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Pay $30.69 to buy $25 | The Press

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As proof of love, it is done much better than gift cards. But sometimes it’s a perfectly fitting present.

It was with this in mind, and to avoid looking old-fashioned by offering a check, that I went to the pharmacy. Question of giving maximum latitude to its recipient, I chose a Visa card with pretty candles on the packaging and the mention “The Perfect Gift”. It could have been Mastercard or American Express.

At the checkout, the man in front of me held four copies of the same product in his hands. I listened, because he didn’t seem to understand his bill and the cashier was explaining to him. That’s how I found out that his $25 prepaid “credit” cards came with a “purchase fee” of $4.95 each. Taxable fees. Aouch!

Looking at the back, I also learned that a $3 “monthly maintenance fee” would be deducted if the recipient takes too long to redeem their gift.

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 cards are even more demanding. Mastercard’s Joker, which allows the buyer to choose the amount of the gift (between $25 and $200), imposes an activation fee of $7.95 plus tax. Visa Joker (between $200 and $500): $9.95 fee.

  • Prepaid credit card

    PHOTO OLIVIER JEAN, THE PRESS

    Prepaid credit card

  • Mastercard Joker card example

    PROVIDED BY LPC AVOCATS

    Mastercard Joker card example

  • Prepaid credit card

    PHOTO OLIVIER JEAN, THE PRESS

    Prepaid credit card

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What complicates business is that activation (or purchase) and monthly maintenance (or inactivity) fees are prohibited on cards that can be used in a single business, be it McDonald’s, Simons or the SAQ.

However, cards allowing purchases to be made at multiple locations, including those issued by shopping centres, are not subject to this provision of the Consumer Protection Act (LPC). And in the case of free gift cards, in the case of promotions, for example, no rules exist.

These exceptions are confusing to consumers.

“The cards of financial institutions can charge the fees they want, as long as they are clearly disclosed before the purchase,” summarizes the spokesperson for the Consumer Protection Office, Charles Tanguay. The same logic applies when it comes to expiration dates. That said, Visa and Mastercard gift card funds never expire and can be transferred to another card by calling customer service.

Class Action Request

Even if their activation fees are legal, these cards are problematic, according to the Montreal firm LPC Avocats. Because the displayed price “must include the total of the sums that the consumer will have to pay” and it “must stand out more clearly than the sums of which it is composed”.

Me Joey Zukran also filed a request for authorization to institute a class action last fall. It is possible not to mislead 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 prices online that include card activation fees.

The CPA also prevents merchants in Quebec from demanding a price higher than that advertised. Thus, under the Price Accuracy Policy, Me Zukran judges that consumers are entitled to demand $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 that can be used almost anywhere seem quite convenient. As much for the teenager who does not have a credit card as for online purchases on Amazon.

But they come with usage constraints.

Some gas pumps refuse them. Restaurants and hotels may charge fees for transactions.

Merchants are also entitled to refuse split transactions. In other words, the holder of a $100 card might not be able to use it for $150 shoes.

When traveling in the euro zone, the maximum expenditure authorized per transaction is limited to CAN$75, specify the sites of the Joker cards and The Perfect Gift. On the American Express side, gift cards are accepted in Canada and the United States only.

For the latitude I mentioned above, we will come back.

Good old check and cash may not look as good as prepaid “credit” cards, but at least they don’t cause any nasty surprises.



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