A new offer at Money Mart provides another way to get fast cash – by forgoing half the value of a gift card. 

The payday loan company is now offering customers the opportunity to trade in their gift cards for cash. Online, the rate is touted as "excellent."

But the rate at Money Mart locations is 50 per cent of the value of the card in cash.

'I do not think the payday lending industry should be profiting off of people in crisis.' - Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction

The offer comes at a time when more charitable agencies are giving gift cards to clients to purchase gifts and groceries as an alternative to food banks and toy drives.

The offer drew criticism Thursday from anti-poverty advocates and government officials disheartened by a program they said targets vulnerable people in a high-pressure season.

The rate prompted comparisons to the Grinch at Queen's Park Thursday by NDP government and consumer services critic Jagmeet Singh.

"I think everyone in this House agrees that this type of scheme that takes advantage of people that are already so vulnerable, particularly at this giving time of year, is not acceptable," Singh said.

Consumer affairs minister David Orazietti said the government will be responding to Money Mart's new promotion.

"I think we all agree, and this is certainly not a partisan issue, that those individuals who are vulnerable and those individuals who may from time to time need to use these organizations to complete financial transactions – we want to ensure that they’re not taken advantage of," he said. 

Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction, called the rate of exchange "absolutely reprehensible." 

"Particularly at this time of year when people are going through a very stressful situation, it really does prey on the vulnerable," he said.

50% 'does not seem like a fair deal'

The Money Mart offer comes as charitable organizations have been giving out more and more gift cards to clients to purchase Christmas dinners or children's toys, rather than line up at a food bank or rely on whatever toys are donated. 

The Boys and Girls Clubs of Hamilton gives out more than $3,000 in gift cards for department stores and grocery stores every Christmas to families the agency works with, said executive director Glenn Harkness.

'Money Mart believes it is offering customers a convenient, value-added product through this service.' - Statement from Money Mart

"We do that because it empowers the family to go out and buy what they need, instead of us making a decision," Harkness said. "We used to get the list: 'Tom likes this and Mary likes that...'" 

The Money Mart offer uses some of the same wording. "Be empowered to get the most out of your gift cards by selling them for cash — today!" 

Cooper said the holiday season can bring extra pressure as families struggle to balance rent and groceries with desires to celebrate the holidays. In such straits, exchanging a gift card even for such a rate might seem tempting, Cooper said.

"That's understandable, but I do not think the payday lending industry should be profiting off of people in crisis," Cooper said. "We know those gift cards do have a value, and certainly 50 per cent of their value being given back in cash does not seem like a fair deal."

Money Mart, said in a statement sent by email early Friday morning that it "believes it is offering customers a convenient, value-added product through this service.”

Inside the Money Mart on James Street North near Wilson Street in Hamilton, a woman wearing a manager name tag identifying her as "Eva" said the program is for people who have old gift cards they don't want to use. If anyone asks about the rate, she said, she tells them the other 50 per cent goes to cover fees.

She said she didn't understand why someone who gives someone else a gift card would care about the rate of exchange.

"If you give it to somebody, why do you care what they do with it?" she said.

Online sites that offer chances to swap or sell unwanted gift cards typically offer higher returns on the existing balance. GiftCardGranny.com highlights two different resellers for Canadian gift cards, apparently offering between 60 and 90 per cent of the balance, depending on the gift card brand.

Harkness said the Money Mart offer doesn't give him second thoughts about the Boys and Girls Club holiday plans. He said he hopes to see new regulations to keep payday loan companies from practices like this.

"We're not going to change what we do for families, because it's the right thing to do," he said. "I'm hoping that people realize it's too much."