Beware of Visa Gift Cards: What to Know First: Good Financial Sense (2023)

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Beware of Visa Gift Cards: What to Know First: Good Financial Sense (1)

If you want to give someone a gift but don't know what to get them, you may have thought about getting them a gift certificate so they can buy whatever they want. But what if they're not shopping at Bed Bath & Beyond or eating at Applebee's? A Visa gift card sounds like a great idea since it's accepted everywhere.

Before you pull that American Express, Discover, Visa, or MasterCard gift card off the shelf, those gift cards might be a worse gift than stocking stuffers for Christmas.

table of Contents

Top 5 Cons of Visa Gift Cards

Although this article is about Visa gift cards, it also applies to other "open loop" gift cards from other major credit card issuers.

Prepaid gift cards are very popular as gifts and it's not hard to see why. They are convenient to use, more considerate than giving money away, and safer than carrying around a big wad of cash. The prepaid card market isis expected to reach $5.51 trillionuntil 2027.

For this reason, you should reconsider giving someone a Visa gift card.

fees and more fees

Most retail store gift cards have a $0 fee at the time of purchase. You pay $25 for a Best Buy gift card and get the full $25 loaded onto the card.

This is not the case with Visa gift cards. Below is a list of standard fees to purchase a Visa-branded gift card:

  • There is a $2.95 fee for gift cards with a value of $10.00 to $74.99
  • Gift cards from $75.00 to $149.99 have a fee of $3.95
  • There is a $4.95 fee for gift cards between $150.00 and $249.99
  • There is a $5.95 fee for gift cards between $250.00 and $349.99
  • There is a $6.95 fee for gift cards valued between $350.00 and $500.00

If you buy a business-specific Visa gift card, you'll pay even more. For example, a $50 Target Visa gift card has a $5 activation fee. The Walmart $50 Visa Gift Card has an activation fee of $3.94.

If you had given cash or a check instead, you would have saved yourself the purchase fee.

The activation fee is just the beginning. Some Visa gift cards charge additional monthly maintenance fees and inactivity fees. When the physical plastic card expires, you can get a replacement card, but some issuers may charge a replacement card delivery fee.

Before you buy this gift card, take a second to read the fine print and look for the phrase "no post-purchase fees."

If you want to give a Visa gift card, take the time to do your research. In addition to purchasing the gift card at your local grocery store or pharmacy, you can also check online. Even Amazon has gift cards for sale.

They are useful until they are not.

Many people give Visa gift cards because they are accepted along with MasterCard gift cards everywhere credit and debit cards are accepted.

However, people have run into situations where their gift cards have been declined, leading to embarrassment and frustration when the checkout line fills up.

The most common place people have trouble using a Visa gift card is at the gas station. Many gas stations receive a pre-authorization to ensure there is enough money to cover the amount of gasoline purchased when you pay at the pump.

These temporary authorizations can cost up to $100. If this amount exceeds the available balance on the card, the card may be declined. To use a prepaid gift card at a gas station, you must log in to pay in advance at registration.

Restaurants are another place where you may have trouble using your gift card. Some places authorize an additional 20% tip if you swipe a card.

Other companies that use pre-authorizations are hotels and car rental agencies. Make sure your gift card has a sufficient balance before using it at these locations andhave cash with youor a replacement card in case the charge is declined.

remaining money

Some people may have trouble spending the entire gift card balance and end up with a few dollars left over. It is estimated that$3 billion in gift cards go unusedeach year according to the Mercator Advisory Group.

There are several easy ways to completely empty this Visa gift card.

Many stores may split the transaction and allow you to pay with different payment methods.

Another method is online application. CanSpend the last few dollars on the Visa Gift Cardtransferring the balance to an Amazon gift card to use later. Other methods I have used in the past include partially paying my Comcast internet bill or my T-Mobile phone bill.

Less consumer protection

You must treat prepaid card purchases as cash. Any problem with a purchase should be discussed with the retailer.

