The Hiccups of Gift Card Churning

This is another post in our Manufactured Monday series. We try to offer some insights into manufacturing spend each Monday. You can view all posts in this series by clicking here.

Manufacturing spend is so often bound with buying gift cards. Whether it’s buying Visa gift cards to load Serve/Bluebird. Or buying reload cards to load a prepaid. Or buying Amex gift cards for extra portal points. Or buying gift cards at a retailer in order to maximize a category bonus.

We’re constantly dealing with cards. A serious Manufacturer can go through hundreds, or even thousands of cards each year.

The Peeled Tab

I recently was doing my standard $500 Visa gift card run at my local supermarket. During check-out, I noticed that one of the pull-off tabs from the back of one of the cards was partially peeled off. I usually pull off all the tabs myself, so as not to spend 5 minutes with the cashier trying to get them off. MetaBank is awful about making those tabs peel-able (though I believe they just started making them better). Most cashiers are happy when they come pulled off, though occasionally a more knowledgeable cashier will insist that they’re supposed to pull it off at the register. Anyway, this particular time I was preoccupied and hadn’t peeled off the tabs myself, so I didn’t notice the partially-removed tab until the cashier was ringing it up.

As many of you know, there are often cases of fraud involving scammers who pull info off the gift card, and use up the funds before you manage to use it. One of the things mentioned is to make sure the tab is still on properly, otherwise they can somehow access the card info. (A similar problem was mentioned recently on travelwithgrant.com that some scammers are pulling the gift card out of the packaging from the bottom and then replacing it and resealing the package.)

Since the tab was partially on, I decided not to make an issue and I bought the gift card. Luckily, I didn’t have any problem unloading the card in Walmart. After it was unloaded I breathed a mental sigh of relief that there wasn’t any issue here.

This got me thinking about all the many hundreds of gift cards I’ve gone through, and how few issues I’ve had with them. So many things could go wrong. Besides scammers, there could be host of other problems like activation issues, not receiving a gift card ordered online or losing a gift card, and so much more.

To be sure, I’ve had some issues, but only two that I would call Hiccups. The rest I’d call micro-Hiccups. And even my Hiccup stories didn’t actually result in any loss, it was just the dreadful wait until the problem was successfully resolved.

I’ll talk about my Hiccup stories, but first let’s talk about how fast to unload.

Activation Time

We always try to unload gift cards as quick as possible. Just get rid of them. Off my hands.

It’s usually easier to track mistakes and take care of them if the problem is found immediately. In this regard, I’d differentiate between temporary cards which are not registered in you name and permanent cards which are. Sure, we all love when the Amex for Target card is unloaded at the ATM within a couple of days, and we all love when Bluebird/Serve/Redbird is bill-paid out immediately, but since those cards are registered to you there’s less risk. If something goes wrong, there are probably protections offered by the prepaid issuer. Contrast that with temporary cards, like reload cards or Visa gift cards, where you have to start finding receipts and convincing managers of the story that went wrong.

So…Should we be heading straight from the supermarket/drugstore/gas station to Walmart/Target/wherever to unload?

Technically, the receipts on gift cards usually say that it may take up to 36 hours to activate. Does it really?

I noticed a difference between Amex versus Visa. In my vast experience with Visa MetaBank gift cards, they activate immediately, or fast enough that I was never able to tell. I’m fairly certain that Vanilla Visa gift cards issued by Bancorp also activate immediately. I don’t buy those often, but I recall buying once in Walgreen’s and going straight out to my car and using it on Evolve.

On the other hand, I recently bought an Amex gift card in my local supermarket and then headed down the block to Target to load Redbird. No go. I tried again a few hours later and it went fine. It was probably 15 minutes between the purchase in the supermarket and the attempted unloading in Target. I don’t know exactly how long it takes.

Since that experience, whenever my local supermarket is out of Visa’s, I’ll buy Mastercard gift cards and use them down the block at Target without a problem. Thus, from my limited data it seems that Visa and Mastercard activate immediately, while Amex may take a few hours.

Where to Hide

When we can’t unload the gift cards immediately, we try to keep them in a safe place meanwhile. Where to put them?

If someone  has a safe in their house, that could be a good idea. But where do you put it right when you come out of the store?

Personally, I’ll always peel off all the packaging and put the card in my pants pocket until it’s unloaded. I keep the receipts in a separate spot so that in case something happens, I’ll still have the receipt. This is especially true for money orders. I always dis-attach the receipt part of the money order immediately, and I put that along with the receipt in one spot and the money order goes in a different spot. This way I’m spread out in two places. I also make sure to fill out money orders right away. Once it’s made out to my name or to my credit card issuer, it’s less enticing to steal.

