happyvoid

Does your VONS accept credit card for these? I tried paying using CC and they told me cash only but there is no sign anywhere that says that

RQBark

Probably just got unlucky with that cashier. Try again with a different cashier or a different location.

happyvoid

So it is not a hard coded rule? Was it a rule before and/or it got changed?

RQBark

Almost everything is YMMV. Unless the card reader rejected your swipe I would try again with a different cashier since it may just be a recommended policy and not hard coded.

I seems like upper management at most retail establishments discourage the use of CC to purchase cash equivalent GCs if that is the primary purchase since the swipe fees and overhead costs outweigh the profitability. They might not hard code it because the granny who buys $200 of groceries and a $20 VGC for her grandsons birthday on a CC is still a profitable customer, but they still want to weed out the people who are primarily buying GC's and nothing else since they can be more of a liability.

ogg

You have absolutely no idea whether or not gift card sales via credit card are profitable or not at grocery stores. I keep seeing this claim made with nothing to substantiate it. There are similar fees at giftcardmall.com and giftcards.com without any offsetting purchases of non-gift-card items, yet those businesses seem to be thriving and do accept credit cards for purchases. I assume the opposite--that the companies who decide to sell Visa/MCAmEx GCs must be making a profit on them--else why would so many places do that (including drug stores, supermarkets, convenience stores, Simon malls, etc.). Of course, I'll be the first one to admit I don't have any facts to back up my assumption either!

diburning

You are correct. Card issuers pay Blackhawk (or other distributors like GreenDot) to distribute and administer their cards and/or backend accounting. The merchant selling those cards gets paid a commission from Blackhawk. It's a lucrative business as there's no tangible risk involved - the cards are valueless until activated, so merchants are essentially paid to handle a payment with very little liability.

EkekoBWI

Is it just my J4U account, or has Safeway gotten a lot more generous with Rewards for purchases lately in terms of frequency of offers and Rewards amount?

RQBark

You are correct that I do not have inside information on the basis for the decision making at a corporate level. I have read it all over the forums but I may have been regurgitating inaccurate info which I apologize for. I have heard from a friend who is an assistant manager at Freddy's in WA that they aren't supposed to take CC for GC purchases due to profitability but there is pretty much no enforcement and at least his store is way more concerned with loss prevention and other ways they are losing profit. That is just one weak data point though. Stepping back from stating anything as FACT I have to think that there is some sort of basis for that corporate level decision making since they aren't in the business of decreasing profitability and the policy seems to be at all the big retailers.

When you compare the places that actively encourage the sale of GC's versus those that tend to restrict it the biggest different I see is overhead costs. Even Costco, which is known for selling in volume with minimalist stores and reasonable corporate salaries runs at 10% overhead. All of the places that specifically push the sale of GC are moving them at high volume with few employees and minimal physical presence (SM, CGM, etc) which should translate to lower overhead. When you don't have a large overhead like a brick and mortar store you can turn a profit on high volume with low profit margins. A place like WM, Safeway, Kroger which are going to have employees physically unloading trucks, stocking shelves, and checking you out plus paying the property taxes and electrical bills adds a lot of costs. Large retailers also have enormous corporate overhead for marketing, legal, and management. Even if box store retailers are making some profit on the GCs their behavior seems to indiicate tehre is an underlying reason for avoiding the sale.


With all that said... The reason I popped in here was because I went to create another new account for Just4U before heading to Safeway for another set of $100 VGCs, but the $15 off coupon isn't showing up on these new accounts via the app or online. It hasn't been stripped from P2's account and still says it will work until the 22nd for her. I created 2 new accounts for work phone numbers after the promotion was live a week ago so I know they were at least allowing it when the promo first started. Did I miss some fine print or did they pull the promotion from applying to new accounts?

ogg

It's normal for the offer to disappear so you can't add it even though it's still valid if you have added it. Basically, for a two week offer, be sure to add it in the first week. (This has nothing whatever to do with whether the account is new or old.)

craz

At certain supermkts not only do they have a large stand that takes up alot of room in Prime space at the head of an aisle in front, but they have the cards on smaller racks right smack by each register.thats prime space for impulse items Cant help but think they are getting good money for the space they are giving whomever is behind the cards, no different then Coke or Pepsi pays for prime eye level shelf space

that said I have no idea how much they make and how, all I know is no store is gonna give away prime space for nothing in return

RQBark

Last year humbled_thoughts posted on FT with some info from Blackhawk Network SEC filings which indicated ~9% margin with stores getting ~5% for selling them. https://www.flyertalk.com/forum/30969978-post100.html Purchases with credit card would eat a huge piece of that margin.



That being said I agree with you completely that stores aren’t giving anything away for free. My guess is that the real profit must be in the closed loop store specific cards. During my run today I was checking out cards near the register and at both stores the cards at the register were closed loop store cards. Better profit on closed loop cards would explain why they are included in fuel programs and have much higher discounts during sales.

Edit: Couldn’t sleep so I figured actually reading some of the SEC filing myself should do the trick. I confirmed my previous guess that closed loop store specific GC’s must pay out more than the open loop VGC/MCGC/AGC products. The filing states, “Partner distribution expense percentage is affected by changes in the proportion of sales i) among our various products (as we share significantly lower amounts of revenues included in Program and other fees generated by our open loop gift, open loop incentive and financial services products)”

danpeake

Many moons ago I had a summer job at Best Buy. They really pushed selling gift cards, especially around the holidays, as we were told for every dollar a customer paid for with a gift card, they spent another dollar out of their own pocket.

diburning

I remember back in the day when Best Buy gift cards were semi open loop. I could purchase other gift cards with Best Buy gift cards, so I would buy Best Buy gift cards at a store where I had a category bonus (which was either the grocery store or an office supply store), go to Best Buy, grab the tech related gift card that I actually wanted (that the grocery/office supply store didn't carry), and then went through my friend's register (they made a negligible commission back then).

TyPo311

Agree with this for the most part re closed loop vs VGC/MCGC but remember that the VGC comes with a fee whereas closed loop is generally 0 fee. For the 500 variable visas the fee is a relatively small portion at ~1%, whereas the $50 and $100 that people are more likely to give as gifts is between 5% and 10%. There's also plenty of wiggle room with breakage from unused or lost cards.

rasheed

Albertsons is trying to go public so getting easy revenud inflation on selling these cards would not be a surprise.

I still don't know why Safeway sold Blackhawk, that seems like a cash king with the amount of unredeemed breakage out there.