Unlike a credit or debit card, you can't stop the payment, file a billing dispute, or refund the transaction.

Gift card scam

There are many people who received a gift card and used it for the first time only to find out that the money had already been emptied.

Hackers have used bots to guess random numbers on a gift card balance checker's website to check for a valid card with balance.

Another way scammers have stolen money from gift cards is by removing them from store displays, carefully opening the packaging, and recording the card number and PIN. Then they reseal the pack and put the cards back on the shelf. The thief then frequently checks the balance on the card while waiting for someone to purchase and load the card with money. Once a card is loaded, the scammer uses the card online immediately or creates a duplicate card to use in stores.

Store employees have also gotten into the gift card scam business by secretly activating another card and returning an inactive card to the customer.

Please note that these gift cards can be used by anyone anywhere unless you have registered a prepaid gift card and changed the PIN.

The terms and conditions for handling gift card fraud are set forth in the Terms and Conditions. Both American Express and MasterCard state that if they issue you a replacement card, it will be worth the account balance at the time you notify them of the loss or theft. They will not refund any amounts debited from the account before you notify them. You have to wait while they do an investigation to see if you get your money back.

Close $direction

Prepaid gift cards from major issuers are advertised with the convenience of plastic. Aside from the fact that these types of cards come with significant complications that regular credit cards don't.

It is almost always better to give cash or send a check. You wouldn't send cash in the mail, but no one thinks twice about sending a gift card.

One of the benefits of a Visa gift card is that it allows your recipient to shop online if they don't have a credit or debit card. For online use only, digital eGift Cards allow you to avoid some of the fraud and theft problems associated with physical gift cards.

Do you give vouchers? Are there any other issues you've experienced when giving or using gift cards?

Related Posts:

  1. How many credit cards should I have?
  2. Are credit card balance transfers a smart idea?
  3. Credit cards vs. debit cards and why you should stop using debit cards immediately
  4. What is a secured credit card and how can they help you build credit?


How safe are Visa gift cards? ›

The Visa Gift card comes with protection and security features. This means that unlike cash, the Visa Gift card can be replaced if lost or stolen.

What are the rules for Visa gift cards? ›

Because a Visa gift card functions like a credit card, it can be used anywhere that Visa cards are accepted, including online purchases—though it will likely need to be registered online or by phone prior to use.

What are disadvantages of Visa gift card? ›

Cons of Using a Visa Gift Card
  • Once you use up a prepaid gift card it's gone, and you can't add more money. The lack of reuse leads a lot of people toward reloadable prepaid cards instead.
  • Prepaid Visa gift cards typically have an activation fee, ATM fees, and other charges.

What is the difference between a Visa gift card and a Visa card? ›

Generally, Visa debit cards are for payments and most importantly; cash withdrawal. Visa Gift cards are basically for redeeming items or services, not for cash withdrawals.

What is the safest way to purchase a gift card? ›

It's safer to buy from places that keep gift cards behind the counter or, if they're sold on racks, in well-sealed packaging. Immediately contact the retailer that issued a gift card you used to pay a suspected scammer. If money remains on the card, you might be able to get it back.

What is the activation fee for a $100 Visa gift card? ›

Prepaid Visa Activation Fees

At grocery stores, it is typically a $4.95 fee on top of the amount on the gift cards. An example would be $25 + $4.95 activation fee.

Which Visa gift card has no fees? ›

Republic Bank offers fee-free Visa gift cards to their customers. These non-reloadable gift cards can be used anywhere Visa is accepted. They are available in amounts ranging from $25 to $250. To purchase a Republic Bank Visa Gift Card, visit a location near you.

What name do I put for a Visa gift card? ›

Cardholder name, or a generic title (such as “Gift Card Recipient”), or left blank. Signature panel must be signed by the cardholder. “Electronic Use Only” must appear on the front or back of all unembossed cards.

Do Visa gift cards get reported to IRS? ›

Yes, gift cards are taxable. According to the IRS, gift cards for employees are considered cash-equivalent items. Like cash, include gift cards in an employee's taxable income—regardless of how little the gift card value is.

