 2014
Posts: 109
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.
rooney is offline  
Old Oct 14, 2014, 12:50 pm
  #11  
 
Join Date: May 2013
Location: AZ
Programs: AA, UA, US
Posts: 525
Originally Posted by rooney
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 ^
oohaahouch is offline  
Old Oct 14, 2014, 12:58 pm
  #12  
 
Join Date: Nov 2013
Location: Sacramento, CA
Posts: 437
Originally Posted by rooney
Everyone is making money.
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.

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

Last edited by vinhboy; Oct 14, 2014 at 1:05 pm
vinhboy is offline  
Old Oct 14, 2014, 1:04 pm
  #13  
 
Join Date: Feb 2014
Posts: 511
Incoming rampant speculation and arguing that goes nowhere, because no one really knows.
hamhead is offline  
Old Oct 15, 2014, 11:23 am
  #14  
Original Poster
 
Join Date: Nov 2004
Location: Ann Arbor
Programs: HHonors Gold , National Emerald Exec, Hertz Presidents, Delta Gold
Posts: 2,604
Originally Posted by hamhead
Incoming rampant speculation and arguing that goes nowhere, because no one really knows.
Someone knows and I was hoping they'd post.
Bikeguy is offline  
Old Oct 15, 2014, 12:56 pm
  #15  
 
Join Date: May 2014
Posts: 527
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 ?
Hbax is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.