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Busted: Visa Gift Card  Comment Icon 27 Broadcast DATE: Friday, MARCH 4, 2011
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Are there special rules for gift cards sold by the banks?

Last year, Canadians spent about six billion dollars on gift cards. But we’ve heard many complaints from viewers about a certain kind of gift card that are issued by banks. In this week's Busted segment, Erica Johnson puts the Visa Gift Card to the test.

Your Comments (27)
In reply to a comment from Travis

I will never buy one of those again! A gift of good intention that does not give, other than to the bank.

You may also want to check out Titanium prepaid Visa as well..I went to money mart for a prepaid visa. Got the card off the rack, put money on it, then she said, that will be also 23.50...For what I asked..She said you have to pay for that service.
So a month passes and i get my statement which says. 7.50 for a monthly service fee.
I ordered a Itune song for .99cents and was charged .50cents for making a purchase, then on top of that a foreign transaction fee of 1.40..and every time it is a different price.
Called the call center and was charged a 1.50, then to replace a lost card is 5.00 dollars.
So if I put 50.00dollars on a card in one month its gone....Not by me, but Them....
THIS IS SO WRONG....Scrap the cards!!!

On top of all that the retailer is also charged more in service fees for accepting these cards. If they are a VISA merchant they cannot decline to accept these cards or they run the risk of VISA closing their merchant account.

I received 2 $50 VISA cards, and when I went to use them, all my money was their, but it was the whole principle of the cards. When I went to AE to buy a pair of $49.99 jeans, the total came to $52.49 so when i swiped my card it said declined (because i was trying to purchase something of more value than the card). And even if you do spend less than the card, the receipt doesn't give you the remaining balance, meaning that you have to call the 1-800 number to find out your actual balance, making it almost impossible to spend every cent of the card (unless you can buy something that with tax costs EXACTLY $50) I understand that this is not VISA's fault but the way the system is set up. I will NEVER buy these cards again!

Why is this so surprising? Banks are, and have historically been, some of the most profitable corporations in Canada. Banks operate within a Capitalist model i.e. their prime motivation is to make money. They will continue to charge fees wherever the law will allow them to and will constantly push the limits of the current laws.

Like it or not, this is our system and it's not going to change anytime soon.

How about we as consumers take some responsibility to inform ourselves before we purchase something. Read the small print BEFORE you buy and then vote with your dollars.

Sometimes the lessons that have a financial bite are the ones we remember most. Thanks to Marketplace for helping some of us learn the lesson without the financial bite.

Oh, and try buying some bank stock for your kids (RESP) to help them offset the fees they will inevitably pay.

What about the "gift cards" from Cadillac Fairview? Right off the bat they charge a service fee and I'm pretty sure that there's an expiry date. Perhaps the expiry has been changed, but I know that there's an up front charge. I NEVER will buy a card that costs me more than the stated face value.

I to had a vanilla gift card that was gobbled up by fees, complete ripoff. They had started deducting fees off of the gift card before i even had it in my possession. They refunded some but not all on one of the 2 cards that i had.

I won't buy Vanilla VISA's anymore. They are too much trouble and ask for too much personal data on the Internet. (That's the very reason people buy them in the first place - because they know that there is no such thing as a secure site, so they don't like their personal information being put up there.

Also, it is true that it takes about 20 seconds to buy such a card at a convenience store. The first time I bought one at RBC it took 45 minutes to buy the same card because they had to find someone who knew how to enter the long list of personal data they needed to sell it to me. I felt like I was going through a real interrogation drill.

Another thing I found out was that VISA nickels and dimes people to death. If there is a problem with the card and they phone because they don't understand that, VISA deducts money for the call. I think it was 25 or 35 cents.

Master card does not do this which is one of the many reasons I tell people to buy the Mastercards instead of the VISAS.

I DO like the Vanilla Mastercards for use on the Internet, but it is true that many on line places won't accept these. Those who do want an address so you have to throw out an address of some sort and make sure you write that address down in case you ever want to use it again. No matter how many times you tell them that there is no address affiliated with these cards, they will insist anyway. I think they just want to know your business.

Some of the more computer savvy customers will accept the Vanilla Mastercard however, and hopefully more will become savvy in the future.

These cards are great to protect yourself from passing out the last three numbers to just any Tom, Dick, or Harry that you don't know and then they have that number for life. You wouldn't want to do that with a real credit card.

They are also great in that they prevent companies from renewing automatically or charging more than they are supposed to because the card is limited. I actually had one charge rejected because of the latter.

If they had used the regular charge card they could've told me one price and charged another and then I would've had to go through all the fuss of fighting out the difference. They are fantastic cards for Internet use, provided more companies become savvy enough to use them, yet still keep customer data private.


In reply to a comment from John K C

I once took a cheque to RBC and the agent cleared instantly, when i asked her that, she said that all agents can do it instantly but the bank doesn't allow them to.