Do I run Visa gift card as debit or credit? ›

How does my Visa Gift Card work? To make a purchase, make sure you know the amount remaining on the card then select credit and sign for the purchase. The debit option requires a PIN to work. The card does not come with a preset PIN, so you will need to set one prior to making the purchase for the debit option to work.

Why does Visa gift card keep getting declined? ›

There are a number of possible reasons why a purchase could be declined: You don't have enough money left on your card. You haven't activated or registered your card. The address you gave to make an online or phone purchase is different from the address you have on file with your prepaid card provider.

Do all Visa gift cards charge a fee? ›

All Visa gift cards have a fee, and this fee is dependent on the value of the gift card. Visa gift card of $10.00 to $74.99 have a $2.95 fee. Visa gift card of $75.00 to $149.99 have a $3.95 fee. Visa gift card of $150 to $249.99 have a $4.95 fee.

Which is better MasterCard or Visa gift card? ›

Prepaid Visa and Mastercard gift cards are pretty much the same when it comes to built-in benefits and overall terms of use. Both present widely accepted payment methods for various occasions, from grocery shopping to paying your bills. You can even use the gift cards to pay for gas, depending on the merchant.

What are the downsides of using a prepaid card? ›

There are only a few downsides to using prepaid cards, but they are significant. Prepaid cards come with fees. Cardholders may have a lot of fees, including activation fees, transaction fees, ATM withdrawal fees, reloading fees, monthly fees, or inactivity fees. Check the fine print on the card for fee types.

What is the maximum amount you can put on a Visa gift card? ›

Vanilla Visa Gift Card

The card can be purchased in $20 denominations, ranging from $20 to $500. Once the card is activation, no additional fees apply and the funds never expire. Per the cardholder agreement, activation costs between $4.95 and $9.95 depending on the dollar value and number of cards activated.

What is the most popular gift card in USA? ›

  • Sephora Gift Card. ...
  • Walmart Gift Card. ...
  • American Express Gift Card. ...
  • Target Gift Card. ...
  • eBay Gift Card. ...
  • Starbucks Gift Card. ...
  • Visa Gift Card. Visa gift cards are widely accepted by several merchants, restaurants, and retail stores. ...
  • Disney Gift Card. There is a wide range of options when it comes to utilizing Disney gift cards.
Jan 23, 2023

Which is better prepaid or gift card? ›

The biggest difference between the two reflects their permanence: prepaid cards can be reloaded and used indefinitely, while gift cards can generally only be used until the dollar amount on them is exhausted.

Why do companies give gift cards instead of cash? ›

Spreads Brand Awareness

One of the most cost-effective ways to spread brand awareness is by offering gift cards. As your customers love your products or services, they will want to share their experiences with their friends and family.

What should I know before buying a gift card? ›

Tips When Buying Gift Cards

If you are buying a card from a retailer, check it before purchasing. Make sure that the codes on the back of the card haven't been scratched off to show the PIN number. Be sure to read the gift card's fine print. Know the terms and conditions.

What to do if your Visa gift card is hacked? ›

If you believe you've been a victim of identity theft, call (866) ID-HOTLINE or visit the Call for Action website. You should also visit the Lost or Stolen card page—if the identity theft involves your Visa card.

Do banks sell Visa gift cards? ›

Purchase at a U.S. Bank branch

U.S. Bank branch bankers process the Visa Gift Card loaded with the dollar amount you specify, from $25 to $500 and you leave with your new Visa Gift Card in hand. Transactions are limited to the United States only. There is a $3.95 purchase fee.

How much does it cost to activate a $50 Visa gift card? ›

Visa $50 Gift Card ($4.95 activation fee)

For more information, visit our Terms and Conditions.

What is the activation fee for a Visa gift card at Walmart? ›

Can Fees Vary Based On Where I Purchase My Visa Gift Card. While standard fees are listed above, you will pay more for store specific Visa gift cards. For example, a Target Visa $50 gift card has a $5 activation fee. While a $50 Walmart Visa gift card has a $3.88 activation fee.