That being said, I’ve definitely had those adrenaline moments of looking for a $500 gift card or a $1000 money order, but I don’t recall ever really losing one.

Now for my Hiccup stories…

Hiccup #1

One hiccup story was when buying some reload cards at my local drugstore in my attempt to maximize the Citi Dividend Q1 2014. When purchasing the cards, the cashier said we need to do each card separatey. She scanned the first card and the payment went through fine, but with the second card we ran into difficulties. The system took my money but couldn’t activate the card. We needed to get the manager to issue a refund onto my credit card. He explained that the system first completes the credit card purchase, and only after the charge goes through completely will the system go on to activate the gift cards. He didn’t know why the second card wouldn’t activate, he was just explaining why the credit card had been charged, necessitating a managerial refund.

I left the drugstore thinking all was good since I’d gotten the second charge refunded. But when I tried loading up the first card which had gone through properly, it wouldn’t load. What had apparently happened was that the cashier mixed up the two cards: she activated card #1 and handed me card #2. She then  tried activating card #1 again. The system wouldn’t allow activating an active card, and we thus needed to do the refund for that. I then merrily walked out of the drugstore with an inactive card, leaving the active $500 sitting there for the taking.

Luckily, it all ended up fine, but it took a while for that to happen; in the mean-time I had $500 at stake. I returned to the drugstore and explained to the manager what happened. He agreed it was plausible, but he first needed to verify that the funds on the reload card weren’t used. Took a couple of weeks, but in the end he verified the funds were never used. He was then able to get the reload card cancelled and to issue a $503.95 refund to my credit card.

I don’t know what would have happened had the funds on the card been depleted, but it probably wouldn’t have been that simple. They’d likely have to open a criminal investigation into whoever used the funds and eventually get the money back. In such a circumstance, one can try disputing the charge on the credit card to expedite the refund and push the process along.

See travelwithgrant.com for a very similar story to my own. Grant and I share a Hiccup.

Moral of the story is to be super-vigilant about tracking which gift card gets activated and ends up in you hand.

Hiccup #2

My other Hiccup story involved selling gift cards to a gift card reseller. I had a large gift card order of around $1500 which I was sending cross-country to sell to a reseller. The gift cards never reached the reseller. It took about a month, but eventually the package got returned to me from the USPS. I was really fortunate that I had tracking info on the package, but even with tracking it was pretty nerve-racking since at one point the package simply wasn’t moving for two weeks straight. This was over the holiday season when mail is very slow, so I just had to wait it out. Eventually, it started moving and I got it back a few days later.

After I got it back, I took a look to see what my mistake was, I assumed I had put the address in wrong. But I hadn’t. I have no idea why it wasn’t able to get delivered, but the address was completely correct. The only theory I have is that the reseller’s PO Box was full due to the volume of sales over the holiday season. I sent it back to the same address, and it got delivered properly.

Micro-Hiccups

I’ve had many micro-Hiccups; the stories that come to mind are all with merchant gift cards. Here are my micro-Hiccups.

• I did a bunch of orders on zappos.com. Each order consisted of two $100 Zappos gift cards in order to take advantage of an Amex Offer. Most of the orders were received properly, but one of them only had one $100 gift card inside. I had to call in and have them cancel the other $100 gift card which I hadn’t received and issue me $100 refund. I then placed another $100 order so as to trigger the $200 threshold for the Amex Offer.
• I ordered Staples gift cards which were on sale from Giftcardmall on eBay with the intent of reselling the gift cards for a profit. Didn’t quite work out because the gift cards had faulty PINs. While Giftcardmall sent me the real PIN via email, I couldn’t sell the gift card without a proper PIN printed on it. In the end they cancelled the cards and refunded me. I wrote about this here.
• I recently sent in some gift cards to a gift card reseller. They emailed me a few days later that one $50 gift card was missing from the package. I always keep a copy of the gift cards that I send in until I get paid; in case something goes wrong with the shipping I’d be able to try to get a replacement card from the retailer. (I recommended this here.) Before trying to call up the retailer and getting them to issue me a replacement gift card, I called up the reseller and tried seeing if perhaps the gift card had gotten into their system under someone else’s account somehow, since I was really convinced that I had sent it in. They couldn’t find it, but they were willing to accept the gift code electronically, since it was a reseller that I had a long relationship with.

These are my Hiccup stories. What was your biggest Hiccup?