As a token of love, it is much better suited than gift vouchers. But sometimes it’s a perfectly fitting gift.
Posted at 6:30am
With that in mind, and not wanting to seem dated by offering a check, I went to the pharmacy. In order to give the recipient as much flexibility as possible, I decided on a Visa card with pretty candles on the packaging and the note “The perfect gift”. It could have been Mastercard or American Express.
At the checkout, the man in front of me was holding four samples of the same product. I listened because he didn’t seem to understand his bill and the cashier explained it to him. That’s how I found out that his $25 prepaid “credit card” came with a “purchase fee” of $4.95 each. Taxable Fees. Ouch!
Looking at the back, I also learn that if the recipient takes too long to redeem their gift, a $3 “monthly maintenance fee” will be deducted.
So not only does a $25 card cost $30.69, but its balance could eventually melt like snow in the sun. All alone. To avoid this scenario, the card must be emptied within 12 months of purchase.
Some maps are even more challenging. Mastercard’s Joker, which allows the buyer to choose the amount of the gift (between $25 and $200), has an activation fee of $7.95 plus tax. Visa Joker (between $200 and $500): $9.95 fee.
PHOTO OLIVIER JEAN, THE PRESS
prepaid credit card
PROVIDED BY LPC AVOCATS
Example of a Mastercard Joker card
PHOTO OLIVIER JEAN, THE PRESS
prepaid credit card
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What complicates the deal is that activation (or purchase) and monthly maintenance (or inactivity) fees are banned for cards that can be used in a single store, be it McDonald’s, Simons or the SAQ.
However, multi-location cards, including cards issued by malls, are not subject to this provision of the Consumer Protection Act (LPC). And there are no rules for free vouchers, for example for campaigns.
These exceptions are confusing for consumers.
“Financial institutions’ cards can charge whatever fees they want, as long as they clearly disclose it prior to purchase,” said Consumer Protection Agency spokesman Charles Tanguay. The same logic applies when it comes to expiration dates. However, Visa and Mastercard gift card balances never expire and can be transferred to another card by calling customer service.
Class Action Application
Even if their activation fees are legal, these cards are problematic, according to Montreal-based company LPC Avocats. The price displayed “must include the total sums that the consumer has to pay” and “must stand out more clearly than the sums that make up the price”.
Me Joey Zukran also filed a motion for authorization to commence a class action lawsuit last fall. It is possible not to deceive customers. In the United States, some retailers, such as Walmart, display an all-inclusive price.
SCREEN CAPTURE FROM US WALMART WEBSITE
In the United States, Walmart displays online prices that include card activation fees.
The CPA also prevents merchants in Quebec from charging a higher price than advertised. Therefore, under the Price Accuracy Policy, Mr. Zukran rules that consumers are entitled to charge $10 as if it were a classic pricing error.
Its action targets a long list of retailers, including Couche-Tard, Jean Coutu, Walmart, Canadian Tire, Pharmaprix, Best Buy and Dollarama, as well as Visa, Mastercard, American Express and People’s Trust.
At first glance, these cards, which can be used almost anywhere, seem quite practical. For the teenager who doesn’t have a credit card, same for online purchases from Amazon.
But they come with usage restrictions.
Some dispensers refuse them. Restaurants and hotels may charge fees for transactions.
Traders are also entitled to refuse split transactions. In other words, the $100 card holder might not be able to use it on $150 shoes.
When traveling to the Eurozone, the maximum allowable spend per transaction is limited to CAN$75, quote pages of Joker cards and The Perfect Gift. American Express accepts gift cards in Canada and the United States only.
For the latitude mentioned above we will be back.
Good old checks and cash might not look as good as prepaid credit cards, but at least they don’t cause any nasty surprises.