How much is a Walmart Visa gift card? ›

Purchase Fee
Purchase Fee
Fixed Denominations$5.44 or less Please look at the front of the Card to determine the purchase fee
Variable Denominations between $25-500$4.94 Please look at the front of the Card to determine the purchase fee
1 more row

Do all Visa and Mastercard gift cards charge a fee? ›

General-use gift cards, such as those from Visa and Mastercard, tend to have one upfront fee, often called a purchase or activation fee, which the gift giver would pay. The fee might be $2.95 to $5.95, depending on the amount added to the card, based on a sampling of gift card websites.

What is the best prepaid card without a Social Security number? ›

Bluebird® American Express® Prepaid Debit Account

The Bluebird® American Express® Prepaid Debit Account will accept an ITIN in lieu of a Social Security number. This is a great prepaid card that won't drain your account with fees, unlike many prepaid card accounts on the market today.

Is there a fee for Visa or Mastercard gift cards? ›

Visa gift cards often have a one-time fee of $2.95 to $6.95 at the time of purchase, based on the gift card's value, whereas most Visa debit cards and credit cards cost nothing to get.

What are the first 4 digits of a Visa gift card? ›

The first 4 digits of a Visa card will vary depending on the credit card issuer. A Visa card's first digit will always be a 4, but the next five digits on a Visa card represent the credit card company, bank, or credit union that issued the card.

How can I get cash for gift cards immediately? ›

Best Sites to Sell Gift Cards Online Instantly
  1. CardSell. The CardSell app is free to download. ...
  2. CardCash. CardCash is one of the most popular sites to sell gift cards online. ...
  3. Raise. ...
  4. ClipKard. ...
  5. Prepaid2Cash. ...
  6. Gift Card Outlets. ...
  7. BuyBackWorld. ...
  8. Gameflip.
Jan 5, 2023

Do you have to put your name on a prepaid card? ›

Although prepaid cards are not directly connected to a bank account, they work similar to debit cards. This means that a prepaid card will have to be activated with your social security number, will have your name printed on the card, and can be used in conjunction with a secure PIN code.

Do Visa gift cards require SSN? ›

While your Social Security Number is not required, it enables Visa to better protect your dispute rights if your card is ever lost or stolen.

Can Visa gift cards get tracked? ›

Can Gift Cards Be Traced? Gift cards tied into credit card networks, such as Visa prepaid cards, can be traced. For gift cards tied to individual merchants, it depends on what systems and processes the merchant has in place.

How does IRS track gift money? ›

The IRS finds out if you gave a gift when you file a form 709 as is required if you gift over the annual exclusion. If you fail to file this form, the IRS can find out via an audit.

Are Visa gift cards connected to bank account? ›

Most of the time, the answer is yes. Prepaid Visa cards usually let you transfer your balance to a bank account or third-party services like PayPal or Venmo. All you need is your card information and/or your bank details to get started.

Can a Visa gift card be used to pay bills? ›

Yes, the Visa Prepaid card can be used to pay bills, withdraw cash, or make any purchases where a debit card can be used.

Is buying a Visa gift card with a credit card a cash advance? ›

Most people don't realize that a gift card purchase with a credit card can count as a cash advance. Before buying a gift card with a credit card, it's a good idea to double check what a credit card issuer's policies are surrounding gift card purchases.

Can you overspend on a Visa gift card? ›

If this amount exceeds your available balance on the card, the authorization for purchase may be declined. Let the merchant know to only deduct a specific amount from the card and make payment for the balance by another method of payment. You may not use the card to add a tip after a transaction has been processed.

How long does it take for a Visa gift card to be usable? ›

Activate—If you purchase your Visa gift card from a retail outlet, the card should be activated and ready for immediate use after purchase. However, if you purchased it online, you'll need to activate it once you receive it. This is typically done online or by calling the toll-free number listed on the card.