There are no issue with the gift card that i had purchased at the store's/bank's who sell it. Its just that some merchants dont accept the cards from their end & then they blame it on the Gift card Companies who issued the gift cards

Think this is bad, ever checked how long it takes a bank to clear a cheque into your account.
They are held for six business days and guess what business days are Monday to Friday so that means they hold your money for a minimum of seven days unless there is a holiday Monday then it will be eight days.
Seven to eight days the bank uses your money before it is cleared to your account.
Bank computers run 24/7 and I understand that transactions are complete in three days.
Where does your money go for four to five days?
Banks use your money for over 200 days per year before it enters into your account.
Tells you where the record profits are coming from.
Just saying

I had the misfortune of buying Vanilla Mastercards. My son, to whom I gave a card tried over and over to use it. I gave him the money and took the card. My husband's Aunt.... same story. We tried over and over to try to use the cards even online but without success. Finally I got a place that knew how to use the cards...........and they told me that the cards no longer had any value. I wasted close to $100. This is the biggest rip off yet........not only can't you spend them but then they are gobbled up by fees and worthless.............and you even pay a fee up front for the privledge.

Last year we receive two Vanilla Master Card Gift Card ($100.00 and $50.00) for our wedding and after seeing your show we checked the status of our card and we went from $150.00 to $100.00 and when we look at the terms it said "after a certain time frame a admin charge will apply". They did not mention what were the time frames or the cost of admin. It turns out that it was after 7 months and $2.50 per month!
I am shocked that they can get away with robbing us in such an obvious way!
One more example that the rich get richer and the poor poorer!
I am certainly telling everyone I know NOT to buy those cards..........

The main selling point of the pre-loaded CC, IMHO, is the useablility online.
Yes giving cash is a viable option. But for kids, these prepaid CCs permit them to buy songs, games online without getting a "real" credit card. A great gift, minus the additional education about "fees".

The CC companies know the target market, and charge for it!

At 3:09, the clerk says $28.95 is the price. Is this for a $25 card?

That's a markup of 15.8% -- you should "bust" the merchant, too.

Visa gift cards are useful for people who do not have a credit card. I was able to order on-line a replacement birth certificate, and some 1911 census information from the UK with such a card. As for the fees, are there not fees associated with regular cards, and how about monthly bank account fees that you pay just to maintain a credit card.

In reply to a comment from bob watford

So if it is in the fine print that makes it OK. Nice attitude. You really missed the point.

In reply to a comment from Tony

Tony, there is an activation fee, not a tax when buying the credit card.

I had the same thing happen to me. I was given a $100 Visa gift card from RBC and when I went to use it in the US it was declined. I got back to Canada went online and saw there was $1.75 per month admin fee. I called the 1-800 number and asked why they are charging this fee and not nothing but attitude from the guy on the other end. To me what admin is there for them if the card is sitting in my wallet waiting for me to find the right item to spend it on? It is crazy and I would never purchase one of these pre paid credit cards. Just another way the banks are ripping us off.

Whoever pushes these cards, must have deep connections. Because H&R block now tell you that you have to take your "instant cash back" onto these cards. It took such a fight to get an alternative to this option. Bad business.

In reply to a comment from bob watford

I could understand if there were no fine print but fine print is everywhere.
Read the fine print people and stop complaining about your own stupidity!

so what they don't also tell you is every time these cards are being used at a merchant the merchant will pay a fee of about 2% of the transaction... part of that 2% goes to the company providing the processing an other part goes to visa and the rest goes you guessed it back to the bank around 60 to 70% of the fee charged so who's getting rich on these cards the bank is.

What a complete waste of a program. These aren't store gift cards...they are preloaded credit cards. If you are too stupid to read the back of the card/package to see the fees involved then stick with cash. If you don't want to deal with the fees that VISA makes money on them DON'T BUY THEM. This show really needs to stick to fraud and scams. This is neither...and just illustrates that stupid people shouldn't be allowed to complain because they are too stupid to read about fees.

Folks, this is no different when a bank robber goes in and robs the bank. The banks are somehow taking a page from these robbers and doing it to law abiding consumers. We need a law that will BAN these fees as they lead to more profit taking.

Bank gift cards have no place at all in our daily lives. If you want to give a gift of money, give cash. They can buy their gifts anywhere they like, no strings attached. If you fear the embarassment, there are greeting cards that has a money pocket that can discreetly carry a few bank notes.

By the way, MasterCard and American Express gift cards are both equally bad. Banish them all out of your minds, permanently, for your own sake.

I just noticed something on the episode. When the lady was buying a 25 dollar gift card, she was charged 28.50. So the gift card gets taxed, so when you actually buy something, that product again is taxed. Wouldn't that be considered double taxation?

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