In a segment in News Talk 3AW 693 last week, the presenter took calls from disgruntled consumers complaining about hidden fees that caused them to lose money on the gift card they received. The complaints were valid especially since many gift card providers fail to adequately inform businesses about the fees that they charge.
Most businesses currently using gift cards would already be aware of this problem thanks to complaints from recipients. But those that are considering using gift cards in a future promotion or incentive, should know that this is an issue they may encounter later on. Therefore, the importance of understanding the hidden charges before choosing your gift card solution will play a vital role in the success of your program. This knowledge can guide you to find a gift card provider in Australia that offers fewer and more reasonable fees.
Here are some of the fees hiding in the Terms & Conditions of some gift card providers.

1. Transaction fees

Common among VISA or MasterCard programs, these fees can range anywhere from using the gift card at an ATM to making a balance enquiry to foreign exchange fees when purchasing from a merchant outside Australia. As the name would suggest, these are charged when making a transaction using the gift card, and as such could quickly reduce the amount loaded in the card. Try to avoid gift card providers that charge transaction fees, or at least, find one that keep these fees to a minimum.

2. Administrative fees

This may also be referred to as a maintenance fee wherein the card is charged a certain amount every month after a period of time. For example, if a gift card provider charges $5 per month after six months from the issue of the card, a card with a value of $50 will lose $5 every month after the six-month period.
While an administrative fee can be an incentive for gift card holders to use the card sooner, this can be a potential cause for complaints unless they have been sufficiently informed about this.

3. Gift Card Activation fees

This is often charged on top of the value of the card. So if a gift card provider charges an activation fee of $5, the total cost of purchasing a $50 gift card will be $55. Again, it is important to be clear about this fee because customers may complain on why the actual cost of the card is higher than its apparent value.

4. Cardholder Support fees

Calling customer support or making similar enquiries may also incur charges, which may be as much as $3.99 depending on the gift card provider. Ideally, look for a provider that focuses on providing a positive experience for the end-user by offering cardholder support in their package. If you’re looking for more information on sourcing a gift card provider, our post 10 Questions to Ask a Potential Gift Card Provider details the questions you should ask before choosing your vendor.
It is worth noting that the complaints during the radio show were directed at VISA and MasterCard gift cards, which typically come with a wide range of fees. To minimise these fees and keep your customers happy, consider exploring other alternatives such as eftpos gift cards, which can be used Australia-wide and have no hidden cardholder fees, activation fees, or balance enquiry fees. Then, your customers will be able to maximise the actual value of their gift cards, and you will be able to create a more positive buying experience for them.