Why do Visa gift cards expire? ›

Why do prepaid cards expire? Prepaid cards expire so that card issuers can keep their clients up to date. Prepaid card expiration also allows customers to have a more secure experience.

How much is the fee for a $25 Visa gift card? ›

Features. A one-time $3.95 purchase fee applies at the time of purchase.

What is the activation fee for a $25 Visa gift card? ›

Visa $25 Gift Card ($3.95 activation fee)

Where to get gift cards without fees? ›

"visa prepaid gift cards with no fees"
  • Southwest - $100 Gift Card. ...
  • Famous Daves - $50 Gift Card [Digital] ...
  • Red Lobster - $25 Gift Card. ...
  • Amazon - $50 Gift Card. ...
  • advertisement.
  • Tracfone - $15 Smartphone Unlimited Talk & Text (Digital Delivery) [Digital] ...
  • JCPenney - $50 Gift Card (Digital Delivery) [Digital] ...
  • No content.

What gift card is accepted everywhere? ›

A Mastercard gift card is like a regular debit or credit card. You can use it to make purchases anywhere in the US where Mastercard debit cards are accepted. Unlike a standard card, you can give a Mastercard gift card to anyone.

Are prepaid Visa cards secure? ›

Prepaid cards are a safe and convenient cash alternative. You can use a prepaid card to buy items online and in stores. Prepaid cards are not linked to a checking account. Instead, you must load money onto the card before you can use it—similar to a gift card.

Will Visa refund stolen gift card? ›

If records show a value still remains on the card, American Express, Mastercard, or Visa can cancel the lost or stolen card and refund the available value to you in the form of another Visa, Mastercard, or American Express gift card. There's no fee for replacing a lost or stolen card.

How much is the activation fee for a Visa gift card? ›

Prepaid Visa Activation Fees

It occurs when you first purchase the card. At grocery stores, it is typically a $4.95 fee on top of the amount on the gift cards. An example would be $25 + $4.95 activation fee. It's a one-time fee and once it is paid you never need to do it again.

Can someone steal your credit card info from a gift card? ›

Fraudsters can virtually print money for themselves by hacking into a company gift card database to steal card numbers and activation codes. This can be done via brute force hacking methods, malware, or using phishing or social engineering attacks against company employees.

How do you keep gift cards safe? ›

Store your gift cards securely.

Keep physical cards in a wallet, purse, or other secure place. If the card has a PIN covered by scratch-off material, leave the scratch-off material in place until the PIN is required.

What are the risks of prepaid cards? ›

Fraudsters can also use prepaid cards to carry out scams, such as card cracking or card testing. In these schemes, fraudsters use stolen or fake card information to load money onto the prepaid cards, then quickly withdraw the funds before the bank detects the fraud.

Where can I not use a prepaid Visa card? ›

Prepaid cards cannot be used for credit card payments or car payments. You cannot split payments online so you can only spend the amount that is on your card. You should keep your prepaid cards until they expire in case you receive any refunds to your cards. Virtual cards are meant to be used online or over the phone.

Why is my Visa gift card being declined even though I have money? ›

Your card may be declined for a number of reasons: the card has expired; you're over your credit limit; the card issuer sees suspicious activity that could be a sign of fraud; or a hotel, rental car company, or other business placed a block (or hold) on your card for its estimated total of your bill.

Can a Visa gift card be traced? ›

A) Yes, they do keep track of purchases. Almost all prepaid gift cards require some form of registration where they collect different data about you: name, address, zip code, phone number, etc.

What gift cards don't need to be activated? ›

Here are some of the best prepaid cards we recommend that don't charge activation fees when you sign up for them online:
  • Brinks Prepaid Mastercard. ...
  • PayPal Prepaid Mastercard® ...
  • NetSpend® Visa® Prepaid Card. ...
  • NetSpend® Visa® Prepaid Card. ...
  • Bluebird® American Express® Prepaid Debit Account. ...
  • The Mango Prepaid Mastercard®


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